March 29 is Mom and Pop Business Owner's Day
Deferred Revenue in Gift Cards.
This month I have two items that I want to call to your attention. The first is that March 29 is Mom and Pop Business Owner's Day. this is one of our days to promote who we are and what we do. We should let people know that when they spend money with us, more of the money stays in our community as compared to the money that a customer spends in one of our mass merchant competitors.
The second item for February deals with a financial aspect of our business that many of us do not understand. When you sell a gift card or a gift certificate, you do not ring it up as a sale. Why not?
It is not a sale, because the customer has not taken any product or used any service. Instead they have given you money for which you will eventually provide that product or service, thus it does not show up on your profit and loss statement. As you are holding onto the money, it does show up on your balance sheet. It shows up as an asset as a part of your cash. The matching and offsetting entry is a liability that is often titled, "deferred revenue".
|Internet Tip of The Month
New Calculator: Promotional Discount Pricing
Here is another of the new calculators we have added to the Profits Plus website for your free usage.
The concept for this calculator came from two places. The first was the number of times we saw businesses that ran expensive ads yet had minimal markdowns on their merchandise. This concept seems backwards to me. The second was a merchant from Georgia who had the same thought process and had managed to created a chart where they could track the results. This merchant was making sure that the amount of markdowns on merchandise was more than the cost of the advertising. Take a look at what is new on our website.
Go to this link to visit this page: Promotion Evaluator
The Power Promoting Idea of the Month
"How to" clinics
We all want our customers to become more engaged with what we sell. The concept is called, "transforming" the customer so that they are more to purchase more of what we sell. One of the best ways you can help transform your customer is to help educate them with regard to what you sell.
If you sell clothing, you can have a "how to" clinic to show people how to color coordinate their clothing. If you sell hardware, you can teach your customers how to use the hand and power tools you sell. We all want our customers to become more engaged with what we sell, and by helping them to see how to better use what we sell.
When you go to the link below, you will visit our resource center. This promoting idea comes from the blue Ideas book - a great resource for ways to get your customers to visit your store more frequently.
Profits Plus Resource Center