How To Increase Your Bottom-Line Profits This Year By 20% To 40% by Retail Planning
Hello and thank you for visiting me. My name is Joe Carvelli. I’m the owner of Retail Ingenuity and I’m here today to start working with you right away on how to increase your bottom line profits this year by 20% to 40% by Retail Planning.
If last year you made a million bucks, God bless you!
But I’m going to help you make $1.2 million, $1.4 million. If last year you had only one or two stores and I shouldn’t say only, but if you have one or two stores and you only made $20,000, $30,000, $40,000, $50,000, I’m here to help you double that number.
So let’s get started and talk about one of the numbers that’s so very important, that when I ask over 90%, and by the way, I’ve asked a lot of my colleagues the same question, and this is the core question:
What is your overhead?
If you don’t know what is causing you to run your business, you really can’t build plans that are effective, that will drive your dollars gross profit, that will tell you where you need to be the leanest with your inventory, when you should be taking your markdowns.
So let’s go and get that number. And the simplest way to do that is this: Go to your QuickBooks, Peachtree, MAS 90, your accountant, who ever it is and say, “Give me the last 12 months.” “Okay. What month do you want to start from?” “Give me the last 12 months of my expenses and divide that by 12.” Make sure it’s a full 52 weeks and divide that by 12 and that’s going to give us your average monthly expenses to run your business.
Now, it’s important to note this.
You want to exclude what we call “extraordinary expenses”. Extraordinary expenses being, you did a store build-out and you spent $150, $250, half a million dollars, make sure that number is out there. It’s not part your fixed expenses.
The next number or the next thing I need you to do is if you’re not familiar with the 4-5-4 calendar, 4-4-5 calendar, go to www.nrf.com and download in the bottom right-hand corner of the screen, you’re going to find the calendars to download. Download one of those calendars, get familiar with it. Let me just give you a little bit of an insight here. On the top left-hand side is going to be the month February, that’s where your year starts. So when you come around to January, that is actually the next start of the next year. And then retail, we really do consider the start of our year in February.
So get that calendar and I want you to do another thing. Go to your point of sale system and get me the last 12 months of your expenses, rather your dollars gross profit that your business brought in. Take that number and write it down month by month, and on a piece of paper, really simple — I prefer paper over these iPads and what have you — and simply write down, “Here’s my dollars gross profit. Here’s my expenses,” and do it month by month, you’re going to find out actually in what months you’re actually losing money or potentially are losing money. Retail Planning
From now, what we’re going to do is we’re going to look at in those particular months what you need to do to increase a closer loss to a closer break, even or actually make a profit. Now that’s step one in doing this because you’re going to be shocked when you find out what your expenses really are. You should know that number like you know your social security number and your birth date. So go get your expenses, go get your dollars gross profit and I’ll put out another round of videos to follow right up with this one in the next 24 to 48 hours.v
We’re going to get you that 20% to 40% to your bottom line this year, I promise you. If you stay with me, I’m going to do this with you. You have a great day. Remember, you need to stay lean with your inventory, set up objectives with that inventory that’s on your floor — each piece of merchandise. I don’t care if you have 100,000 pieces of inventory. You need to make sure that each piece of merchandise that’s on display on your floor has an objective for when it should be sold out and not be on that for anymore for sale , that is more important in Retail Planning.
Once you have done that and have those figures ready, you can move on the the next step.