Back when Jim Resh and his wife, Barb, started J&B Bridals and Tuxedos in Chambersburg, Pa., in 1978, the entrepreneurial couple had big dreams and a small line of credit carrying a 21-percent interest rate.
“That’s almost unfathomable today and probably scarier than anything else we have ever faced,” Resh says.
Against that economic backdrop, the Reshes had little room for financial error. If their upstart business was to survive, the husband-and-wife team had to track every dollar entering and exiting the business. If not, their dream could unravel into a nightmare.
Looking back, Resh admits those early years delivered their share of stress, exhaustion and angst. Those same years, however, also produced a financial vigilance that spurred the operation’s success into a new century and, now, a 38th year.
“Starting in that environment forced us to be good operators and managers, so it’s ultimately proven to be a positive experience for us and the business,” Resh says.
For new and veteran bridal shops alike, nurturing a sustainable business very much relies on sound financial management. Here are 17 strategies for driving a healthier, more robust bottom line.
1. Review expenses constantly
Resh attributes much of his shop’s financial health to his team’s habitual review of expenses. Constantly tracking where money is spent helps minimize financial stress and ensures you aren’t needlessly spending capital.
“It’s so important to run your business each and every day,” Resh says. “If you take care of it, it will take care of you.”
Like the Reshes at J&B, a consistent focus on expenses has fueled the performance of Weddings by Debbie, a Katy, Texas-based shop celebrating its 25th year in 2016.
Every three months, for example, leadership reviews its phone, Internet and other utility expenses and actively shops around for better deals. Simply by quoting a competitor’s better terms, Weddings by Debbie has scored better deals on virtually everything but energy.
“And that’s only because I’ve yet to find anyone who can touch that rate,” vice president AJ Ruley says.
2. Exterminate unnecessary costs
Fondren Watts and Nicole Mei, owners of Blush Bridal Sarasota, a one-year-old shop just south of Tampa, Fla., confess they’ve learned a few lessons the hard way in their opening year of business.
Thanks to some diligent attentiveness, however, Watts and Mei are catching the problems early to strengthen their shop’s balance sheet.
In opening their shop last May, for instance, Watts and Mei invested in high-end point-of-sale software. Promising as the software was and beneficial as it has proven to be in some regards, the business partners found themselves paying monthly fees for features they did not and would not use. When their year lease comes up, Watts and Mei will ditch that software and investigate a deep array of competitive POS products currently in the marketplace.
“We’ll find the one that’s best for our business model and keep more money in the bank,” Watts says.
Whether a new shop or one that’s been around for decades, eliminating wasteful spending is critical to developing a sustainable business.
“The best way to help a business stay in the black is to curtail any frivolous spending,” Ruley says. “If you see you’re paying for something you don’t really need, get rid of it.”
3. Pick the right events
For many years, Ruley set up a vendor booth at large regional bridal shows, investing $3,000-$4,000 every six months for the chance to connect withprospective customers.
Ruley has since ditched the large shows in favor of smaller events, namely open houses at local wedding venues. Many of these events carry nominal fees, if any charge at all. Ruley says she captures a lot of the same traffic she would at one of the larger bridal shows, while the smaller events also allow her a chance to build relationships with other affiliated businesses and explore potential cross-marketing opportunities.
4. Capitalize on internal talents
Before calling any outside vendor to solve a problem or provide a service, Ruley first asks herself: Do I have anybody here who can handle this project? More often than not, the answer is yes.
So rather than farming out tasks, Ruley leverages internal talents as much as possible, finding people in-house with the skills and know-how to contribute. To wit, Ruley’s father does the bookkeeping; artistic staff members design print materials ranging from fliers to door signs; and a trio of bridal consultants handle the store’s three social-media accounts.
“The last time we hired someone to come into our building was to fix the wiring for the speakers,” Ruley says. “It’s just a blessing for us to have so many energetic people capable of handling different tasks and saving our business money.”
5 Hire experience-hungry interns
Young students are often hungry for real-world experience and can bring great value and energy to an operation as well as cost savings. In a bridal shop, interns can tackle any number of tasks – social media, website, PR, graphic design, store merchandising and more – that might typically fall on the shoulders of well-compensated full-time employees.
6. DIY
Those who can’t, learn.
That’s Ruley’s philosophy at Weddings by Debbie, where Ruley taught herself how to maintain the store’s website. Instead of spending upwards of $10,000 to hire a techie for site upkeep, updating and modernization, Ruley capitalized on the plug-and-play options available, tinkered around and found herself more than capable of handling the job.
“I made a concentrated effort to learn and it’s paid off,” Ruley says.
7. Leverage professional help
Smart as it is to handle tasks in-house in the interest of saving money, it sometimes pays to utilize the pros.
Resh, for example, works closely with a consultant and accountant. Together, the professionals help Resh watch the store’s P&L, accounts payable, open to buy and capital allocation. And before any major expenditure, Resh meets with his CPA to assess the impact a significant purchase might have on the company’s overall financial picture.
While these outside professionals don’t come cheap, Resh says his longtime business allies have been invaluable in helping him identify spots where the store can be more efficient with its money. It’s a case of spending money to make money.
8. Negotiate shipping costs
Shipping costs frustrate many bridal retailers, something more than a few have looked to solve by negotiating the fees with vendors to secure better terms, often looking to split the expense, or comparing rates from various carriers. Every dollar saved falls directly to the bottom line.
9. Savvy purchasing
From office supplies like paper or ink to breakroom items like coffee or juice, you can score significant savings of both time and money by shopping online or buying in bulk from warehouses like Costco or Sam’s Club. Start by making a list of routinely purchased items and then explore if buying in bulk or through an online channel makes more financial sense.
10. Save with cross-promotion
For years, Ruley ventured to a local office supply store to grab oversized prints of models draped in designer dresses. The imagery was eye-catching, but producing the portraits proved costly as the elaborate prints could run up to $500 each.
Today, rather than leaning on designer-supplied photography and paying for the wall-ready art herself, she’s teamed with local wedding photographers to provide the imagery. Photographers bring in framed images of real brides and place their business card near the portrait.
“The photographers get to showcase their work and I get beautiful imagery on my walls without having to spend hundreds of dollars,” Ruley says, adding that having photos of real brides also delivers a shot of authenticity absent in most designer-supplied imagery.
11. Team up on advertising
Bridal shops can partner with a range of affiliated businesses – venues, jewelers and florists to name a few – to reduce their capital outlay for print advertisements, special events or other marketing initiatives. Shops, for example, can join forces with neighboring business to promote an annual event such as November’s Small Business Saturday.
12. Cut your losses
In 2003, Resh decided – against the advice of his CPA and consultant – to expand and open a satellite tuxedo store about a 20-minute drive from J&B’s flagship store in Chambersburg. Immediately, it was clear the tuxedo store wasn’t delivering new customers, as was Resh’s hope, but rather siphoning off customer’s from the original J&B shop.
“We were just trading dollars,” Resh says.
After two months, Resh closed the shop. He negotiated an escape from his lease that, while costly, didn’t compare to the potential losses he would have incurred had he kept plugging along and trying to prove a shaky hypothesis.
“On paper, it looked scary,” Resh says of closing the shop, “but it proved to be a smart financial move and actually improved our business overall. It made us devote all of our efforts to our original store and our performance went through the roof.”
13. Go green
Summer temperatures along Florida’s Gulf Coast often top 90 degrees, which makes air conditioning at Blush Bridal Sarasota a must. But when cooler weather arrives, Watts turns off the AC and opens the front door for fresh air. The move lowers the shop’s energy bill, but also creates a more welcoming atmosphere.
“Bridal boutiques can often seem intimidating or ‘for brides only,’” Watts says, “but opening the doors on our busy street has invited people into our store.”
14. Live a paperless life
As the world has become increasingly digital, consider ditching paper in favor of electronic solutions. For instance, can that dress contract be signed on a tablet and then e-mailed to the bride? Can a receipt be e-mailed to the client rather than printed? If so, cutting costs for paper, copies and register tape results in more savings.
15. Renegotiate your lease
Rent is among the biggest expenses on a bridal retailer’s books, but some savvy negotiation and a watchful eye can decrease occupancy costs, which you should aim to keep at or below 10 percent of gross sales.
You can increase your negotiating leverage by gaining knowledge of the local commercial real estate market, particularly the going rate per square foot, vacancies and the perks other landlords provide their clients. Armed with such information, you’ll be better positioned to secure more beneficial terms.
It’s also wise to review and compare your lease’s triple-net charges (CAM fees, taxes and insurance) to similar local properties. These charges can quickly increase your shop’s overhead costs and hamper the bottom line.
16 Review employee rewards
Eager to reward her 30 employees for a job well done, Ruley has looked for ways to share that pat on the back beyond simply dishing out cash from the store’s coffers.
First, Ruley isn’t shy about hitting up her sales representatives for perks or cash bonuses that she can then distribute to staff members who sell a particular designer’s dresses. After all, the sales reps “make money off us all the time,” Ruley reminds.
Second, Weddings by Debbie has scraped the annual holiday bonus in favor of “Debbie Dollars.” Each month, staff earn “Debbie Dollars” during in-house teambuilding exercises and for other standout performances. At the store’s annual holiday party, then, staff members use their “Debbie Dollars” to bid on about 60 items ranging from iPads and big-screen televisions to housewares. While store leadership purchases those goods, the “Debbie Dollars” bonus structure proves to be more economical compared to cash rewards and more exciting for staff as well.
17. Barter
During the recession, barter made a powerful comeback as small business owners of all types – restaurants, tradesmen and retailers among them – looked for ways to retain on-hand cash.
Whereas barter has historically been accomplished one-on-one, say, trading a wedding dress for HVAC repair or website design, barter exchanges – of which there are many across the country – allow business owners to build an account of trade dollars that can then be used on other exchange member’s goods and services. Money stays with the business owner, who earns an added financial boost by trading items at the full retail price, not the wholesale cost.
The Case For Splurging On Employees
Among the 30 staff members at Wedding by Debbie, the average employee tenure is 10 years, a beneficial reality for the Katy, Texas-based store that has not happened by accident, company vice president AJ Ruley assures.
The 25-year-old shop has consistently prioritized investing in its employees, well aware that staff continuity is vital to building a successful, sustainable retail enterprise.
“The people who work here help keep our doors open and they are our face to the public,” Ruley says. “We want to invest in them and to create an environment where they feel valued and cared for.”
So as much as Weddings by Debbie looks to optimize profitability, store leadership has made investing in its people a pillar of the business, even if that means making some decisions that might run counter to the bottom line’s best interests.
Take the store’s employee healthcare coverage. Weddings by Debbie pays 70 percent of the bill for each employee. While Ruley confesses that the shop has explored more economical plans, particularly given healthcare’s ever-accelerating costs, the store leadership has consistently nixed any such opportunities.
“We probably spend more money than we need to, but it’s critical our employees have health, dental and vision, and we’re not afraid to spend more to take good care of our team,” Ruley says.