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The difference in contentment and achievement We have experienced two businesses that are the basis for this month's news. The first is a well-known manufacturer selling their products exclusively through independent local businesses. The second was a major wholesaler for over 5,000 independent local businesses. With the second business, you may note the word "was" as the company is no longer in business. The commonality between the two was a feeling of contentment that we sensed with each. The first told us the only way they monitored their business and industry was by market share. They were OK if the industry grew or shrank; they just wanted to watch the competition and if this company did not lose market share they would be happy. The buyers for the second company had an odd response to questions. They would deflect a question by telling you how much they sold in any given product category. When someone would push further with the question, they would tell you about the current year's sales and compare it to the previous year. The comparison could be for the business as a whole or just a specific product. Here is what we believe is missing with each; why not look at the possibility of what your business could achieve instead of being content in looking at what has happened? Past these big companies, what about your business? It is your business so there is not a right or wrong answer. Instead, we leave this as a question for you to consider in the new year. Is there a feeling of contentment or a drive for achievement? Article of the Month - Should margin be the main consideration We speak to many small business owners who have one focus when deciding the price for their service or product. That one focus is calculating the margin in a transaction; comparing the cost to the price the customer pays. This is an important consideration. However, in this month's article, we are going to ask you to consider two more ways of looking at making money. They are turnover rate and dollar contribution. Once you read the January article you will find that all three considerations can get you to the desired results of making more money. Book of the month - Shark Tales In the past month, we have experienced several people who have mentioned the television show, "Shark Tank". So, we decided to have the book of the month be Shark Tales, written by Barbara Corcoran and Bruce Littlefield. She has a fascinating story of how she went from a waitress to selling her real estate business for $66 million, written with a, "I did it and so can you", attitude. Internet Tool for Your Business - Debt to equity ratio The first of the year is an appropriate time to call your attention to this important measurement of your business. The "debt to equity" ratio is fairly easy to calculate and understand. The necessary information comes from your balance sheet. This ratio answers the question about comparing how much debt your business has to how much equity you have in your business. Lenders watch this. They want to be sure that you have plenty of investment at stake as your business takes on debt. The idea is that an owner is not apt to abandon their business when they have a sizable equity in that business. Below is the link to get the answer regarding the ratio in your business. Each month we highlight one of the 47 free tools on the Profits Plus website; we call them "calculators". While some provide analysis by numbers and ratios, some are assessments and others are self-examination questions. Many are downloadable while others, because of the complexity of the calculations going on behind the scenes, are a part of the website and allow you to print your answers. None of them require you to give any personal information nor are there any "cookies" tracking you or your information. Staff Incentive for Your Business - Are you family friendly? How many of your staff have older parents or children they take care of? Seeing a situation with a member of our family whose corporate jobis less than accommodating, we ask about your business and being considerate about their needs. It could be taking someone to a medical appointment; a need to visit a teacher; or, to see a child in an afternoon ball game. It does require a bit of effort to handle the details, but it could go a long way in letting an employee know they are appreciated and valued.We want to recognize A Carrot A Day by Adrian Gostick and Chester Elton, whose book provides the basis for each month's incentive idea.
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FEBRUARY 2025
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With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.
Small Business
Hopefully there are few small businesses that are operating with handwritten documents. Whether you have a point of sale (POS) system; Curstomer relationship management (CRM) system; or anything digital that helps you better operate your business, there remains a question.
Are you using everything that you bought? That is the focus of the February Small Business Advisory.
Small Business
As small business ownerss we are sure to disagree on many aspects of business management and ownership. However there are two items that I will always insist on.
The first item for you as manager and owner of a business, you must inderstand financial information. You cannot leave it to an accountant. The second item is you have to invest in educating your staff regarding their responsibilities within your business.
Most every small business has inventory. It may be inventory used as a part of your services. It may be inventory for items used in your business. The article of the month shares ideas of how you should control the inventory. This is important because you do not want to run out of the necessary inventory, and you do not want too much of your money sitting in more inventory than you need.
You cannot beat your competition unless you know what they are doing. The February book of the month is, The Everything Store, written by Brad Stone and Jeff Bezos.
