Every dollar is important when you’re running a small business. To stay in top financial shape, you need to regularly evaluate your expenses to ensure that you’re not spending more than you need to.
In this post, we’ll take a look at the common areas in your retail biz in which you might be overspending, and we’ll offer tips to reduce costs. Go through the points below and see if any of them apply to you.
Streamline cumbersome processes and tasks
As a business owner, you know better than most that time is money. The more time you can devote to revenue-generating activities, the better your bottom line. That’s why if your current to-do list is filled with things that aren’t putting money in the bank, you may want to rethink your tasking and processes.
A good way to start is by automating the manual administrative tasks on your plate. Things like data entry, reporting, or transferring information from one platform to another are some of the tasks that you could automate.
For example, if you’re still recording you inventory using a pen and paper, consider replacing the process with a barcode scanner app that automatically records your stock data into your inventory management system.
Or, if you’re still collecting customer information manually, why not replace the clipboard with an iPad? In doing so, shoppers can enter their details easily and you don’t have to manually transfer their information to your CRM. You’ll not only save time, but you’ll reduce human errors in the process.
These are just some of the tasks that you could streamline through technology and automation. If you’re looking to spend less time on cumbersome jobs to focus more on growing your business, go through your day-to-day tasks, and figure out how to automate them.
Replace your legacy systems
Using legacy (i.e., old and outdated) systems can be costly, particularly if the hardware or software requires regular maintenance. Most IT experts will tell you that providing adequate support for a legacy system is much more expensive, and, in some cases, impossible.
There’s also the issue of security. When a system enters legacy territory, companies stop supporting and updating them, which puts them at a higher risk for security breaches — which as most retailers know, can be a costly disaster.
Not only that, but outdated and obsolete systems are typically incompatible with newer technologies, and this could prevent you from taking your business to the next level. Let’s say you’re running a brick-and-mortar store, and you’re looking to start selling online.
If you were using a traditional cash register, the task of launching an eCommerce site would be cumbersome, since cash registers are unable to integrate with eCommerce platforms. On the other hand, if you were using a modern POS system with app partnerships or an API, then getting up and running with your online shop will be a much easier process.
The bottom line? Replacing your legacy system with modern technology may come with upfront costs, but it’s ultimately a smarter financial and business decision. The move will not only reduce maintenance costs and security issues, but it will put you in a much better position to grow.
Lower your payment processing fees
Have you ever taken the time to examine your merchant statement to figure out the fees that you’re paying? If not, set aside a couple of hours to do so. You may find that you’re overpaying for payment processing fees.
Because here’s the thing: while all businesses pay interchange fees to credit card issuers like Visa and Mastercard, payment processors often charge extra costs, on top of those interchange rates. So if you’re processing a lot of credit card payments, it’s a good idea to go through your statement and determine exactly how much you’re paying to card issues and then iron out the fees that are going to your processor.
Once you know how much you’re shelling out, see if it’s possible to lower your fees. Connect with your existing processor and negotiate down your fees. You could also shop around with other payment providers. Get quotes and compare them with what you’re currently paying. Many retailers, for example, have saved hundreds of dollar per month simply by switching to a subscription-based model, in which the payment processor charges a monthly subscription fee instead of taking a cut out of each transaction.
Take this step sooner rather than later. Credit card use is on the rise, which means you’ll be swiping more cards in your store going forward. The last thing you want is to be paying more than you have to for every swipe. After all, that’s money you could be investing back into your business!
Manage your advertising and marketing campaigns properly
Whether you’re running Google and Facebook ads or doing content and influencer marketing, your efforts will be worthwhile if you implement campaigns correctly.
And doing that with knowing who your target audience is. Where do they spend their time? Who are the people they admire the most? What websites or apps do they visit regularly? Knowing the answers to these questions will help you figure out the right messaging and the best platforms on which to run your advertising or marketing campaigns.
And remember that tracking results is critical. Before investing your entire budget in an initiative or campaign, take the time to lay out your objectives as well as your key performance indicators. What do you want to achieve with your campaign? What does success look like? Use the answers to these questions to guide your efforts.
You should also ensure that you’re able to track your campaign’s performance effectively. Making use of UTM codes as well as tracking and analytics will shed light on which campaigns or sources are driving traffic and sales, so you’ll know exactly when and where to spend your ad and marketing dollars.
Running a successful retail business requires optimizing your finances. Before this year comes to a close, consider looking into the various areas of our business to identify opportunities to save.
Francesca Nicasio is a retail expert from Vend, a point-of-sale, inventory, and ecommerce software that helps over 20,000 retailers manage and grow their businesses across multiple channels. She’s also the author of “Retail Survival of the Fittest: 7 Ways to Future-Proof Your Retail Store,” a practical guide to modern-day retail success.