Growing Your Business: an internal look

Growing your business takes strategy. How often does that strategy consider looking inside your store’s four walls?  When you think about growing your outreach, are you first analyzing what could be improved internally?

These are tough questions that address a hard reality. However, as with any tough business decision, strategic management requires manageable action. To start your internal analysis, there are five main areas to consider for action:

  1. Investing in a proper Point of Sale (POS) system
  2. Ensuring appropriate inventory levels
  3. Revamping the publisher to wholesale dollar ratio
  4. Manage cycle counts on your inventory
  5. Increase your stock on newly released titles

With the countless number of new and popular backlist titles available to retailers each year, it seems impossible to effectively manage your business without a POS system. Implementing a POS system that best fits the needs of your business is the first step in growing your business through internal improvements.  There are many quality systems available and I encourage your store to research several to find a best fit.  Though there will be an initial learning curve for your staff, the potential for increasing your revenue is far greater than any hurdles you might endure upon installation. .  Martha Brangenberg at Charis Christian Bookstore in Largo FL, told me, “Using a POS system helps me keep my sanity!  Having the Christian books database at my fingertips allows my staff to speak knowledgeably to our customers.”

Appropriating your inventory levels is a key to successfully operating any retail store. Once your POS system is in place, stock inventory levels will be more manageable. Steve Pickering of Lemstone Christian, a Parable Store in Marion IA, said, “At any one time you can value your inventory by vendor, category, department number, and more. Managing an open-to-buy would not be possible without a POS system that can calculate on hard quantities and cost.” Understanding your inventory levels can free up open-to-buy dollars, ensure you do not run out of stock on top-selling titles,  and help you better balance your store’s title category/publisher inventory.

In addition to POS systems and inventory management, revitalizing your publisher-to-overall-wholesale-dollar ratio is imperative. This can become overwhelming, so let me help break this down:

Write down your total business revenue for last year.

  1. Divide that in half (average margin). This will act as your baseline.
  2. Factor in the number of turns you want for your inventory per year. (A healthy number is 3 turns per year)
  3. Next, break out the revenue your store makes by each publisher, in dollars. Then convert these figures into percentages.
  4. Now, look at the dollars made in each category (Bibles, Children’s, Fiction, Gift, etc.) by each publisher, and again convert these figures into percentages.
  5. Finally, compare your inventory dollars in each category to the publisher’s share.

After appropriately calculating your publisher-to-wholesale dollar share for each of your categories, your next action is to implement cycle counting on your inventory. Cycle counts can be done monthly, quarterly, or by season and will help maintain your stock levels, showing areas that are in need of inventory reduction. Remember, each publisher handles returns differently, so work with each one separately to understand their process. This will ensure that your returns will be handled in an expedient manner.

Here is a suggested monthly cycle rotation:

Week 1 – Bibles, Reference, Curriculum

Week 2 – Trade books

Week 3 – Children’s

Week 4 – Gift

These internal preparatory actions will now allow you to grow your business’ revenue. Your final action is to ensure that your store’s shelves are stocked with new titles upon their release date. Anytime a customer visits your store, and does not find the title they are looking for, the likelihood of them returning on a later date to buy the book is slim.  Many times, customers will not even give you the opportunity to order them a copy, because this is something that they can do themselves.  Having the newest releases available keeps your store relevant in the eyes of the consumer, in addition to stocking the appropriate mix of bestselling backlist titles.

Growing through increased revenue is the goal of most for-profit organizations. Though it can be challenging, and even mean implementing a change, consistent internal evaluation is a must.  It was Benjamin Franklin who said, “Without continual growth and progress, such words as improvement, achievement, and success have no meaning.”  (http://www.brainyquotes.com) By taking action and commit your store to an internal review will make your business more profitable, helping you become a destination point for your community.

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