Everybody experiences a major change at least once in their life. The change can take form in a natural disaster, a change in health, or relationships. The difference right now is everyone is experiencing a significant change at the same time.
Foundational change
Like many businesses, the pandemic highlighted foundational problems in your business. If cash flow became a major issue within week one or two of the quarantine, it was likely always a problem. Same goes for difficult vendors or having too much inventory.
Some solutions to these mean not just increasing sales, but looking at what you have more control of (expenses, inventory, investments, purchasing, savings, etc). Fixing the cash flow problem for your business is the best long-term solution your business can have.
If vendors have been difficult, now is the time to make new relationships. Easier said than done, we know, but everyone needs a helping hand when times are tough.
And last but not least, fix your overstock problem. A rule of thumb is your average wholesale inventory level should be between one-half and one-quarter of your annual gross retail product sales. The closer your inventory is to a quarter of your annual sales, the better you are at managing your inventory stock than most other creative retail businesses.
Review procedures
As with any drastic change, it becomes easier to try new things. If you made a sudden change to better adapt your business to operate during a pandemic, review that policy or procedure. A simple cost-benefit analysis should help you determine whether or not to keep that change, or leave it back in Q2.
For changes that make sense to keep around, determine a plan to ensure they remain moving forward. How can you keep providing online resources? Should you convert a classroom into a warehouse? These questions and more I’m sure are things your business has already considered.
For more information on how to make change last, check out “The Problem Spotlight” by Gwen Bortner published in the June issue of American Quilt Retailer.
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