From the blog Fixing Your Furniture Store Profitability Depends on This
Even with excellent sales numbers, it can be difficult to maintain furniture store profitability. Raising prices is a solution that too many store owners automatically turn to when trying to improve profit margins. This often leads to lower sales numbers and can hurt your business’s reputation in the community. Other businesses take the opposite approach and slash prices to liquidate inventory. While this will likely lead to an increase in the number of sales, huge discounts rarely lead to an increase in profitability.
The best way for furniture stores to be more profitable is taking a set of small steps that lower operating expenses. While the indiv changes you make won’t single-handedly fix your profit margin issues, taken together they’ll make significant cuts in your operating expenses. Here are a few easy ways for your furniture store to be more profitable by decreasing expenses.
Keep Staffing Lean and Well-Trained
Many furniture stores fall into the trap of hiring too many employees while not giving them the proper amount of training needed to succeed. Instead of managing a large staff that contributes to higher operating costs, tighten your staff and provide them with training that allows them to provide customers with the best customer service. Of course, it’s important not to pare down your team too much. With too few employees, you’ll risk appearing understaffed and will be unable to provide customers with great service. Help your employees to be experts on the products you carry and treat everyone who enters your store like they’re the business’s most important customer. The lower number of employees cuts down on costs while allowing you to provide each worker with focused, comprehensive training.
Energy Efficient Lighting
Due to the size of the products being sold, furniture stores typically have a large footprint. Additionally, a well-lit and attractive showroom is extremely important for furniture stores. The need to keep a large area well-lit throughout business hours can lead to high energy costs for furniture retailers that don’t take an energy-efficient approach.
Making just a few small changes to your business’s energy policy can have a noticeable impact on your bottom line. According to an Environmental Protection Agency (EPA) study, up to 8% of businesses’ operating costs were from energy expenses. Instead of using a standard lighting system, your business can save as much as 50% when using energy efficient lighting.
Find a Better Payment Processor
Today’s furniture retail businesses need to work with a payment processing company that best serves their needs. This is especially true for furniture stores that sell big-ticket items typically bought with credit or debit cards. If you pay excessive fees to your payment processing provider, it might be time to consider shopping around for a better deal. Also consider whether the equipment is included. Many vendors provide their clients with the first payment terminal for free. Additionally, the best processors also repair or replace the equipment when there are issues.
Maximize Advertising Efforts
Advertising is essential for a furniture business. The most successful companies achieve targeted mass exposure to the kinds of customers that are most likely to frequent their business. This is true no matter what the media channel, whether online, television, print, or radio.
Whatever way you best reach your customers, be sure to market and advertise efficiently. Instead of dabbling in a wide variety of advertising techniques or media channels, find the handful that work best for your business and maximize their effectiveness. Limit the total area your advertisements cover. The money saved from shrinking your radius can be used to concentrate efforts over a smaller range, giving your business mass exposure in the places that matter most while simultaneous saving money on operating expenses.
When you find your business struggling with profitability, it can be tempting to simply raise prices or offer blow-out promotions. While these techniques may temporarily solve your cash flow issues, in the long-term they’ll only hurt your business.
Instead of finding ways to increase the amount of money coming into your business, cut energy costs with efficient modern lighting systems, use focused advertising and marketing techniques, limit the size of your staff, find the best payment processor available, and invest in customer relation management software. While each approach will not have a huge affect on the bottom line, taken together they’ll help keep your furniture store profitable.