Q&A: Insights into today’s reality for independent retailers

Today’s reality for independent retailers

Source: Mega Power Newsletter: April 2022 

Recently we sat down for an interview with Jason Good, Expert Accounting Manager and Ron Muller, General Manager of Expert Accounting Services, to learn more about their insights into today’s reality for independent retailers.
Q: How has the pandemic affected your clients primarily? What is one of the main suggestions or main topics you have had to adapt to ever-changing retailer realities during the last two years?

JG: We did numerous cash flow projections for all of our clients to ensure that they’re meeting their requirements and obligations, and a lot of what we do is reminding our
retailers of where their inventory levels should be, in addition to watching their cash flow from the beginning of the pandemic up to now. We remind them not to be over-influenced by their suppliers – inventory is the biggest investment of their business, and it can definitely impose itself if they over-purchase.

Q: Speaking of over-purchasing, what is your approach to inventory management in the face of the current supply chain reality?

JG: I would say it’s a combination of being within our KPIs for each product category, having enough fuel to fuel sales, but also encouraging business owners to look at what their current #1 and #2 sellers are and re-evaluate them constantly. That way, as new products come into the fold, they can be sure to make the right decisions.

RM: The Expert Accounting team also creates sales’ budgets for all our clients. These are based on historical performance and data from the store itself. We are urging our clients, as we work our way out of the pandemic, to pay attention to their sales’ budgets. With that comes their cost of goods, which means what inventory they’re going to require moving forward. We help them ensure that they haven’t over-ordered, what with orders having to be placed so far in advance now, because we feel that moving through 2022, we’re soon going to get back to pre-pandemic levels.

Q: On that subject: many consumers have spent this time updating their homes, purchasing home goods, new appliances and more from your clients than ever before. These same consumers will soon return to the office and start spending money elsewhere. How else can retailers prepare for this adjustment before it starts to affect their bottom line?

JG: By developing a strategic marketing plan. The concept may have taken a backseat during the pandemic, but it will start to be a focus again. Also, keeping within your KPIs over your sales budget, but also being strategic. Taking a look at e-commerce, evaluating your overall online presence, finding out which advertising stream gives you the best bang for your buck.

Q: How can new market realities, such as rising prices or inflation, affect a small business owner? How would you advise a retailer to prepare themselves for future events?

RM: Of course, your landed costs is going to be reflected in your asking price. It’s just a natural process, whereas costs increase, stores have no choice but to increase their own price points. We advise them to have as much awareness as they can regarding the additional landed costs such as fuel surcharges, additional freight costs, etc.

JG: And then taking that knowledge and marketing themselves in that slightly different way that shows why consumers are better off buying from them rather than a big-chain store, and enhancing their own competitive edge to validate those price points.

Q: What are some of the insights you can offer regarding the positives encountered during these challenging years? How has the advice you have offered your clients allowed them the opportunity to achieve growth?

JG: A lot of times, independent retailers feel like that just because they’re independent, they’re on their own. But the pandemic has resulted in a lot of shared experiences, in a matter of speaking, and we can bring them together and provide them some reassurance that others like them are making similar decisions, encountering similar issues, and even making similar mistakes. Our clients know that we’re there for them to weather the storm, through good and bad.

RM: We have also continued to deliver sound, accurate financial reporting during the pandemic, and we have had regular meetings with our clients to review their situations on a monthly basis. Just the continuation of the discipline of our process, I think, has built a strong foundation under our stores and provided them the knowledge to make decisions within their businesses.

By teaming up with Expert Accounting, you will be able to manage your finances, solve the major issues of your business and focus on other aspects of your business to achieve your goals. Let’s work together! Contact Expert Accounting today.