reasses

There's never been a better time to reassess your RBM (retail business model). An analysis of the key areas of income (revenue streams), your supply chain, the changing consumer, sustainability and innovation gives you an opportunity to restructure, revise and reinvent which is a normal part of business strategy development.

Right now is a great time to start writing down some of your ideas and developing a to-do-list to help you get the ball rolling. Looking at all the possibilities helps you to see all your options more clearly. Sometimes, starting with a business SWOT analysis can be very helpful.

It's a simple exercise that requires you to be objective about your business in these four key areas. In the squares below, write down in general terms, what you think are your strengths, weaknesses, opportunities and threats. It's a good idea to use a pencil so you can amend your ideas as you work through the book and develop your new strategy as you read.

After completing this exercise, you should have a more strategic focus for planning and be thinking along the lines of moving forward through change. The Opportunities section is of great importance, as it may help you to see a way forward.

For example, you may be planning to open longer hours or to develop an e-commerce website that makes sales for you while you are relaxing at home with your family. You may be planning to move to a better location and pay less rent or to improve inefficiencies in order to run on less staff. You may be thinking about incorporating labor saving technological advancements in order to cut costs. This SWOT analysis simply highlights areas for you to mull over in your own context. The future is full of new and exciting challenges for specialty retailers, so let's get to it and reshape your retail brand!

Your retailscape

Secret 1-Take a mixed revenue approach

The past definition of retailing was bricks and mortar selling: your customers buying a specialty range of goods that you purchased at a trade price from a local or national supplier for resale and consumption.

Consider that the retail landscape or retailscape has changed forever. Gone are the boom pre-global financial crisis days. Sales of bricks and mortar retail may never return to those levels thanks to a number of factors. The Internet, economic, environmental, social and generational changes are now influencing consumer purchase behaviours. Contemplate that your retail business demands diversification and change to remain relevant as your omni-channel retail competitors, the consumer, technology and the information highway drive us all forwards.

One way to consider diversifying is through a mixed revenue approach. Think of your business as an apple pie with a number of slices that are all different serving sizes. Each slice makes up an ever-changing percentage of your revenue or income from a different segment. These slices evolve and morph over time but at the end of the year, add up to positive growth, or weight gain!

Diversifying revenue streams adds strength to your RBM just like it adds strength to a share or property portfolio. It mitigates the risk of relying on a sole income stream or sole supplier and allows you flexibility to change direction quickly if business conditions require.

As an example, let's say you are a florist located in a shopping centre. Your mixed revenue model or apple pie is divided into eight slices:

1. Store sales

2. Online sales

3. Phone orders and home deliveries

4. Interflora orders

5. Weddings

6. Funerals and special occasions

7. Hotel foyer arrangements

8. Supply to local fruit shops and mixed business for resale

The last two segments could be on your list to target for future growth. Of course, you can add or subtract whichever slice you like; it's your apple pie! These are simply ideas to get you thinking about additional market segments or revenue streams you can add to your already established business. Segmenting your revenue streams in this way allows focus and diversifies business structure to target development of each segment or slice. It enables clear goal setting and provides strategic direction for controlled growth. It also helps you identify strengthening or diminishing segments of your revenue.

Throughout the book, I share real stories and examples of today's retailers from around the world. Some of the stories are shining examples of inventive and proactive businesses that incorporate change and others are of experiences that have plenty of room for improvements!

Here is the first example outlining how a local specialty musical instrument store's revenue slices have changed since 2008. The store's owner has projected future growth and decline based on trending numbers. Note how the e-tail (electronic retail) channel, which was at zero in FY2008, grew to prop up the unprecedented trending decline of the traditional bricks and mortar retail channel and how the mobile commerce channel is predicted to grow rapidly. The challenge is to ask yourself how this concept can be applied to your business to facilitate sustainability and growth into the future.

Now is the time for outside the square thinking to move forward incorporating diversification to enhance economic sustainability.

To get your thinking started, let's look at a few ways to diversify your revenue streams. Perhaps you can sublet a space in your premises to a complimentary business that increases foot traffic whilst decreasing overheads. `Bigbox' retailers in America have been doing this since the 1990s with Starbucks and other complimentary retailers who not only pay rent for space within enormous stores, but add to the attractiveness and overall experience of the shopping destination.

In the Australian marketplace, Masters Home Improvements have incorporated McDonald's into some of their store locations. McDonald's not only pay rent for the space but the brand encourages customers to stay longer in-store and may even increase customer traffic to the store.

Department stores worldwide have been successfully using the store-within-a-store model for over a century where floor space is rented directly to manufacturer brands, particularly in fashion and cosmetics. Hairdressers often take this approach with nail technicians or beauty professionals who sublet a small floor space to minimise overhead costs.

Another Australian example is independent retailer `Wallingtons' in Victoria who has incorporated this strategy by placing a national brand paint store within a `bigbox' hardware, timber, gardening and pet store. This enhances both the diversity of the business model and the retail destination for customers. It allows the paint segment of the business to enjoy national marketing, better buying, merchandising programs, training and other benefits offered by the member group.

I recently read about a store in Melbourne's Fitzroy that sells French fashion during the day...