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September 2013
Volume 14 Issue 10

Article of the Month
The letter
Tom Shay

September's article came by way of my having been a member of a board of a trade association.

A letter was received by a disgruntled member. Business was tough for this member and they felt that it was the responsibility of the association to do something about it.

I decided to respond to the letter writer to ask what they were doing for their business as well as  what they saw as opportunities going forward.

Let me invite you to read this exchange of ideas on what a business can do. could apply to your business.

Click on Article of the Month to read this article.
Book of the Month

301 Great management ideas
by Bradford Ketchum, Jr.

The book suggestion for September is written in the same style as the Profits Plus ideas book; you can read the pages in any sequence and pick up ideas.

Let me insert that you will have to be adaptive as you read the ideas because the book is not specific to small business. There may even be a couple of ideas you just have to discard.

However, with 301 ideas in the book, you are sure to find plenty that you and your staff can use.

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
P.O. Box 1577
St. Petersburg, FL
33731 USA
(727) 464-2182 Voice
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Business Advisory

Any 'blow back' from the strikes?

This week as I was standing on a street corner in St. Louis, my attention was diverted by what sounded like a large crowd. Walking to the next block, that was exactly what was happening.

Not only was there a crowd occupying the street corner, there appeared to be a part of the crowd that had filled a downtown chain restaurant.

The crowd was holding banners and signs and making a lot of noise. Their efforts were to protest the wages being paid to entry level workers in businesses from Macy's to McDonalds.

There has been a poster that claims that if a certain pizza chain would increase the price of the average pizza by 14 cents, they could afford to pay all of their staff a higher wage.

Perhaps you are hearing some 'blow back' about how the minimum wage should go to $15. Of course, when you think about that amount and what you are paying your staff, the problem with this new minimum wage begins to hit home.

I write this month's column in an effort to remove any concerns you might have. Think about those individuals who went on strike this past Thursday.

If it was their day to work, they missed 20% of their work week; definitely this is a group of people that do not need to miss any pay check.

Hopefully, they did realize that while they might get interviewed by the media or on television, their efforts would produce little if any results.

I wonder if these people would invest a similar amount of time to improve their job skills.

Over the years, I have worked with several small business owners who pay their employees a rate that is considerably above the going rate within their community and each of these owner has had challenges with their staff. Yet, the owner of the business talked about how loyal their employees are. 

My response has been to ask if the owner thinks the loyalty could be due to their employees not being able to earn a similar wage somewhere else with the job skills they current have.

If you want to make a difference in the life of these employees, it is not done simply by increasing their wage. It could be done instead by teaching them job skills, or perhaps encouraging them to attend classes at a local college. You might even make an arrangement for employees that would take classes relevant to your business.

However, that simple pay raise they are striking for; it will not work in your business. Here's the math:

If wages for your business are 15% of sales and you were to make that increase in pay, what would be the new percentage? Probably something in the range of 27% of sales.

That represents an increase of 12% to your business. What is your net profit? If it is 12%, you just gave all of your net profit to create the pay raise. If your net profit is less than 12% and you gave the raises, you are now losing money.

Can you afford that? It is not as simple as adding 14 cents to the price of a pizza! And there are a lot more small businesses like you than there are chain stores.


Steve Drake was an awesome guest for the August e-ret@iler conversation. Bill Kendy and I had enough questions for Steve to more than fill the hour. 

With all that knowledge, you easily see why Steve is known as the 'causeaholic'.

That is one of the neat aspects to our monthly conversations. Bill and I find some great sources of information to share with you. Participating in the call is free and we provide you a toll free number to join us.

We hope you will join us in September as we have two visitors from the college in Seattle that is going to be offering a class this fall on small business accounting and business plans.

The date will be Thursday, September 26 at 8pm eastern with guests Jeff West and Robert Natoli joining Bill Kendy and me as we discuss an opportunity to learn ways to make your business more profitable.

E-ret@iler conversations

Internet Tip of The Month

Can you accurately plan your markdowns?

During a recent webinar, I used an example from a business on the effects of markdowns. The buyer told me how much they planned to buy and their initial gross margin.

The buyer also told me when they planned to markdown the items and how much inventory they expected to have at each of the occasions when they would take the markdown.

Using the calculator we are sharing this month, I was able to demonstrate that with their initial gross margin, and the amount of markdowns planned, the business would make all of their profit in the first 60 days. The markdowns in succeeding months cancelled what little profit was left after those 60 days.

The answer was for the business to buy only enough inventory to last for 60 days. Any inventory left after that point was simply an exercising in 'swapping dollars'. The little profit that was made in the third month was consumed by the loss in the fourth and successive months.

This calculator will help you to find where, and when you are making money.

The Power Promoting Idea of the Month

Are you 'half-Irish'?

Think back to St. Patrick's Day and the promo you had for that event. Perhaps your staff made a point to wear green and those over sized buttons that state, "I'm Irish".

Often the conversation turns to one person asking another if they are truly Irish, with an answer of, "I'm half-Irish" being given.

That's where September 17 comes in. It is half way to, or from, St. Patrick's Day. So for those who claim to be "half-Irish", this can be their day. You can bring out all those decorations from spring and create a one day event that will truly make your business unique.

You can find more ideas like this in our promotions books. You can order your copy by clicking on the link below; each book is only $9.95 plus postage.


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