Cash Flow

"We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact, we were running out of gas."

Michael Dell

EASILY FORECAST YOUR MONTHLY CASHFLOW FOR THE NEXT YEAR

How Retail Cash Flow Issues Surface

Some of the most common reasons our retailers would tell you for why they became clients would be:

  • They didn’t have the cash on hand to cover one or many of their expenses 
  • They never had the right inventory to sell – always having too much of some things and not enough of others. 

OFTEN IT’S BOTH

Positive Cash Flow in Retail

Can take significant effort and rely heavily on a disciplined approach in several different areas of your business. Certainly, of those that pertain to the expense control and increased income generation areas, some of the easiest to impact would be:

Inventory Management

Payroll Management

Performance Management

Being Ready To Pivot

Especially in an environment like we have today with incredible sales volatility in some categories, it’s important to focus your purchasing on a narrow and deep approach. Using the cash you have to fund categories that will turn over quickly and generate cash fast. As category sales change, you want to be prepared to pivot immediately.

Get the Inventory Plan and Analysis You Need

Identifying those categories and products takes sophisticated analysis, a merchandise financial plan, and an assortment plan. By focusing purchases on those categories that sell-through, you can begin generating cash and build on it over time.

Annual Reviews

During an annual assessment of your business, one of the components we review is your payroll for both associates and management, determining each’s appropriate amounts.

The level of payroll spending to maintain profitability is expressed in a percentage rate of sales. It should flex up and down with your sales.

Identify your payroll easily with our tool.

Now that you’ve found ways to budget payroll and increase turnover through managing inventory to have products in the categories or vendors that your customers find desirable and are inspired to buy, another way to grow sales volume is through associate performance enhancement.

Measuring Performance

There are metrics for measuring sales associate success that every shop owner should watch. Coaching associates to stronger metrics is one of the most cost effective approaches you can take to increase sales. Your getting more volume for the same payroll spend.

Recommended Reading

Mastering Cash Flow

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EASILY FORECAST YOUR MONTHLY CASHFLOW FOR THE NEXT YEAR