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MONEY SHOP


Footwear Today’s financial plumber, footwear retailer David Gummers, looks at the challenges of coming out of a recession.


downturns. In many ways if your cost structures are in place and you get enough customers through the door you can struggle through a recession,by being very tough on your costs. Remember there are naturally lower bills in these times, as your wage bill usually is lower, meaning you are paying less tax and NI, coupled with a lower VAT payment as your sales are likely to be lower.


T Now, I know this may sound obvious, but these bills will start to increase


as your business starts to grow again. The temptations are to start increasing your stock as though there is no tomorrow. Manufacturers will NOT run out of shoes. Whilst,


it is sensible to increase your stock, do it in


a measured way. After all, having survived the difficult times, there is no point in abandoning your fiscal prudence and going to the profligate ways of the past!


Never forget it is all about cash flow, if you continue to manage it in a


sensible way, the business will grow as you target the customers you want to win back from the competitors who have been wooing them with lower prices. As the economy grows some customers will want to come back to the quality products and first class service they enjoyed before times became difficult. Be realistic though some will be happy with the money they have saved and you,sadly, may never see them again.


It is a good time to have a look at your shop and your website, and think


whether over the next 12 months a lick of paint and a general tidy of your website is a shrewd move. A good business will be updating their website on a regular basis and ensuring that you have a good size run on anything you offer online. If you are considering re-vamping your shop, have a budget and STICK to it. It is always tempting to spend too much. Money may be coming in easier but it is easier to forget that your income should always be greater than your outgoings!


I have no doubt many of you will have had a year end, or it is getting close


to it. This is again a good time to have a look at your costs. Are you on a fixed tariff for your energy supply, this gives you a better control of your cash and certainty on price. Is there any area where your costs have grown by more than 2.5% - the rough rate of inflation? If they have, vow to reduce them in the next 12 months!


It is easy to get excited that the bank balance is more stable than it has


been in the last few years and you may be tempted to over spend. A healthy bank balance means you can go to your suppliers and negotiate more discounts and perhaps spend some of the money on clearing lines where you can increase your margin a little. You can also offer a bit of discount to the customers that have stayed loyal to you during the recession. They will be pleased to be saving a little money and they will remember you when they need to purchase again.


The economy will only grow by around 2-3% this year so do not expect


the turnover to be growing by more than this.If it does you are doing better than average. If it grows by less have a look at your product offer, as well as whether you are welcoming to your customers.


The rules of business are the same in good times as well as in bad. The


only advantage is that because the foot fall is increasing you are less tense when a customer comes through the door, as although every sale counts, it is less critical than it was two years ago, when customers were rarer.


It is worth re-iterating to your sales team that a positive vibe in the shop


means that a customer is more likely to buy from you. If they really enjoy the experience they may buy extra pairs, or treat themselves to that handbag, and more importantly, come back in the future.


Everyone that has come through this period deserves a great deal of


credit, as it has been as tough as I can ever remember it. Now, as the shoots start to sprout try to understand why you got through


this, loosen the purse strings carefully, have a clear vision of how you want your business to look in 12-18 months, what figures you expect to be producing. Decide which manufacturers have been helpful to you over the last 5 years and which you think could have done more. Be sensible and realistic, do not expect to return to the heady days of 10-15% growth, keep a tight control on your cash flow and it could be a much more prosperous year.


his month I’m taking a look at the challenges of coming out of a recession. While, I do not think any of us have lived through quite as deep and damaging recession as this one, most have us have seen


If you would like David to look at your business costs, he promises that if he cannot save you any money you pay him nothing. But for every pound he saves you pay him, 15 pence. If you want to learn more email David on david@fdickinsonfootwear


Website: http://www.fdickinsonfootwear 30 • FOOTWEAR TODAY • APRIL 2014


.co.uk or call 01229 580654 .co.uk/


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