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Let's assume your stores have been closed for weeks now.
We recognize how conscientious you are. So, after paying what you can to your employees (and yourself), the next most-worrisome dilemma is your rent.
As you likely have discovered, a common choice for many landlords is to offer to defer your payments. But that means taking on more debt, as those payments are only being postponed to a later point in time. You need a better solution than that.
What you need is a Big Picture financial plan that you can share with your landlord who, likely, would like to be part of your solution, not just a problem. Here are some steps to get you to that better solution. Step 1: Look ahead to what "recovery" means Use your 2019 results as your baseline for comparison. Then, compared to 2019:
Next, on to the 2021 plan! Don't stop now (and don't look down.) The goal is to see how the "New Normal" could look.
Okay, now pause: take a careful look at this.
If yes, congratulations! Okay, armed with those plans, on to the next step. Step 2: Set a meeting with your landlord. Remember, your landlord has almost as much at stake in your survival as do you. Now is the time to team up! Prepare these items for your show-n-tell.
Next, show what your vision of survival, the "New Normal" looks like...financially!
The Big Reveal You reasonably expect your business to be thriving in the New Normal! And that means a thriving tenant for your landlord!
Yes, as a plan, it is only as good as the assumptions. But, you can explain and defend all of those assumptions. And, you can expect your landlord to make some further suggestions, which can be very helpful. This is how you team up. Step 3: And now, one more part of these discussions. It's not just new lease terms you need to negotiate. You will be needing some additional leasehold improvements. In order for your store to meet those sales assumptions for 2020 and 2021, there probably will be some changes that must happen BEFORE YOU CAN RE-OPEN.
For instance, changing the layout to allow more distance between shoppers; expanding aisle width; separating cash wraps; increases in lighting; enhanced cleaning, etc, etc.
Be sure that you address these leasehold improvements: Who will be responsible? Who will pay? Daring to Look Ahead You did the hard work. You made the assumptions. Drastic sales declines; wrenching expense cuts. And then you dared to look at what that might mean in financial terms. True, a grim 2020. But a business on a path to a better 2021 and onward! Most of all, you positioned yourself as the reasonable business person you are, not a victimized tenant. Much better than begging, right??
Well, actually, Christmas will be here the same time it always is: December 25.
However, what does change are the cues for the shoppers.
That is, Thanksgiving falls as late as it can this year, on November 28. That means, for those keeping score at home and for the breathless business pundits, there are only 26 shopping days between Thanksgiving and Christmas. This is six days shorter than a year ago, and the shortest since 2019.
That's why some retailers, especially those that are publicly traded, are making mighty efforts to lengthen the shopping season.
But, is there actual value in trying to prompt shoppers to start their Christmas shopping before they have even handed out Halloween candy? Yes, but...
We hear it over and over. "Good business citizenship" matters to shoppers. Might Labor Day weekend be a good time to start getting the word out about your citizenship contributions? Customers vote with their feet, their wallets, and their hearts, and increasingly choose those retailers who "do the right thing", whether it's how they source product, hire and pay employees, reduce environmental impacts, etc. There are things that independent retailers do day in and day out, without perhaps even realizing how special they are! Most retailers we know are "aw shucks" type people. It's charming, but, especially in today's world, your leadership can be a competitive edge! So, why keep it a secret?
There's a very important annual job for you, the owner, and all of your senior staff. It's vital, and it involves your presence. The pressures are mounting on your stores, and in particular, your front line staff.
As your stores are able to re-open after the coronavirus shutdowns, how they look tells a powerful story. And for you, a great opportunity. This is no time to try to go back to normal, back to business-as-usual. Nor to simply have all kinds of protective shields in your store. While necessary, how welcoming is that? Instead, this actually IS a second chance to make a good first impression! Take full advantage!
This is, after all, The Retail OWNERS Institute. We long have specialized in alerting, coaxing, and applauding retail owners worldwide. Today's message is a major heads-up. Keeping pace with the relentless changes in retailing has never been easy. Retailers know that constant adjustments are demanded. Then, the three pandemics of 2020 happened: COVID; the economic meltdown; the social unrest. And life changed modestly or enormously for almost everyone, including owners of retail businesses.
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