The Xero Small Business Index reported a record high for the month of June 2021 and is an indicator that many small businesses are currently performing well above average - perhaps more than expected in the current market context. The retail sector dominated sales growth, showing a year on year increase of 16% after adjusting for COVID. With such strong results, it’s timely to take a good look at your retail business to compare to the industry average but also to look back at your business plan in order to ‘look ahead’ for the remainder of the 2022 financial year.
Comparing to an industry benchmark can provide valuable insights to how your business is tracking. If performance is above the benchmark, look for reasons that may be contributing to this success:
- How can you maintain these in your business?
- If performance is lagging below the benchmark, are there tweaks that can be easily implemented to help lift sales?
Adding the benchmark to your monthly financial reports is a great way to keep track of progress.
If you have a business plan in place for the 2022 financial year, now is a great time to look back at what you expected to achieve and realign your expectations. (Don’t have a business plan? See the benefits in the BDO retail guide). Some considerations regarding your business plan include:
- Can you identify the revenue channels that are performing best in the current environment and how do these compare to what you planned for?
- Are you receiving customer feedback on aspects of your sales process that reinforces what you are doing or conversely suggests you need to make a change for example to your e-commerce process?
With one quarter complete of the financial year, it’s also a good time to reassess upcoming risks to your sales growth and how you might mitigate these.
- If you rely on repeat custom, have you taken steps to ‘lock in’ customers with loyalty programs or exclusive deals?
- If you are at capacity in terms of servicing new customers, is there a way you can still make potential customers feel valued while placing them into a holding pattern?
Lastly, we know that the impressive sales growth has likely meant that your key staff having been working long hours and putting in extra effort and may be feeling stressed. It’s a good time to look at how you are managing your expectations of your staff and ensuring that their mental health and wellbeing is maintained.
To continue growing your retail business, get in touch with your usual BDO adviser to discuss the benefits of benchmarking and a tailored business plan.