Australian high streets – a hive of retail activity and innovation until a month ago – are facing an unprecedented challenge. For both individual businesses and the retail industry collectively, the economic downturn of coronavirus has already begun to bite. Each retailer’s ability to survive depends on how quickly they can alter their strategy to accommodate the evolving needs of a largely quarantined customer base. Amidst the uncertainty, though, there are a series of actionable steps they can take to relieve a little of the financial pressure as they prepare for a retail spring which will bloom once again in the coming months.
Understand your finances
During these uncertain times, cash really is king and there is no more important metric to measure both daily and weekly. It’s imperative to develop a holistic understanding of your business’ current financial situation. Analyse your financial statements and retail reports focussing on: your cash flow, inventory and expenses. With regards to your cash flow, determine how much money you have in the bank and how long your resources can last. Knowing how much financial breathing room your business has will help you make decisions about what to do, and when, in the coming weeks and months. Then consider your stock, and how much of your capital is tied up in your inventory. If your retail business deals with perishable goods, how much have you got and how quickly do you need to deal with it? If your business is set up to sell online, identify the products that would have the highest demand and find ways to put them in front of your customers. Finally, get a handle on how much you owe and when you owe it by. If possible, call your creditors, landlord, suppliers and anyone else and ask them if you can either defer payment temporarily or renegotiate payments. During a global crisis, there is a good chance they’ll be willing to work with you.
Cut non-essential spending
Identify your business needs and wants, and cut back on the latter. Expenses like utilities, marketing, retail management software are examples of a ‘need’, but things like your in-store Spotify subscription, travel costs, or luxury expenses would be considered a ‘want’ and thus need to be eliminated temporarily. Go through your business bank statements to identify your expenses over recent months, then use that to figure out which costs remain essential and what can be put on hold for the next couple of months. It’s likely that every dollar matters, so be ruthless – there’s nothing to stop you reinstating subscriptions and other expenses when normality begins to return.
You’re not alone – it’s OK to ask for help. Governments, as well as businesses and brands, are rushing to create programs to help small businesses stay afloat during these turbulent times. In Australia, for example, if your turnover has reduced by over 30%, you may qualify for a government subsidy through the new JobKeeper Payment. It’s a fortnightly payment of $1,500 per eligible employee for a period of upto six months. In addition, the Government has agreed to a temporary ban on evictions over the next six months for commercial and residential tenants who are unable to meet their commitments due to the impact of coronavirus. There’s also a series of business support funds and initiatives being introduced in states and cities across the country such as the city of Melbourne’s grant of up to $5,000 to develop an ecommerce site. Another great resource is LoveLocalRetail. Powered by Vend, it’s a coalition of tech companies coming together to provide advice and offers to help small retail businesses rally. Please, wherever you’re based and whatever you sell, don’t be afraid to reach out and ask for help.
The independent retail industry in Australia is a community of dynamic, innovative businesses who add colour and vibrancy to highstreets nationwide. Faced with an almost unimaginable challenge, it’s important to remain innovative and put in place measures to ease the financial burden on your retail business so you can recover and respond ahead of a beautiful retail spring.
Dave Scheine is managing director for APAC at cloud-based POS management software firm, Vend.