The fastest way to business suicide is not knowing anything about your business. Crazy, yet so simple!
I recently spent a couple of days in Sydney at two of the premier trade shows for the fashion, gift and homewares industry. It is where retailers and wholesalers meet every six to twelve months to source new and upcoming products for their stores. I love this industry, it is creative, always something new and brings a diverse world of retail together.
The face of retail continues to change, you are constantly challenged by fashion trends but also by consumer trend - online v’s bricks and mortar or both. There is conversation around each and each has his own merits, challenge and successes. But like many creatives, those loving what they do they tend to forget the important aspect of the business. When posed with some basic yet important questions about their business, some were unable to answer the simple yet very important questions:-
How do you run your inventory? Do you track what comes in and what goes out?
What systems do you use?
Does your online store connect with your inventory or do you have to upload this separately?
Can you run simple reports on your sales quickly?
What accounting system do you use?
The answer’s I got to these questions astound me.
Don’t know my husband does it (I am still in shock over this comment)
We used to be online but it got too hard now we use excel spreadsheets
Actually, I have no idea
I use a few different ones (systems) but they don’t all talk to each other and its frustrating
Oh I am too busy for that side of the business
So what happens when you don’t know. If you don’t know then the chances you are heading down a steep and potentially fatal path is quiet high. Are you relying on your Accountant to do all the work. What happens when you only see their reports on a quarterly or even six monthly basis. Are you effectively monitoring your business on an ongoing basis and making adjustments to account for quiet periods or understanding your business better through the busy periods... my favourite word, forecasting.
Mapping out your effective workflows, and business systems are crucial to the businesses success.
I am certainly not ruling out how important your Accountant is, you need to work with them however you can take control of what you see and report on daily, how effective your sales strategies are, when you can or need to make appropriate discounts or product clearances. Know exactly what stock you have on hand and how much it is worth. Having sales is one thing, being able to fulfil them is another or even knowing when to re stock and more importantly the right items.
Actively being present and involved in your business is crucial to its success. Not knowing can be detrimental and down right naive. And if you need help you need to ask. There are many people out there that can streamline your business, integrate effective systems together and provide a process map as to how your business can operate with and without out you in it each day. You want a simpler and more effective way of running your business. Not one where you don’t know where your are heading only to keep catching your tail at the end of the month.