Shop reopens to soft profits; what to do?

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What to do when your business reopens, but things are still quiet? In this sponsored post accountant Gail Freeman suggests ways businesses can put strategies in place to help them post-restrictions. 

STACEY and Dylan have just reopened their shop and are finding things quiet. In a Zoom meeting this week Dylan said they needed to improve the shop’s profitability.

Gail Freeman.

“JobKeeper and the cash-flow boost have helped us but we really need to put plans in place so we are profitable after September when they stop,” he said.

I agreed that it was really important to have a strategy in place to deal with the future and what might happen after September.

“As you know, I have Mindshop tools available that can help with your plans,” I said.

“It is quite possible there will be changes in the next two or three years and you may need to change your direction a few times.

“For now, I suggest that you do some scenario planning. I can help you do this with your staff, looking at some possible different options. You could look at new markets, whether your shop is in the right location, whether you need new stores, franchising could be worth thinking about, selling online, having some email specials and I am sure that your team will come up with loads of other ideas.”

Stacey said that was exactly what they needed because they were going round in circles and not getting anywhere with their planning.

I told her: “That is just the start. A SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) can then help you chart the way forward.

“At this stage in the COVID cycle, I suggest that you look at your ongoing expenses and see where there is waste so you can keep your costs under control. Doing a waste audit can really assist so that the loss of the COVID subsidies will not have any impact on your business. Among other things that you could consider whether there have been any changes in the buying habits of your customers during this pandemic. Have you lost customers? If so, what steps can you put in place to get them to return once everything settles back.”

I also recommended they look at how they could use technology more effectively.

“I recommend that you make sure you have email contact addresses for your customers,” I said.

“This gives you the opportunity to have email-only sales for your customers. Being able to sell online also opens up more opportunities. I have noticed that being home during this period I have bought many items online and obviously this is going to be normal for many purchases.”

“As we have no idea of what the world will look like when we are out of the crisis, we all have to adjust our business model to fit the situation as it evolves.

“So you could find that you make changes now and in a few months’ time you have to change again and this could even happen a further couple of times. So it’s great you are taking action at this time. I look forward to being on the journey with you.”

In closing the meeting, Dylan said he and Stacey were really grateful for my assistance and that they looked forward to our next meeting with the team “so we can be ready for our brave new world”.

If you require help with your business coming out of COVID and how you might pivot so that your business achieves maximum profitability contact the friendly team at Gail Freeman & Co Pty Ltd on 6295 2844.

Disclaimer: This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser.

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