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Article of the Month |
2014 has us fielding a number of inquiries about our helping business owners to understand the basic of financial management.
Perhaps that says our timing was good with the introduction of the small business applied accounting class through Seattle Central Colleges that has a new semester starting next month.
The March article will give you some ideas of a great starting point to make sure you understand how all that information you receive from your computer and your accountant can help you make more money in your business.
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Book of the Month |
AGENDA
by Michael Hammer
I will preface this review by letting you know this book was written in 2001. Looking at it today, it is still very relevant.
My interest in reviewing the book today was because of two notes I had made when I first read it. Let me share them with you so you can decide if that motivates you to read the book.
When memories exceed the dreams, the end is near.
Make yourself easy to do business with.
Obsess about your processes.
Add value for your customer (see this month's Business Advisory)
Bring the power of discipline and structure to sales. Success is the result of design and management; not luck.
Use measurement for improving.
Loosen up your organizational structure.
Lose your identity in an extended enterprise.
Yes, the book cover does say, 'Reengineering the corporation', however I see the suggestions as very appropriate for a small business.
Click on Book Referral to see the complete list of small business books we have found that can be helpful to your business.
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Profits Plus
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You can't wrap a poor experience in a pretty bow
Recently I watched a transaction between a consumer and a business. Apparently the business thought the transaction was all about the ending; the business definitely forgot about the beginning and middle part of the transaction.
Intentionally I am leaving the story this 'vague' so that you can more easily see it as a possibility whether you sell a product or a service.
The hotel you checked out of could make a point to print your receipt, fold it, and put it in a beautiful envelope before handing it to you.
A similar experience could happen when someone cleans your chimney, maintains or landscapes your lawn, or services your car or truck. Maybe the receipt is put in something before it is handed to you.
With the business selling a product, there is a lot of time taken to wrap the product in tissue paper. The tissue paper is sealed with a label that has the name of the business on it. The wrapped product is put in an attractive, and expensive bag. Perhaps some ribbon is added to the handle. Your register receipt is put into an attractive folder before being handed to you.
All of these work toward your last exchange with the business being one that is memorable.
However, in the situation I observed, everything before that was poor. It was a situation of someone walking into a store.
As soon as the sales person gave the required 'hello', they continued their conversation with another sales person. Apparently this salesperson was the manager as they never focused on the customer at hand; they kept watching the other three salespeople and the customers they were waiting on.
There were no sales skills demonstrated. The customer took care of making the decision as the salesperson was offering no help. When the customer presented a credit card, the salesperson took a long time completing the transaction. Perhaps that was in part due to their inability to focus on the customer at hand.
The salesperson said, 'this is a sample item so we will get you another'. They did not explain to the customer that someone would be bringing the item from the back. And with that the salesperson walked off.
People remember their experience with a business. People send other people to a business because of their experience. Definitely not because of some pretty bow or wrapping of a package or receipt.
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Thursday, March 20 will be the next e-ret@iler conversation. Our guest will be Ann Baldwin of Baldwin Media.
I have seen this lady in action; she knows her stuff. It was great to watch her as she coached business owners on how to be interviewed; what to say and what not to say. When there are cameras present she shows you where and how to look.
She will tell us about how to deal with the media from the perspective of getting your business in front of the media in a positive situation as well as how to deal with the media when there is a negative situation.
If there is a chance your business could ever experience a crisis situation, you will want to know what she will share on Thursday, March 20.
If you want the media to see you as an expert in your field so that you are quoted more frequently, you will want to be there as well.
Most all of the e-ret@iler conversations from the past five years are recorded and archived on the Profits Plus website. Help yourself to the free downloads.
| Internet Tip of The Month |
The price rounding calculator
More than 20 years ago I read a book that shared a strategy of how to round the prices on the products you sell. We began to implement what the book taught, but we also added a lot of components that would allow our small business to get away from having an image of being 'that local store that is high priced'.
This topic has become a class that I have taught many times. One of the toughest component of the class has been the 'price rounding' where I show you how to get extra cents, and in the case of more expensive products and services, extra dollars from each transaction.
To solve that challenge, a calculator was created. It asks you to give the current cost and selling price of the item. The calculator will then show you what the new suggested price would be. It will also show you the difference in profit dollars and the difference in the gross margin.
The best testimonial I have received came just over a year ago from an owner who said that using the strategy added $100,000 to their bottom line. With that comment, I think this is worth a couple of minutes of your time.
Price rounding calculator
| The Power Promoting Idea of the Month |
Getting rid of merchandise; Dutch style
Recently I visited a business that while very attractive had merchandise that was from four holidays ago (Thanksgiving items). Another business in a class in January had a buyer who was struggling to persuade an owner to let them get rid of some old merchandise.
When I asked how old the merchandise was, I am sure my jaw dropped when the buyer said, '10 years old'. (Ouch!)
Allow me to share a method of getting rid of this 'stuff'. The event we are creating is known as a 'Dutch auction'.
You take all of this merchandise off of the shelf and take it to the back room where you clean it, remove old price stickers, and put on a new sticker with a price that is reflective of what a new item would sell for today.
Then you have a table at the front of the business with a sign announcing, and explaining your Dutch auction. If you were holding this event in March the sign would read something like this:
Everything on this table is 20% off regular price. If it is here next Monday, March 10, it will then be 30% off regular price. Items remaining on the 17th will be 40% off and what little is left on the 24th will be 50% off.
You may want to adjust the percentages. I have seen businesses with discounts starting at 10% and progressing to 40% and I have seen others starting at 20% and progressing to 80%.
Do not expect that you are going to make money on this event. Instead expect that you are going to get some money, which has been sitting dead on your shelves, back to work for you.
What if you could clear $1000 at your clearance price. If you took that $1000 and bought merchandise that had a 3 time turn you would have some sizable profit in your register instead of some old merchandise making your business look dated.
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