Plan for the New Year
Now that the holiday rush is behind us, it’s time to solidify your plans for 2007. It’s always difficult to predict business conditions but we may have a rough ride ahead. Housing starts are slowing, the job market is shaky and consumer confidence is lagging. The National Retail Federation forecasts sales this year to grow by only 4.5 percent—nearly 2 percent lower than the growth rate for 2006.
Retail success this year will be driven by action, not by market conditions.
Plan for Profit. This year, budget your bottom line first. After you determine how much money you want to make, work backwards to decide what your sales volume, margin and expenses need to be in order to hit that target. Too often retailers rely on a “what’s left after everyone else gets theirs” philosophy instead of planning to be profitable.