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  e-ret@iler newsletter
May 2008
Volume 9 Issue 6

 

Profits_Plus Solutions
Tom Shay Photo
Article of the Month

Solution by Committee
by
Tom Shay

Think you have all the best ideas in your business? My great-grandfather started the family business because he had an idea that his employer would not consider. And there are some chain stores, (think of Home Depot and Barnes & Noble)that have been started because employees had some great ideas.

This month's article suggests that you look within your business for ideas when you are making decisions. Click on Article of the Month to read this article.

Book of the Month

Blue Ocean Strategy
by
Kim and Mauborgne

The book of the month was selected months ago. Yet, as we write the May e-retailer there was a call to our office from a Main Street program. Their concern was a situation that we would think came right out of this book.

A business in their small community has found a product line they have been successful with. A second business, seeing this success, decides to carry the same line and offer it at a lower price. This is referred to as red ocean strategy - trying to steal business from another business.

Blue ocean strategy occurs when a business does things to develop an uncontested area of business. In these challenging times, red ocean strategy usually means going for the 'item and discount price' advertising. It is not real profitable. Read this book to see how to develop a unique business.

We have more books to suggest for your reading. Click on Book Referral to visit this page on our site.

e-ret@iler Conversations
Conversations


Visit our e-ret@iler conversations, find the category of interest and post your comments, questions or best practices. You may also go directly to one of our categories by clicking on one of the links below.
  1. Advertising
  2. Employee Issues
  3. Financial Management
  4. General Discussion
  5. Merchandising
  6. Sales Techniques
  7. Vendor Issues

 

Contact Us


Profits Plus
P.O. Box 1577
St. Petersburg, FL
33731 USA
(727) 464-2182 Voice
(727) 898-3179 Fax

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Business Advisory

May 10 is National Small Business Day

Hey! That's us. And we found this event through Chase's Calendar of Events. Ask your local media to tell their viewers, listeners, and readers how spending money with a local small business means that more of the money will stay in the community (as compared to spending the money in a chain store).

Our second business advisory for May 2008 deals with the issue of staff and the NFL draft held last weekend. The draft is held as their is new talent available for teams. Under performing players can be cut.

One of the advantages of a challenging market is that there are likely to be more candidates available for hiring. We think you should always be looking to improve the quality of the staff in your business.

One of the points to consider is what kind of person you are hiring. There are two kinds; carrot people and stick people. Stick people are those that have to be told everything to do. They only respond to threats - 'do this or I am going to have to hire someone else to do your job.'

Carrot people are those that we want to hire. They respond to incentives (understand these are not bonuses). And as they respond to incentives, you should be sure to place plenty of incentives in front of them.

It is your choice - stick people or carrot people.

Internet Tip of The Month
Promotion Evaluator

We are thankful to the retailer from Georgia that so kindly shared his methodology with us. Here's the idea:

A business spends hundreds, or thousands of dollars, advertising in the media. We all know that the response to that advertising will be fairly low. Why? Because the sale prices in the advertising are just not exciting; they don't vary much from the sale prices of the competition.

When the advertised event is over, you find that you spent a lot of money in advertising and had few dollars in markdowns. Our Georgia friend says this is not right; advertising dollars spent or markdown dollars given are the same.

So, here is a promotion evaluation to help you reverse that trend. You make the determination of how many dollars you want in markdowns compared to the dollars spent on advertising.

This concept makes sense. People will talk about you when you give a great deal on the merchandise or services you sell. I can't see them talking about how much money you spend on advertising.

Promotion Evaluator

The Power Promoting Idea of the Month
It's time for ice cream!

Speaking on the topic of Power Promoting, a couple of weeks ago at a weekend trade show in the automotive trade, this idea was the most popular. Here's how it worked from the small business that shared it with us.

The youth group where this business owner worshiped was raising funds for a mission. The business owner offered to help. On a Saturday afternoon, the youth group gathered at the business. There had been plenty of announcements in their church bulletin and newsletters (notice this means no traditional advertising) so a sizable crowd had gathered.

What the crowd was treated to was homemade ice cream. The business owner had a hand crank White Mountain ice cream maker and all the necessary ingredients. The youth provided all the necessary labor and the business owner provided the ingredients. And there is a tip jar that collects a sizable amount of money for the group.

It gets better!

Someone from another house of worship asked the business owner to duplicate the event for their youth group. And then there was another, and another, and another group that asked to have a Saturday afternoon ice cream event.

Now, every Saturday from March through October there is some organization in front of their business offering free homemade ice cream to a couple of hundred people that the group has invited to the business.

I doubt there are many advertised events that can draw that many people to a business week after week.

This idea is #24 from the red More Profits Plus Power Promoting Ideas book. You can order your copy by clicking on the link below; only $9.95 plus postage.

Profits Plus Resource Center

 

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Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179