Retail is detail
Helping retail businesses thrive
We’re in tough times for the High Street, and even the most well known retailers are feeling the squeeze.
Over the last decade many High Street brands like Maplins, Thomas Cook, Peacocks, Past Times and HMV have all gone into administration.
But tough as times are, there are many positive stories out there. At THP we’ve helped retail clients open thriving new branches, launch new product lines and diversify into new retail markets – and we’ve cheered them on as they’ve moved from success to success.
As we’ve done so, we’re reminded about the characteristics successful retail businesses have in common. These are just five of them.
1. Having a Clear Strategy
There’s a famous Yale University study that found the 3% of MBA students who had clear, written goals ended up earning ten times as much as the other 97% put together.
Despite being quoted in hundreds of books, this study turned out to be apocryphal. But it did inspire similar research at Dominican University of California, which found that people who wrote down their goals and shared them with a friend achieved 76% of those goals – compared with a success rate of only 43% for people who simply thought about their goals over the coming month.
It’s the same in retail. If you plan and write down where you want your business to be in 1,3 and 5 year’s times, you are much more likely to succeed than if you simply keep your goals in mind – so share your plans with business partners, fellow directors and your accountant.
2. Creating a Flexible Budget
If you want to succeed, it’s crucial to have a budget that allows you to react to changing circumstances.
Many companies are closing outlets because they took out long leases on stores at prices that are no longer sustainable.
So ask yourself whether your budget would allow you to continue trading if profits fell or overheads increased. If it wouldn’t, be sure to revise your plans.
3. Measuring your Performance
Always compare your monthly figures with the previous month’s, with your budget and with the same period the previous year.
Drill down into the figures to find out what’s profitable and what’s creating a drain on your budget. Look at ways of protecting good margins and increasing poor ones.
4. Formalise the Process
Insist that your fellow directors or business partners spend scheduled time reviewing your management accounts every month. There’s always a temptation to put this vital task off and get on with the day-to-day work of the business – but if you take your eye off the figures, they’ve a nasty habit of slipping out of control.
5. Understanding your Accounts
It may seem obvious but business owners who really understand what their accounts mean have a much stronger grip on their organisations.
If you need help understanding Profit and Loss accounts, Balance Sheets, Fixed Assets, Accruals and Prepayments, then talk to us – we’ll walk you through the process of understanding what the figures in your management accounts mean, and how you can use them to guide your retail business from success to success.
About Andy Green
As Client Director Andy Green works primarily in delivering audit and assurance services, particularly in the Retail and Technology Sectors, as well as being the firm’s Compliance Director. These roles both bring great responsibility in ensuring that the outstanding quality and reputation of the firm is maintained.
After training and qualifying with a mid-tier firm of Chartered Accountants in the City, Andy spent some time in investment banking before joining THP in 2008, a move driven by his desire to get back into the profession. “The beauty of working for an accountancy practice is that every day is different – and you’re constantly achieving successes for your clients.” With Andy’s natural ability in interaction, THP is the ideal place.
With his positive drive and sense of humour Andy works with an array of clients, giving each the ultimate attention no matter what the size of their company.