You put out a lot of money to open your store. Money that bought your leasehold improvements and store fixtures. Money you spent on promotion and displays. And of course, money you spent on inventory. Now you should be done spending.
But most retailers continue to put more money into their store to pay bills and invoices because the cash generated from sales is not sufficient. And it’s not really because the incoming cash is too meager, it’s actually that there are too many merchandise invoices. Consequently, inventory is building up and more cash needs to be infused to keep the doors open.
The problem is that retailers aren’t using open to buy planning to develop their buying plans and monitor them. Open to buy will give retailers a 12 month buying plan in each merchandise category month by month so they will keep their inventory in line with sales and turning at desired rates. This will always mean a positive cash flow and a monthly profit. Always.
So, if your goal is to have your store pay YOU, you need open to buy planning. Once you get set up, you’ll know exactly where your inventory and future orders are out of balance. Bringing these into line will fatten your bank account and insure that your store will support you rather than you supporting your store.