Article of the Month
The October 2009 article is important as businesses look for every opportunity to grow. In this article, Adding Sales, I am discussing how a business should be looking at their profit centers and explore the possibility of adding to that category. It could be a product or service; every business should always be looking for ways to grow. And the looking should be done in a logical manner. This article shows how.
Click on Article of the Month to read this article.
Book of the Month
Rethinking the Sales Force
It was a rather odd way that I came across this book. An organization of wholesalers had contacted me about a program they had created to help their salespeople call on their small business accounts.
The program was a miserable failure. The knew they had created 5 or 6 successful salespeople, but had over 200 that had taken the classes.
The program was based on another book by Neil Rackham. It was a very in depth book that I found to be rather difficult to digest.
When I saw this second book by Rackham, I wanted to see what else he had written. This book makes more sense to small businesses. It teaches that too often we try to go for the 'home run' of making a sale instead of working to get one hit at a time. I will give you a heads up and say that I found the first 100 pages to be the most valuable.
We have more books to suggest for your reading. Click on Book Referral to visit this page on our site.
We have a lot of new information on the e-ret@iler conversations blog. We invite you to add your comments, ideas, and observations.
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.
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1. A tale of two businesses, and two wrongs do not make a right
In the past couple of months I have watched two businesses that have opened in our community. It is one of those components of small business observation that I cannot turn off.
What I saw was two businesses working to open; two businesses making mistakes and the possibility that one is going to survive.
Both are located on the same street approximately 20 blocks apart. They do not compete with each other as their products and services are very different.
As you enter one business you can tell they were very conservative on expenditures. They did not refinish the floors; there is not a drop ceiling and you can see several indicators of who the previous occupant of the building was.
This does not strongly affect the overall experience with the business. But you do see they did not spend tremendous amounts of money giving the building a new look. Trying the business one day, I heard the owner explain about the plans they have to do more to the building in the coming year. There is wisdom in not spending so much money.
The second business had started working on remodeling the building they were going to occupy some five months before they opened. My observation is that they spent a lot of money on the exterior and signage but not much on the remodeling of the inside.
The clincher was that the business closed some 90 days after it opened. It was quite a surprise to see that; there was no grand opening sale or going out of business sale. It was simply a 'here today and gone tomorrow'.
Which business implemented the right strategy? The answer is neither! While the first business held onto their money for a while, the concern is they might not make a good first impression on many of their customers.
In business, you need to be able to do it right. If you have problems and the cash runs shy, then you are stuck with trying to get alternative sources of cash that could be very costly or fatal.
The October e-retailer conference call is likely going to be Thursday, October 23 at 8:00 edt. As always I will send a notice a week before and then one last reminder just before the call. Instructions on how to participate will be in both of the announcement messages.
The topic I am preparing for the October conference call will be sales floor design. As we are entering that very important part of the selling year, we need to make sure the sales floor is doing all it can to help you sell merchandise.
Calculate your sales per square foot and average ticket for the first 9 months of 2009 and then come prepared to make a difference in your business for that all important fourth quarter of the year.
I am finding some great material floating through the Internet of late. I make a point to follow some great thinkers with my twitter account (ftomshay). Let me suggest that you get a twitter account and begin to follow the information I find to share with you. I don't post idle chit-chat, and don't post just for the sake of posting. So, what you will see from me will be of use to you.
And, a very blessed Thanksgiving to all our friends in Canada as you celebrate the occasion this month.
Internet Tip of The Month
Operating expenses as a percentage
Earlier this year, I took on a new coaching client. Like many businesses, there was a list of challenges with one of them being financial issues. It wasn't a shortage of money that was the challenge; it was the fact that in hearing me speak at an event this business owner realized they did not know how to read or manage by their financial statements.
Looking at their profit and loss statement, I could see why. It was a mess; you couldn't understand what the information. Taking the information and rearranging it, we quickly got to a point where the business owner understood the data. The aggravating point to me was that the accountant was OK with the original format and never asked the business owner if they understand their profit and loss statement or could make a decision from it.
Here is the short of it:
Your sales or revenue are the top line and are represented by 100%. The cost of goods sold, or cost of doing business is stated in a dollar amount as well as a percentage. When shown as a percentage, it indicates what percentage of the sales are spent for that item.
Then comes the operating expenses as a percentage. Each of the operating expenses (rent, payroll, taxes, insurance, etc.) are also show in a dollar amount and as a percentage. If the percentage were 5%, this indicates that of every dollar of revenue, that expense takes 5 cents.
After all of the expenses are listed, they are totaled and you have a dollar amount of the total operating expenses and a percentage. If the operating expense percentage is 30, this means that 30% of all of your revenue goes toward paying the operating expenses.
Questions? Send them to me. And here is a link to see how to perform this calculation using the free calculator on the Profits Plus website.
Operating expenses as a percentage
The Power Promoting Idea of the Month
Having a color sale
As I pointed out in a twitter post in September, when you are having a sale you need to have a good reason (as compared to simply marking down merchandise just to get rid of it). How about a color sale? October gives you a great opportunity to do so as will any part of November.
Pick a fall color and have a sale theme of 'anything we sell that has that color on it get a discount of __%. Between now and the end of November, you could change the color each week as the leaves in your area change colors.
If you are going to promote, go for it big time. Do the things that you can do that the other small businesses in your area won't do, and the mass merchants can't do. Flaunt your uniqueness and use it to your advantage.
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.
Profits Plus Resource Center