Articles for Retailers - Kizer & Bender



How to Stay on Top of Store Expenditures

Sticking to a budget is something every business person struggles with. We do, too. Here are some of the little tricks we rely on to keep on track, cut costs, and increase our bottom line:

• Take a negotiations course. Are you really getting the best price on everything that you buy for the store? If you’re not sure, a course on the art of negotiation can help. Take a class at your community college, online, or download podcasts so you can learn new skills on your drive to and from the store.

• Set non-negotiable budgets for every area of the store. Go through the list of expenditures you had in 2016 and review how much you spent in each category. Now, use your good judgment to choose an arbitrary figure that will become your 2017 budget. Let everyone who buys anything for the store know that this dollar amount is all the money there is to spend. Period. We’re willing to bet that each month you will be at or under budget. We always are.

• Carefully check incoming invoices and statements to make sure they are correct. Hold everyone accountable for any monies that are reimbursed. Insist on receipts for travel, samples purchased, mileage, entertainment, and other miscellaneous expenses.

• Get a scale and weigh the packages that are delivered to your store. Check to see how much it would cost you to return the package to the sender, and then review the invoice to make sure you were charged the correct amount.

Those little overages add up, as do the refunds you are entitled to when a UPS or FedEx shipment is late. Refund Retriever is a company that automatically detects issues with your shipments, applies for refunds, and verifies that those refunds are credited back to your account. Find out more at http://www.refundretriever.com.

• Pay Yourself First. It’s easy to continue to spend on your store until all your money for the month is gone, sometimes before you’ve had a chance to pay yourself. Consider yourself a critical supplier and pay your invoice first. Do this even when you know you can’t cash the check because it’s an important mindset to develop. Take it a step further and put away 10 percent for a rainy day. Or for your retirement.

• Never mix business and personal funds because it can lead to financial nightmares. Make sure you have one account for your personal finances and another for your business finances.

• Shop for lower interest rates. Sort through the piles of pre-approved credit card offers you receive and look for one that offers a lower interest rate than what you are currently paying. Call your current company, tell them you’ve received a lower rate offer, and ask for a rate reduction. If they are eager to keep your business, they will likely say yes. Then smile and ask them to waive the annual fee.

• Open a line of credit with your bank. You don’t want to have to rely on credit card advances when you need extra cash. Those additional fees, coupled with the higher interest rates credit card companies charge, can really add up. A retailer we know habitually borrows $2,000 for 30 days and then pays it back before the note is due. He has built a stellar reputation and a fantastic relationship with his bank.

• Shop your associations. NAMTA, for example, offers special member discounts on everything from freight management to office supplies. Log on to the “members only” sections of your associations to see what you’ve been missing.

• Little dollars can add up to big savings. We saved a bundle when we opted not to renew the service contracts on some office equipment. Most came with one to three year warranties anyway, so even when they were out of warranty and needed servicing, it usually wasn’t enough to pay for the cost of the service contract. The same goes for subscriptions to magazines and online programs with yearly contracts that you only use once.

It’s your money so be tough on how you spend it. When you adopt a cost-cutting mindset you’ll cut down on all non-profit-producing costs and you’ll have more money for the things you really need, when you need them.

Rich Kizer & Georganne Bender are professional speakers, retail strategists, authors and consultants whose client list reads like a “Who’s Who” in business. Companies internationally depend upon them for timely advice on consumers and the changing retail market place. KIZER & BENDER’s observations are widely featured in national newspapers, national and international industry and consumer publications, and on radio and television programs across the US. You can learn more at www.KizerandBender.com.