Small things businesses can do when revenue falls
Don’t panic if your revenue dips. Instead of hastily adopting a new strategy, consider whether you can make small changes to existing processes and revenue streams.
These tiny tweaks have a compounding effect and can make a big difference.
Increase your online presence
A strong online presence helps you to connect with customers, solidify your reputation and drive sales. For Sidonie Warren, founder and CEO of Papersmiths, developing the digital offering was essential when her business experienced a fall in revenue due to lockdown.
Traditionally, only five per cent of Papersmiths’ revenue came from online sales. The small chain of stationery and bookstores was forced to close during lockdown. Sidonie expanded its digital presence and ecommerce transactions increased by 200 per cent week-on-week.
“I’m spending my time and energy on extending our online offering. We saw a huge uplift initially and now it’s growing steadily. That’s giving me the chance to grow my marketing skills, and find out what’s working and what’s not,” Sidonie said.
Tweaks the company has made include developing an Instagram profile, setting up email marketing, expanding the ecommerce offering and launching a newsletter. Sidonie said the changes have had such a positive impact that it has been a challenge to keep up with orders.
For Sidonie, learning new skills was a relatively small step that had a huge effect on Papersmiths at a difficult time. It’s something she will continue to develop going forward.
“There’s so much more I want to do, SEO, Google Shopping, expand the inventory, get more depth of stock so we don’t sell out of things so fast.
“We won’t create new stores but we will keep the three we have. They’re special spaces customers like to get lost in. The staff are experts and our products are something people always want to pick up and touch and try. But I’m excited about the online focus as an opportunity,” she added.
As the physical stores are based on the tactile experience of products, the team has been working hard to express that digitally.
“It's difficult to recreate that online but the way we’ve done that is through images and descriptions. We’ve put a lot of work into product descriptions, ensuring they have the Papersmiths tone, and choosing images that really showcase the experience. We’ve really taken a step back to make sure the online store is as good as one of our physical stores,” said James Green, operations manager of Papersmiths.
“Managing cash flow is the best thing I’ve learned as a business owner. This process helps me decide when and what to juggle or hold back on spending."
Sidonie Warren, CEO, Papersmiths
Get a grip on the numbers
Moving to weekly cash flow forecasting is an easy tweak that can have a big effect. A greater insight into the numbers can indicate whether you should be cutting-back or investing.
Sidonie does a 12-month forecast with her accountant and a three-month rolling update with bank transactions each week, using Xero and an aged payables report to schedule supplier payments.
“Managing cash flow is the best thing I’ve learned as a business owner. This process helps me decide when and what to juggle or hold back on spending. In fact, cash flow has helped me break through my fear about not having enough money to do things in the business,” she said.
The costs might also reveal unnecessary spending. The operations director at Papersmiths used to visit all the separate stores on a weekly basis. By cutting back on these physical meetings and catching-up via Zoom, the business made savings and created more time to focus on ecommerce.
business size: 10-49 People
business type: Retail & wholesale
Top three takeaways
An online presence helps you to connect with customers, solidify your reputation and drive sales.
Weekly cash flow forecasting can indicate whether you should be cutting back or investing when your revenue falls.
Identifying areas to upskill, such as ecommerce and social media, can have a huge impact on your business.