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Dollar Store Cost Controls are Critical to Success by Bob Hamilton
Are you starting a dollar store? If so, do not make the mistake of assuming you are not entering the world of small business and as a result the need for good business management is not there. Do not assume you won��t need to establish practices to control all aspects of your business. In fact control of dollar store costs, sales and dollar store profits will soon become your most important management responsibility. In this article I focus on cost controls. We will examine actions to take with 4 of the most important costs associated with your business.
�� Lease or Rental Agreement
Negotiate hard for the lease concessions you need to make the deal work. Never allow emotion to enter into your negotiation and final decisions. Do not pay more than a storefront is worth. Always focus on achieving fairness for both sides. Look for concessions you are willing to give in exchange for concessions you need to make the deal. When starting a dollar store seek the advice of a good attorney before signing any paperwork.
�� Set ��Open to Buy�� Guidelines
This simple tool can single-handedly keep your spending for dollar store merchandise under control. It is a process to match new and replenishment dollar store merchandise purchases to current sales levels. If you have these guidelines in-place and remain disciplined in sticking to them you will find you are motivated to continually drive cost from your wholesale merchandise purchases. You will also avoid over-buying.
�� Set Cost-of-Goods-Sold Goals
As noted in ��open to buy�� you must manage your wholesale dollar store merchandise buying costs. Month after month you will find the cost associated with replenishment dollar store merchandise tops the list. With such high volumes it is easy to make incorrect buying decisions and end up over-buying. Establishing aggressive cost-of-goods-sold goals will drive you to continually look for new, creative methods of cost reduction. As a result your dollar store costs per item of merchandise should be decreasing over time.
�� Set ��Cost-of-Labor�� Goals
When starting a dollar store it is important to always keep the dollar store costs associated with labor under control. One of the easiest ways is to assign a percentage of sales number to labor. Once again this method aligns dollar store costs for staffing to store sales levels. As sales increase or drop there is a corresponding movement of your labor costs.
To your success when starting a dollar store,asics rotation 77!