Outcalt & Johnson: Retail Strategists, LLC
  • Home
  • Perspectives (Blog)
  • Thought Leaders
    • Retailers Hold the High Cards Now
    • Coming Soon: Impending Blight
    • Amazon's Relentless Disruptiveness
    • 3 Levels of Retail Accountability
    • 9 Steps to a Retail Growth Plan
    • Turnaround Case Study
    • Follow on Twitter
  • Innovative Team
  • When to Call Them
  • What They Do, and How
    • Strategic Retailing
    • Sell My Store, Please!
    • Retail Turnaround Experts
  • Projects by Client Type, Size, Location, etc
    • Crisis/Turnaround
    • Assessments/Action Plans
    • Owner Issues/Organizational Development
    • Growth Management/Target Marketing & Merchandising
    • Financial/Restructuring
  • Links to Recent Clients
  • About
    • Bios/Credentials >
      • What People Say About Them
    • Co-Founders, The Retail Owners Institute®
    • Retail STRATA:G® Online Resources
    • Get to Know Them: Online Webinars
    • Retail Speakers
    • Custom Webinars
  • Contact

Say "Yes!" to Growth? Maybe...

6/14/2021

 
Picture
As we emerge from the pandemics, many retailers are eager to grow. (How's that for an understatement?!)
  • For some, that simply means having a better year than 2019 (because 2020 was such a disaster), and they relish having survived.
  • Others are looking to expand by adding locations, whether by acquisition of existing stores, or taking advantage of vacated retail sites. 
  • Still others are focused on expanding their newly-established e-commerce capabilities. 
  • And, for some, still other imaginative ways.

​Trade shows are opening up 
with great success and eager buyers. Landlords are eager to fill vacancies, and in many instances, to cut deals. Vendors are eager to quit thinking about supply chain problems and start selling their merchandise, especially at trade shows. Plus, the continued growth and expansion of online wholesale marketplaces makes far more product available to retailers. 

Then there is the access to capital. Lots of money is floating around out there

All in all, it creates an environment of exuberance. "Seize the opportunity" is the rallying cry. Indeed, for some retailers, FOMO – that Fear Of Missing Out – is pushing them to make some major decisions. 
Here is a three step process for retailers to get some Big Picture perspective on this. 

Step #1: Be honest with yourself when answering these three questions:
  • Do we have the CAPACITY to grow? (Financial strength (check your debt-to-worth ratio and current ratio); people; systems; vendors; locations; customers; etc.)
  • Do we have the APPETITE to grow? (And a strong mid-management team?)
  • And now the key question: Especially after 2020, do we have the STOMACH to grow?? 

That final question, of course, has to do with 
your tolerance for risk. No matter how much money someone will lend you (and there are many folks eager to extend credit right now) how much debt are you comfortable taking on? How much of your personal capital are you willing to put into the business?
  • Re-check your debt-to-worth ratio, both where it is now and, importantly, where it would be.
  • What about other risks, whether finding people, locations, customers, whatever? 

​After all that, do you have a resounding "Yes!" to those three questions?
Okay, on to the next strategic decision.

Step #2: What do you choose as your growth strategy? 
You see, for retailers, there are Four (Only!) Ways to Grow, based on the two fundamental variables for managing growth. One is your Merchandise; the other is your Customers. 

Above is a chart that shows how those intersect (see a more detailed discussion here on The ROI site.)

No matter which growth strategy you choose to pursue, there are 
implications on all of your resources, especially human and financial capital. 

All this need not be a time consuming process. We know that retailers can think fast! Just make a conscious choice of which one of the basic four ways to grow you intend to pursue. 

Step #3: Revisit the three questions in Step #1
  • What will it take to have the CAPACITY to pursue that growth strategy? Anything beyond what you already have in place?
  • Given that, do you still have the APPETITE?
  • And the STOMACH? 
For those who are definitely in that resounding "Yes!!" camp, more power to you!

You can proceed with more confidence; you have a clear strategic choice in hand. You now have a basis for all the forthcoming hard decisions. And tools for explaining your decisions to staff and family. 
 
©Copyright, Outcalt & Johnson: Retail Strategists, LLC and The Retail Owners Institute®

Comments are closed.

    Tips, Tactics & Insights  from Retail Strategists

    All
    Culture
    Financial Strength
    General
    Inventory Management
    Leadership
    Owner's Responsibilities
    Pandemic
    Perspective
    Retail Growth
    Retail Projections
    Strategic Opportunities
    The Economy

Services
Perspectives
Thought Leaders
Contact

About
Outcalt & Johnson: Retail Strategists, LLC • A Consulting Team for the Retail Industry