Many who are starting a dollar store don't clearly know what it will take to achieve dollar store profits for their business. Possibly they assume as sales grow so will profits. Or maybe they assume the important task is to just take the steps to starting a dollar store and once they are open and operating they will worry about profits. Or maybe they are afraid to face the question head-on so they ignore it completely. No matter what the situation, it skyward fbisd
is critical to know exactly what it will take to bring your business to profitability.
For more on this important topic, read on. In this article I present 5 tactics that will help you drive profits skyward for your business.
1) Drive cost out of the dollar store merchandise you sell. There is huge leverage associated with even the smallest reductions in your business cost-of-goods-sold. Just think about the huge volume of merchandise sales your will make. Then imagine each of those items costing you just a penny or two less than now, and you begin to see the power this can have on your profits.
2) Manage payroll carefully. After starting a dollar store you will soon see just how much impact payroll has on your dollar store profits. Manage your payroll well. In fact tie your payroll to store sales. Then as your sales grow, allow your payroll growth to also climb within your targets. If store sales decline (For example, in January.) your payroll must also decrease.
3) Reduce in-store inventory levels. Carrying unneeded merchandise in inventory costs you money. Yet failing to have the right products available whenever shoppers enter your store also costs you in lost sales. Your challenge is to reduce inventory levels to the lowest possible level without impacting sales.
4) Match hours of operation to customer demands. Don't waste your time or payroll expense by holding your store open when customers rarely arrive. Don't open too early. Don't remain open too late. Find the balance to meet the needs of your shoppers. The exception, of course, is when hours of operation are dictated as a part of your lease.
5) Carry only merchandise shoppers want and need. Don't ever allow your store to become cluttered with filler products that just don't sell. Become aligned with your shoppers; meet their needs and most compelling wants. Once you have those items in-stock, look for red-hot selling impulse items, and broaden the products offered to meet core consumption needs for your shoppers.