Beauty Store Business

AUG 2017

Beauty Store Business provides solutions for better retailing! New products, industry news, savvy business moves and important trends affecting both brick-and-mortar and online retailers are included in each issue.

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BRONZE GOLD 98 August 2017 | beautystorebusiness.com many of the suggestions given, you will save your store money. As those savings add up, avoid spending recklessly and put some funds aside. This will help you when you find yourself in a negative cash flow situation. Offer Customer Incentives Most of the tips provided so far have been about how to save money, but making money is also a way you can achieve a positive cash flow. Use buy- one-get-one strategies, loyalty cards, email blasts, seasonal opportunities, social-media tactics, sales on low-selling products and other moves to increase your sales dollars. Use all the marketing ideas you have at your disposal to get customers into the store and leaving with bags full of items. Combining an increase in sales with a decrease in expenses is how the good stores become great stores at managing their cash flows. Know Your Tax Payments It's a necessary evil of running a business— taxes. And there are a lot of them. There are payroll taxes, state sales tax, local sales tax, property taxes, income taxes and even taxes for just being in business. They come at regular intervals and no matter how behind you get on your bills, these payments must be paid. Even if you get so far in debt that you have to declare bankruptcy, the taxes you owe do not go away. Bankruptcy will not absolve you of these payments. Therefore, know what taxes you owe and when. After a year or so, it's fairly easy to determine how much you are going to owe to any particular agency. Make certain you are accurately reflect- ing these payments in your budgets. Stretch Your Payables It may seem hypocritical to suggest col- lecting receivables promptly from your customers, and then say that you should try and avoid paying things right away to your vendors, but this is business. The ultimate goal of managing cash flow is to increase the amount of money coming in, while reducing the amount going out at any given time. Even if you have already negotiated excellent rates with your sup- pliers, you can also put off to tomorrow what you would have paid today. For example, many vendors will let you pay your bills to them 30 days after you receive their products or services. Take advantage of that. If there is no penalty for paying 29 days from today, then do just that. If they permit 60 or 90 days, again avoid the temptation to get the bill off your desk. Conversely, some suppliers will give you a discount if you pay early. In those cases, don't delay. If a vendor is offering you a 10 percent discount if you pay upon delivery, then increase your cash flow for that purchase by 10 percent by paying right away. Some may give you a five-percent discount for paying within 30 days; or any combination of discounts to get you to pay early. Those are the ones you pay as soon as possible so that you can reduce your expenses. It may not seem like much on a single invoice, but if it's a supplier who makes regular deliveries, those savings over a year can add up quickly. Managing your cash flow is not a sexy topic for store managers. It takes effort and it can be frustrating at times. As you're managing the store's finances, always try and think in terms of how much liquid money is moving in and out versus what the sales and expenses look like on a report. Real cash on hand is much better than a dollar figure on a piece of paper. ■ Dr. Steven Austin Stovall is a Professor of Management at Wilmington College in Wilmington, OH, and a consultant on all aspects of management and marketing. DISCO GOLD ROSE GOLD DEEP GOLD D I SCO GOL D R OS E GO L D DE EEP GOL D B R ONZ E G OL D

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