PERSPECTIVES

From The Co-Founders

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Tips, Tactics & Strategic Insights and Commentary
from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

Back-of-the-envelope cash flow

Here we are, in the first week of December, in this tumultuous pandemic year of 2020.

Maybe more than ever, you need to have a grip on your cash flow! What will you cash flow look like during December, January and February?

Since you must be able to make informed decisions about your business, every day, an up-to-date cash flow calculation is essential. Remember, profits are interesting, but it's cash flow that's significant!

Cash flow doesn't have to be fancy. In fact, what most owners need is just to have the basics on the back of an envelope. The savvy ones always have that with them.

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As the global efforts to "flatten the curve" of the coronavirus pandemic continue, there is another curve that is being flattened. That would be the seasonality of retail sales. 

And this may prove to be what really defines the New Normal for retailers. 

The customary peaks of retail spending have been flattened.

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Have you noticed? "Covid fatigue" has been spreading lately. It seems to be almost as contagious as the virus itself. Ugh!

And small wonder. Even as parts of the economy strive to re-open, they only remind us of how different everything is.
  • Major League Baseball played in stadiums of cardboard cutouts of fans. The U.S. Open Golf Tournament with no spectators. Professional basketball teams in "the bubble" at Disney World. 
  • And some colleges preparing to resume fall classes have been described as "a cross between a seminary and a minimum-security prison."
Meanwhile, the U.S. Congress cannot agree on what should be done next. A nasty election campaign season looms. Protests are still happening in many locations. 

Remember this: all these things that contribute to our Covid fatigue, what we have called the "Pandemic Trifecta of 2020" – the virus, the economic meltdown, the national protests – all of these are uncontrollables. We all are victims of all three pandemics. 

But, you CAN control what you choose to do with your business going forward. Will you choose Door A, Door B or Door C? 

There are three "pandemics" assailing us at the moment: the coronavirus; the economic collapse; the protests of racial injustice. The three months plus of stay at home restrictions and the shutdowns, and the confluence of these three pandemics has been a heavy burden. And it shows no signs of going away anytime soon.

As the coronavirus continues to spread and surge (Apple re-closing 11 stores they had recently re-opened is a sobering reminder), the uncertainty and anxiety is only being prolonged.

 

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We believe there are not one, but three(!) pandemics occurring simultaneously right now. Of course, the COVID-19 virus elevated the word "pandemic" to a status that identifies even a generation of babies. 

But the other two pandemics are equally paralyzing: the nationwide (even worldwide) protests of racial injustice, and the severe unemployment from the economic collapse. 

Indeed, three concurrent, worldwide sinkholes. We call it the "pandemic trifecta of 2020."


So, what's an intelligent retailer to think now?!

Here's one idea that we believe can help you have more confidence in your immediate decisions. Think beyond this week and this month. 

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YOU are the leader we need now!

Most of the people who receive our weekly newsletter from The Retail Owners Institute® are either owners of stores (duh...) or work with retail owners, not only in America but around the world.

When you think about it, owners and senior management of retail businesses are looked upon as leaders everyday, by employees, by suppliers, by customers, by their families and often by the media. You are community builders. 

Amidst this pandemic, your leadership is more vital than ever.

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Independent retailers are renowned for being "technology laggards." Those days have to end!

As you wait and worry about re-opening your stores, the state of the economy, the health and safety of your family and friends and employees, here is an idea of what you might do with some of your found time. 

When you do re-open, be sure that you are actually in the 21st Century! Put your energy, your resilience, and your flexibility to use, focusing on improving your IT.

The goal: When you re-open, be even better than your competition! And more relevant to your shoppers.

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Some thoughts from Nordstrom leadership that are spot on!

  • “We started this company from scratch, so what would we want to be, knowing what we know now? It’s clear we can expect a new normal. And it's up to us to decide what that will look like. We're each being presented with the unique opportunity to create a future worth envisioning.”

That's what Nordstrom President and Chief Brand Officer Pete Nordstrom told Puget Sound Business Journal columnist Patti Payne on April 23, 2020.

And what he succinctly stated is exactly the challenge – and opportunity – that is confronting all retail owners. 

In order to answer whether you should re-open once you can, you first must be very confident in WHAT kind of retail operation you will be re-opening.

The only certainty of the aftermath of the pandemic is that everything will be different. Given that, what better time to re-imagine your business?