The very demanding world of retail can be categorized as one of the most difficult industries (in terms of sustainability) in the world.
Retail has many facets attached to it from vendors, manufacturers to vendors, to resellers, and the list sometimes can go on and on.
With the many online businesses out there and fewer brick and mortars every day, retail can be seen as a convoluted industry because of the amount of competition.
Financing options for Retail vary greatly for every organization, but in this instance, I will use an example of a simple brick-and-mortar trying to make ends meet in order to gain a profit. Now, this is the reseller portion of the Retail Industry Chain, but it is the most common.
How does the business get inventory?
Direct or second-hand?
How does the business advertise?
What are your plans for expansion?
Does your business sell second-hand?
Does your business import?
Is your business keep up with supply and demand?
These are all questions the Retail business needs to ask themselves when the expansion comes into play as well as “Is the Retail store doing business correctly?” We know that the business owner(s), but does the business know how to circumvent their finances properly to better help revolve all the hats that we assume the business owners have when handling the many details of owning a brick-and-mortar or even a website?
In this business form, the Retail business is going to run into more disasters than needed, especially if the Retail business went in without a business plan, but it’s split milk, right? The Retail business may be the type to just want to buy and sell. Maybe the business started with a business plan, whatever the reason, learning about financing is vital.
So, let’s dive into a few ways Aristafi can improve the business’s overall revenue versus profitization.
One tip for maintaining a bottom line would be to make sure that the business is selling the right product to the right demographic in the right area. For instance, a Retail business selling jewelry in a lower-income district wouldn’t be smart for security expenses… If you are you may want to start buying jewelry.
Read that example and it will give you an idea of what we are trying to convey… A Retail business must think outside the box when it comes to the Retail industry, but that goes for any industry.
Anyway, back on topic.
Let’s discuss how to expand on brick and mortar. No matter if it’s candy or high-tech gadgets the first facet is the inventory line. Does the owner have the income to sustain a high-profit Christmas? What if the business is stocked with Funko Pops… The business just ran an advertisement to sell the Funko’s twenty-five days before Christmas the Retail store has a rush of customers and sells out in just three days. What happens for the additional twenty-two days with the advertisement that also may cost money to run? Does the Retail business stop the advertisement and lose potential cash flow? Does the business use cash out of pocket to buy more of those POPs that are flying off the shelves? The best practice is financing… but now it’s too late. They are off the shelves.
The Retail business can use the profits you just made to buy more, but then the Retail business worries about your ROI (Return On Investment). Then you have to think about the limitations of replenishing the same amount of stock the Retail business had during that three-day rush. On top of that, how quickly can the business receive the products to put back on the shelves from the vendor of choice? The business can do a rain-check system, but the Retail business is running out of (the most valuable commodity) time… Remember, Christmas is coming soon and the Retail business doesn’t want to lose that customer(s)…
Every retail type is different, but the situational hazards all are similar.
Even Walmart has issues. Remember, when they had an employee issue where they were underpaying certain employees over others? Well, that could be your Retail business.
Now, how do we fix all this… Financing. In Retail it’s generally smart to pre-plan based on the season in which the product you are selling coincides to best sell in between.
So, it comes down to, do you need expedient funding or term funding.
Make your Retail business extraordinary!
We can help you answer the key questions listed above, but the real question is: Should you spend your own money or pay a small amount of interest so you can grow properly? We assume that you went into business to make money. You turned nothing into something. Now you are at a roadblock that could hurt your business and cause you to have issues. Do you have the proper accounting for this type of fluctuating dollar in the multiple facets of the industry that are intended to keep your store (or website) running? Do you want to expand and grow and be as big as Amazon? Maybe, you have a well-tuned machine, but even machines break down once in a while and need cash to put them back together again.
This is why we have the financial instruments to get you back on your feet, plus the know-how to keep you from over-leveraging yourself or getting out of being over-leveraged.
As we stated above there are many different types of financing to help you, supplier, reseller, manufacturer, and all down the chain.