How Cash Flow Forecasting Grows Your Retail Business Faster

Are you keeping a close watch on your cash flow? Remember that cash flow is the bloodline of every SME company, and for your retail business, it’s no different. 

A positive cash flow for your retail business means you have enough cash to meet your overhead costs and invest back into your business. Therefore it’s really crucial that you closely monitor your financial standing through excellent cash flow management and forecasting using the Moolamore app so your retail business can drift away from the dangers of insolvency and instead grow and thrive all year round.

In this blog post, you’ll find everything you need to know to be more familiar with the retail sector and various cash flow tips on how to drive growth success in your retail business. Let’s begin!

Defining Retail Business

To elucidate, a retail business or also known as a retail trader refers to a business that sells items and services straight to consumers for their personal use, consumption or pleasure—and not for resale. 

Usually, the transaction can happen through several various sales channels, such as brick-and-mortar in-store locations, online, direct mail or over the phone and then delivered to the customer. Hence, the characteristic of the sale that certifies it as a retail arrangement is that the end user is the buyer or purchaser.

Retail Business vs Wholesale

While it may look like both retail businesses and wholesale sell the needs of the public—the two still have different meanings:

• Target Market – Wholesalers are more intentional for small-scale business actors, such as food stalls. Thus, if you need a massive number of products, you can still shop in bulk. 
• Purpose of Sales – Retailers or merchants purchase goods from wholesalers or manufacturers. From there, they will sell or offer those goods to end consumers for personal consumption only. On the other hand, once the production of raw materials is complete, the wholesalers will sell the goods in large quantities to retailers at low prices, which retail traders can resell.

Types of Retail Business

The type of retail business is categorised primarily according to the products sold, ownership, and business scale.

A) According to the Products Sold

1) Product Retail – Retail concentrates on selling specific goods. A good example is a thrift shop specialising in selling secondhand or preloved outfits or clothing.

2) Service Retail – Aside from goods, there are also types of retail that concentrate on offering services (e.g. motorbike or car repair shops)

3) Non-store Retail – Not all retailers utilise human power as the prompt of sales success. There are also types of retail that depend on machines (e.g. goods sold in vending machines which is more practical and flexible for consumers)

B) According to Ownership

1) Independent Retail – As the name suggests, this type of retail runs independently, which means the ongoing operations do not rely on other parties. Examples are food stalls, shophouses and grocery stores. 

2) Retail Francshise – This is identical to the central company, where there’s no need for franchise business owners to start an existing business from scratch. Following the rules of the game from the centre and purchasing property based on the agreement is sufficient. 

C) According to Business Scale

1) Large Scale Retail – This type of retail offers a broad selection of complete products with numerous options. (e.g. chain stores, department stores, convenience stores etc.)

2) Small-Scale Retail – On the other way around, this type of retail tends to sell a limited number of products. (e.g. non-permanent sellers, street vendors and mobile vendors)

Examples of Retail Business

In a nutshell, here’s a list of retail businesses samples:

• Convenience store
• Grocery / Supermarket
• Department store
• Drug store
• Specialty store
• Discount store
• Online / eCommerce store
• Mobile retailer
• Internet retailer
• Warehouse retailer

Functions and Importance of Retail Business

No doubt—the role of retail businesses in everyday life and the survival of society are crucial and mutually valuable for both parties (buyers and sellers). So let’s look at some of the functions of a retail business:

• The presence of a retail business makes it convenient and hassle-free for customers to purchase or obtain items according to their wants and needs. 
• Aside from helping consumers get their desired goods, a retail business also assists in product promotion. Usually, retailers have product catalogues, salesforce and customer service to boost sales of existing items. One example is by enlightening potential customers about the significance of maintaining oral hygiene by using certain brands of toothpaste. 
• Since a retailer is the end part of the supply chain that directly interacts with end consumers – it grants services to manufacturers by helping them make the necessary improvements in the quality of products and services according to the views, likings and disliking of consumers and thus increasing the revenue generation of manufacturers. 
• A retail business creates value and utilities. Creating a time, place and utility in the distribution of items maximises product value. In addition, retailers purchase bulk goods, break them into small quantities, and sell them in small packs, thereby building utilities. 

Where Moolamore Sets In: How Cash Flow Forecasting Grows Your Retail Business Faster

Excellent cash flow forecasting with the Moolamore app is a game-changer for your retail business. Here’s how:

1) Monitor Whether Your Spending Is On Target

With a reliable cash flow tool, Moolamore—you can understand precisely when or whether you will reach your revenue goals and targets. It lets you see the cash movement into and out of your retail business and determine whether you’re over or under budget. And with that, you can maximise the accuracy of your future budgeting. 

2) Protection Against Deficiency and Gaps

You can be at peace of mind that you’re growing your retail business in the right direction with Moolamore. This tool’s real-time cash visibility, scenario builders, and comprehensive analysis allow you to easily spot potential risks before they become a long-term problem for your retail business. With that, you can take proactive measures to mitigate them. By employing Moolamore, you can guarantee you don’t get caught off guard by unexpected expenses or losses that could derail your growth plans.

3) Optimise Your Inventory Management

Good inventory management is essential to the success of your retail business. Of course, you want to leverage bulk order discounts, but at the same time, you don’t want to have excess inventory. Thankfully, the Moolamore app will help you find the balance between these two. This cash flow forecasting tool empowers you to stay ahead of the curve and market trends. 

You’ll gain insights into where the customer demand is, giving you an idea of what top-selling products you should order in bulk that will reduce your per-unit cost. Likewise, if times are slow, you’ll also be able to identify your economic order quantity and your slow-moving products in stock. With that, you can take action to speed up turnover through sales and other promotions.

4) Know When and How to Grow

Growing a retail business can involve many expenses—inventory, distribution, product development and marketing. This is where Moolamore comes in handy. With this tool, you have a clear grasp of your cash position, and you’ll know exactly what cash you have on hand so you can plan smarter on how to grow your retail business efficiently. 

Conclusion

If you want to manage and grow a successful retail company, then it’s a must to equip your business with a tool like Moolamore to smooth out the bumps in your cash flow management, identify possible financial risks before they get out of hand and empower you to make brilliant and more responsible decisions. Furthermore, in today’s uncertain climate, wherein competition is fierce and consumer demands are becoming increasingly hard to satisfy—having a reliable forecast is more important than ever. Thanks for reading!

Stay on top of your cash position with Moolamore—a life-changing tool that can help your retail business not only survive but thrive. Schedule a demo today!