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When starting a dollar store you will see cost reduction as the never-ending task. The challenge is to continually reduce the dollar store costs associated with your business while also growing sales. The importance never goes away. Cost cutting isn’t something you can stop doing just because you finally made some headway. You must always be working to eliminate waste and to reduce the costs of doing business. After all, every time you save on costs you are adding to the bottom line of your business. In this article I present 5 places to focus when cutting cost associated with your dollar store. Focus #1is your store lease. If you are starting a dollar store for the first time it is only natural to focus your search on the best possible location. When you discover that perfect location you become focused on getting a lease for that specific location no matter what the cost. While having the best possible location is absolutely critical to business success, cost is very important as well. Lease negotiation is your one chance to reduce those costs. Be sure to work for concessions that provide some time for the start-up and growth of your new business. Success won’t happen over-night, so buying a little time at the start will be helpful. Focus #2 is your employee payroll. While over-staffing can make it very easy on you, the dollar store cost associated with this luxury simply will not justify the expense. Keep a tight rein on staffing levels and the associated payroll. Establish payroll goals and adjust staffing levels only as sales growth warrants. Focus #3 is merchandise costs. As you business takes off merchandise replenishment will become the number one cost of doing business. Cutting the cost of goods sold by even a small amount can mean big time savings. Reduction of even one or two cents can mean thousands of dollars saved over the span of a year. Focus #4 is merchandise transportation costs. Continually work to reduce freight costs for your business. Negotiate freight caps for larger orders. Ask suppliers about options for getting freight paid on orders. Look for lower cost freight haulers. Order merchandise closer to home. Continually work to reduce your transportation costs. Focus #5 is advertising and marketing for your business. While some may immediately assume this is a dollar store cost that can go to zero, that is not true. Wisely investing in advertising and marketing is an investment in the future of your business. It doesn’t require thousands and thousands of dollars to support a solid program that contributes to the long-term growth of your business. To your success when starting a dollar store! Want the best ideas to earn from your dollar store business? Check out "Tactics to Add Streams of Income to Your Dollar Store Business" at www.OpeningADollarStore.com.
Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer.
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