Category: Advice for retailers

Having access to the cash you need when you need it’s critical in business. Survey after survey of small business retailers ranks cash flow as the biggest challenge they face.

Cash flow will be a challenge where the business has spent more than it can afford to, revenue is too low, or money is leaving the business in some way. A cash flow challenge could be a combination of any or all three.

The business owner is responsible for any cash flow challenge. They decide what is spent and when it’s spent. Ownership of the challenge is vital to resolving it.

Here are some obvious and often forgotten management principles designed to help improve the cashflow position of a business:

1. Borrow as little as possible. Capital that has an interest cost associated with it’s expensive to the business.
2. Turn stock as quickly as possible. The longer a product sits on your shelves, the higher the cost to the business.
   1. Make shopping easy.
   2. Display products to encourage purchase.
   3. Carry little or no back-room stock. Instead, rely on suppliers to supply just in time.
   4. Buy new stock based on what your data indicates works in the business.
   5. Stock more products like your top sellers and less products that are your bottom sellers.
3. Keep your labour cost as low as is practical.
4. Carefully consider what you expect to make from every business expense before making the expense.
5. Check to see if there are lower cost alternatives before paying overheads such as business insurance or utilities.
6. Set your prices to maximise the opportunity, balancing maximising margin with expected shelf time.
7. Where you can, pay suppliers to access a settlement discount and bank the additional margin on those products.
8. Sell online so the business is trading 24 hours a day and not restricted by the physical shop’s opening hours.
9. Don’t provide customer credit unless it’s essential.
10. Pay bills early if you have the cash.
11. Don’t spend money on anything in or for the business that you cannot measure. Measurement is critical to understanding if the spend has delivered financial value for the business.
12. Have appropriate shopper and employee theft mitigation steps in place.
13. Set aside an amount each week via an automated transfer into a rainy day account. This is to build a buffer should something unexpected happen within the business.

You’re very much in control of whether cash flow will be a problem in your business. Acting ahead of a problem is more important than being in a position where you need to react.

Data is key to cash flow comfort, data about business performance transactionally through to data as represented in the financial statements for the business. The more in control you’re of your business data and the better you understand it, the less likely you’re to encounter a cash flow problem.

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newsXpress is a marketing group that supports small local independent retailers to thrive. Find out more at help@newsxpress.com.au.

The idea of these questions is to put the needs of your business front and centre. Having this list can make it less confronting for you when you ask the suppliers. Think about the answers from your potential suppliers and whether they serve your needs.

1. What is unique about your business?
2. Where are your products made?
3. Do you provide sample products?
4. Will you supply other retailers near my shop?
5. Can I sell your products online?
6. What are your freight charges?
7. What level of inventory do you hold, and how quickly can you supply?
8. Do you provide electronic invoices?
9. Can I order directly online with you?
10. What is your settlement discount?
11. Can you do better on price?

Asking each potential supplier the same questions guides a consistent approach to evaluating suppliers. This should provide you with more consistent results in terms of supplier performance.

Evaluate the Partnership, Not Just the Price

While the answers to logistical questions like freight and discounts are vital for your margins, pay close attention to the quality of communication during this process. A supplier who is transparent about their inventory levels and responsive to your inquiries is likely to be a reliable partner when challenges arise, such as shipping delays or product defects. Remember, you aren’t just buying stock; you are entering into a professional relationship. A supplier whose values and pace align with your own will contribute significantly to the long-term stability and reputation of your retail brand.

Review and Refine Regularly

The retail landscape is constantly shifting, and a supplier that met your needs three years ago might no longer be the best fit today. Use these questions as part of an annual or bi-annual audit of your current partnerships to ensure they remain competitive. If a long-term supplier has slipped on delivery times or ceased offering settlement discounts, having this consistent data allows you to have a constructive, evidence-based conversation with them. Maintaining a high standard for your suppliers ensures that your shop remains agile, profitable, and stocked with the best possible products for your customers.

Your relationship with your suppliers is one of the most significant levers you can pull to control the health of your retail business.

By moving from passive ordering to active, inquiry-based sourcing, you shift the power dynamic in your favour and ensure that every item on your shelves earns its keep. Treat these questions not as a one-time hurdle, but as the foundation of a professional standard that protects your margins and guarantees the quality your customers expect.

When you put your business needs front and centre, you aren’t just buying products, you’re building a resilient, profitable future.

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newsXpress is a marketing group that supports small local independent retailers to thrive. Find out more at help@newsxpress.com.au.