Running a lucrative retail store — or any business, for that matter — requires maximizing profits and minimizing expenses. The big challenge lies in figuring out where to slash costs without sacrificing quality or other features of your business that keep your customers coming back for more.
Here are five tips for saving money without looking like you’re cutting corners.
1. Know the value of your time. Yes, hiring employees and outsourcing tasks can be a major expense. But before you assume that acting as your own accountant, IT guru, and marketing expert is the path to profitability, calculate the value of your time. Identify the average amount of income you generate each week, divided by the number of hours you work. This is your hourly income before taxes. If your time would be better spent on activities that fuel growth than on maintenance tasks, delegate accordingly.
2. Use mobile software. Small-business owners save an average of 5.6 hours a week by using mobile apps, a survey by TechnoMetrica shows. You can, too, by taking advantage of free and inexpensive apps such as: GoPayment, which can help you expand your services and build your business by accepting credit card payments; HootSuite, which can help you keep tabs on your social media activity across a variety of accounts and platforms; CardMunch, which can help you organize all of your business contacts; and Evernote, which can help you save images, videos, handwritten notes, and information you find on the web (and search for them later by keyword).
3. Broadcast your sales policies. Unhappy customers don’t just cost you your reputation. The chargeback process that occurs when a customer disputes a credit card charge with Visa or MasterCard costs you $25 to $35 a pop, notes payment processing firm e-onlinedata. It says customers dispute charges for three reasons: They don’t recognize the merchant name on their statement; their expectations weren’t met (or they misunderstood the service); and the return or refund policy is “unclear, unknown, or unreasonable.” Clearly spell out your policies for sales, returns, and warranties on your receipts and website.
4. Be friendly to your neighbors. Relationship-building is a direct path to no-cost customer acquisition, says Gretchen Dusseau, founder of the fitness business System of Strength. “Don’t just ask to drop off fliers at other businesses. Grow relationships with the owners — and their employees — who see your target audience on a day-to-day basis.” Dusseau says she’s received many new clients through referrals from nearby hair salons, massage therapists, and nutritionists. She returns the favors.
5. Hire people who have the skills you lack. You may dream of “cloning” yourself, but hiring others who can handle tasks beyond your expertise will boost efficiency. When it comes to recruiting, think outside the box. Dusseau says she posts internship opportunities and project-based job needs at local community colleges and universities. “Most of the senior-level students or graduate students are very talented and need the experience. They’re generally excited, passionate, and grateful to share their creative ideas in what may be their first professional opportunity,” says Dusseau, who’s hired student photographers and videographers to create promotional materials for her classes.