Growing a business can be tough, complex and time-consuming. Retailers like you know that good systems and processes are key to growing a business, but it is about more than just systems or processes. It’s also about the people that are involved in your business. It’s about your suppliers, your customers, your accountant, your taxes – everyone who touches your business who needs to be supplied, paid and made happy.
Effective processes and systems free up your time to do more value-adding activities
You need to efficiently do those tasks that have to be done in order to give you the time to focus on those extra activities that will actually gains you profit, finding the best products at the best prices, shipping through extra sales channels and delighting your customers with your great service.
Infographic: 6 different stages of growing a business
Explaining the 6 stages of growing a business
At Step 1 you’ll have no insight into your business, no history of sales, inventory or purchases. If you’re at this step you’ll probably be struggling to see into or make much sense of your business. A lot of your time will be being consumed by admin, and the balance between being able to do those activities that will help you to grow and admin is disproportionate. Processes are not clear, sales channels are disconnected and there is poor visibility of profit margins.
At Step 2 you’ll be looking slightly healthier, you’ll have some insight into your business and be operationally stable, you’ll probably be saving time through integrating some of your systems. You’ll having some established business processes in place that have made you more efficient although you might not have seen much, if any, profit at this stage.
In this day and age the most successful retailers are the ones who sell via multiple channels. Expanding potential markets by selling in store, through your website, on marketplaces such as Amazon or eBay and even via pop up shops. Step 3 is those businesses that have begun to add additional sales channels and embrace the multichannel model. If you’re in this stage you’ve come to realise that to maximise your profits you need to be where your customers are – and they are on multiple sales channels. You’ll be doing more activities to grow the business but there is still very little insight into sales, inventory or purchases within the business. You’ll have added a whole other layer of complexity to all your processes by adding extra channels and could be experiencing difficulties managing stock and orders.
By the time you get to Step 4 you’ll be able to see gross profit reporting across all of your sales channels and products. By being able to identify what’s working for you and what’s not you can begin to buy smarter. You’re beginning to focus on more activities like marketing, growing each of your sales channels and taking care of your purchase orders. You’re seeing growth across the business and now you need to start looking at being efficient again so you can make the most profit out of this new growth. To do this you’ll need a more detailed insight into the numbers.
Return on investment (ROI) is important for any business. At Step 5 you’ll be analysing net profit and working out optimum ROIs. You have visibility into your business which is giving you the confidence to spend more on what’s working for you and to cut your losses on those product lines that are not. You’ve cut down on admin as you’ve automated most of your back end business processes freeing up your time to work on more activities for growth. You can start to focus on marketing, customer service improvements and digging down into your business data to make informed business decisions.
At Step 6 is where you’re starting to sell smarter, buy smarter and grow faster. All the things you’ve learned from the previous 5 steps have been implemented effectively and you are starting to reap the rewards. Net profits are increased and you have cash flowing through the business. There’s more money to spend on growth activities like marketing, adding new product lines and improve communication with your customers so you get the most out of your business and its various sales channels.
So where are you on this Commerce Acceleration journey?
Do you have insights that other retailers going through these steps might learn from?
Multichannel retail is exciting and it can speed up the growth of your retail business but it comes with a whole set of new challenges too and can be complex and time-consuming. Many retailers struggle to reconcile inventory across channels, manage multiple ecommerce platforms and marketplaces. Let alone ensuring that customer orders go out on time, chasing suppliers, and then reporting on which areas of the business are profitable. In order to set yourself up for success you need to make sure that you have the basics in place and work your way up through the steps we’ve outlined. Trying to run before you can walk could have the opposite effect and prevent you from growing. Check out our whitepaper in the resources section for an even more in-depth Introduction to Multichannel to help you on your way.
There’s also lots of great content including PDFs, videos and infographics, all giving you the advice and support you need to grow your business efficiently on our website, and it’s completely free. To gain full accesses to our Commerce Acceleration 101 Education Zone go to http://www.brightpearl.com/ca101 and sign up there. You can also find out more about Brightpearl via www.brightpearl.com