#Business “if it does not give a return-don’t stock it!”

Have you ever bought something that you know you shouldn’t have in a sale? It was not your size, but you thought you could lose weight? Or it might come back in fashion? Go on admit it.
I am frequently asked if a person should expand their business or indeed they should invest in new equipment before they are ready.
Let me give you some examples.
You have a desire to stock a leading clothing brand in your new store, and the supplier indicates that they have a minimum range and minimum order size. Do you say yes please and give them control, and overstock with items you take on faith, or do you resist until you can afford to take risks? I can tell you most people over extend and say thank you to the supplier. It often ends in tears. The supplier gets paid, you have no choice! He also makes you per-order next seasons range, and you ave not even started selling current range! Even more risk, on your part. There are more stores waiting in the wings, so supplier has minimal risk.
You fail to sell the range, so you reduce prices to get liquidity back, just so you can pay for the next order. Who takes the hit? Not your supplier. Why do you see so many sales on he high street? Do they not come sooner in the season these days? You bet they do. cash flow is more important now Han ever, so people less likely to prolong risks.
So what should you do? For a start say NO. Do not be bullied by suppliers, it is bad business sense to over stretch your self in these difficult times. They need you, but play a game, and let you volunteer to make their life easy. Know your market. Know your clientele. Know the right pricing structures. Know your competitors. Do your homework before you commit. Suppliers bank on your naivety, and trust.
Your business is doing well, and you notice a new piece of kit in a trade magazine, and think it will be a great introduction to your shop. Before you rush out to buy it, ask yourself how many clients do you have that will pay the required price or want what the new equipment produces.
People seldom think “what will it replace.” it must replace something as it takes time and space.
Research before you commit, evaluate it’s true profit potential, including what profit it replaces.
Ask yourself, do you really need it yet?
Just a couple of things to think about today. I hope it helps?
As always, Geoff Reeves, FYCreatives, Blackpool, 01253477147


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