I'm happy to say we're still growing at a healthy pace in year five. As hard as it is for us, it's far easier than more mature stores that see a percent or two of growth each year, or even a loss. You have to figure that inflation is around 3-4% a year. So a store needs growth just to keep up. Also, since expenses are "net" expenses, and sales are "gross" sales, that needed number is actually much higher. So how do stores do this? The trite phrase that has been stuck in my mind since watching an episode of Warehouse 13: "A penny saved, is a penny earned."
As I've mentioned before, part of store ownership is constantly going over the books and trying to find a way to cut costs. The two biggest expenses are rent and wages. Rent is a hard one, since we're contractually obligated to pay it, even when rents over the lease period have dropped a bit and new tenants are getting insanely good incentive. As for wages, I can be more disciplined in how I handle employee hours and scheduling, but in a store our size, there's not much I can do. Stores in cheaper parts of the country can get away with extra employees, so they've got more wiggle room. Surprisingly, many store owners, including some of our competitors, don't even pay themselves (It's good to have a hobby). After these big fixed expenses, the biggest discretionary expense is advertising.
A recent customer who was getting her BMW fixed across the street turned out to own a marketing company. We talked for about an hour after she observed the business in operation, especially talking to the customers. Nobody had taken the time to do this before, as most "advertisers" walk in with assumptions about your business that need to be beaten out of them until they understand, or they'll completely waste your money. I put advertisers in quotes, because these folks are really about churning out commercials or printing ads; advertising is the tactics of marketing, while my job, and the job of this woman, is the strategy of marketing. What do we want to accomplish? Who is our audience?
The bottom line is my largish marketing budget will be cut even further. TV and Yellow Pages advertising will finally get the axe. They had already proven to be not as effective as I had hoped. These were things I knew in the back of my head, but it was nice to have someone else verify this. She gave me some other ideas to pursue. My marketing goals right now are to remind our existing customers of our presence, and focusing on the nearby community so they know of our existence. One goal mentioned by this marketing expert was that everyone in my zip code should know we're here. That's my next marketing project.
Let me know if you have any tactics for my strategy.
