Retail Observer

RETAILOBSERVER.COM MARCH 2015 36 Elly Valas Retail Views Elly Valas is the Marketing Services Director for Nationwide Marketing Group. She can be reached at elly@ellyvalas.com or at 303-316-7569. Visit her website at www.ellyvalas.com. RO T o make our deadlines promptly, I write these Retail Observer columns a bit in advance of when you read them. I'm going to go out on a limb somewhat and predict that the first quarter has been a good one—certainly more robust than what we have seen in the past couple of years. Assuming that no major crises have happened in the weeks between now and publication, I'm betting on a pretty good business climate for 2015. Rough weather can certainly slow things down for a few weeks but all the indicators are solid. The stock market ended 2014 in record high territory; employment has gained steam and new jobs are being created nearly every month. NAHB predicts that housing starts will exceed the 1 million mark—a traditional bell weather number suggesting strong economic growth—for the first time in six years. Interest rates have climbed several basis points but home mortgage rates are still well below 4.5%. So now it's time to initiate your own business recovery plan. The last few years have been rough. High unemployment, wage stagnation and reduced home building hit the home goods industries hard. Some dealers were just uncertain about what was happening while others suffered significant business declines. Nearly everyone took a "duck and cover" approach cutting expenses to the bone and delaying all but the most urgent repairs. In order to maintain profitability or at least keep losses to a minimum, staffing was cut and everyone learned to make do with less. Now, however, it's time to start reinvesting in your business. First, make a list of all the things that might need your attention. There are plenty of demands for newly-generated cash reserves and it's easy to miss some important ones that you've put off during the recession. • Building maintenance and repair—particularly things that impact curb appeal like signage, parking lot appearance, and landscaping. • Showroom remodel or upgrade—things like paint and carpet cleaning often get delayed but make a huge difference to customers. Now's the time to spiff up the store. • Lighting improvement—new lighting options are not only energy and cost efficient but can really make a difference in how products look. • Increase in staff salary, bonus and commissions—during the downturn, your team probably worked harder than before and in many cases even took salary cuts or other reductions. They've contributed to your turn-around and should be compensated for their tenacity. • Improve employee benefits—many businesses eliminated or reduced benefits in the past few years. Find out which perks mean the most to your staff and consider upgrading some. • Additional staff training—unless it was held in your neighbor- hood, it may have been hard to justify sending your team members out for new product training. You may have reduced the number of people going to buying group meetings and events. With reduced staffing you may not have been able to cover the floor well enough to do regular in-store training. Now's the time to bring everyone back up to speed. • Technology upgrades—perhaps you didn't upgrade your POS system to your provider's most recent version. Hardware may be slower than it should be or you may be short a printer or a couple of workstations. Or maybe your sales associates don't yet have mobile devices to use on the floor with their customers. Technology investments often get postponed but eventually need to be made. • Reduce liabilities—it may be time to pay down your working capital line of credit. Be sure you continue to pay your floor planning promptly and if possible, reduce your outstanding and leave a little more open-to-buy available. Monitor your current ratio (current assets /current liabilities) closely and be sure you don't "owe" more than you "own." Next make an investment budget and determine how much you have available to spend on some of these action items. Determine priorities—which ones will give you the most bang for your buck. Now tackle the list. But do so judiciously and with some caution. By developing an investment plan for the near future, you'll have a roadmap to follow to finally do many of the things you've put off for the last few years. And it's always great to scratch things off your "to do" list. BUSINESS RECOVERY PLAN

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