Retail Business “Killers”

Today I want to point you to an article called “The Top Five ‘Killers’ of Retail Businesses” from the Retail Owners’ Institute.  You have to keep in mind that the ROI is a group focused on the financial aspects of retailing.  Consequently their “Top 5″ don’t include things like marketing, salesmanship, customer service or any number of other things that would appear on my list.  In fact, the article begins with this rather remarkable statement”  Hint: (Declining Sales’ is NOT One of them!)

Again, these guys are in the business of counting retail beans so their list focuses on the financial.  With that disclaimer, here are their “Top 5”:

5.  Out of Control Growth

4.  Out-of-Control Expenses

3.  Failing to Manage Gross Margins

2.  Out-of-Control Inventory

1.  Being Out of Cash

Like I said, from the bean-counter’s perspective there isn’t much to argue with here.  There’s no doubt that if you run out of cash, you’re most likely out of business.  Read the original article to see ROI’s comments on each business killer for some good insights.

It’s a good article but, in my humble opinion, it misses some very important elements of a successful retail business.  Even the most devout bean-counter should be willing to admit that until you bring the beans in through the front door, the rest is just academic.

A Really Useful Site

Biztoolkit_2
Every so often we find something really useful to pass along to you and today’s one of those days.  The site is called "Biz Tool Kit", a service of the James J. Hill Reference Library.  According to their web site, "BizToolkit puts the best online information resources at your fingertips including downloadable business plans, HR forms, financial calculators, industry research reports, plus expert Live Help."

There is a "Pro" version of the site ($7.95 per month) but the free site has more than enough information to keep you busy for a long time.

The downloadable forms section and the Sales and Business Development Resources section alone make this site a real goldmine for any small business.

Sales Tools by JustSell.com is especially interesting.  The sales download "201 Motivators" is a listing of thoughts and actions, people, books, movies, movie monologues, and audio with motivational themes.  For example, Al Pacino’s pre-game talk to his football team from the movie "Any Given Sunday" is a classic.  Check it out on YouTube.  [Warning:  Explicit language including one use of the "F" word]

There’s really just too much on this site to even scratch the surface here.  This is one site you really should bookmark and come back to again and again.  We’ve added it to "Useful Links".  Check it out and let us know what you think.

Are You a “New Millenium Merchant”?

Negen_book
In previous posts, we’ve mentioned Bob Negen.  Bob and his wife Susan are what you might call retailing "gurus".  They have extensive experience in retailing, both at the chain level and at the "your-own-money-on-the-line", entrepreneurial, retail level.  Many of you have seen and heard Bob’s presentations at Baby Lock Tech and other industry events.

Bob and Susan have recently published a book called Marketing Your Retail Store in the Internet Age.

To quote from their web site, "This is not a rah-rah
motivational book filled with corny cliches, worn out platitudes, or
abstract theory coming from pedantic professors who have never spent a
day on the floor of a retail store. This book was developed by
retailers, for retailers."

I wouldn’t normally recommend a book before I’ve read it, but I’ve read enough of it to know that at less than $20.00, it’s a great investment.   I’m telling you about it now for two reasons.  One, it would make a great gift for anyone who’s in the retail business and you still have time to get it before Christmas.  Two, Bob and Susan are offering a bonus to anyone who orders the book before December 10, including a full year of WhizBang tips and several downloadable audio files.  For more information check out their web site.  Or, you can read two sample chapters here. 

Watch MYOB for a review of the book sometime next week.
 

Point of Sale Systems

Chances are that when you voted yesterday, you might have
had your first experience with electronic voting. Touch-screen voting devices are replacing the
old punch card system in many areas. The
system wasn’t without its problems, but since many of the machines were being
used for the first time, it doesn’t look like the problems were all that
bad. There’s no question that the days
of the paper ballot are numbered.

In retail, the hand-written receipt is also nearing
extinction.
One of the things that Receiptlet
the big boxes get big is the electronic point-of-sale system. I imagine that Sam Walton probably used a
receipt pad and a cigar box and kept the inventory in his head in his original
five and ten cent store in Bentonville, but those days are long gone.

 The good news is that the type of systems that used to cost
hundreds of thousands of dollars are available today to even the smallest
business. Systems are available from big
names like Microsoft and Intuit, and from smaller companies, many who
specialize in software for particular industries.

If you haven’t taken the plunge yet, here are some
suggestions from cnet.com.

Think beyond the cash
register.
While an off-the-shelf
package may save you money up front, you really want a system that will help
you run every aspect of your business including sales, inventory, payroll, and
customer relationship management.

 Remote access may
help.
You don’t want everything tied
to a single terminal.

 Make sure your system
is flexible and expandable
. Using
your laptop as an additional check-out terminal can keep you from losing sales
during busy periods.

 Decide on wireless
handheld or a touch screen.
There
are a variety of data entry options. Your choice may vary depending on how you do business.

 Pay attention to
support.
When you have your entire
business computerized, the computer had better work!

 Look for detailed
reporting.
What are your needs? Can a package system do what you need? Ask a lot of questions and don’t buy anything
until you’re satisfied with the answers.

 The first point is probably the most important. If you’re going to spend the money and take
the time to set up an electronic system, (and you will spend a lot of time
getting it set up) you’re going to want it to do everything for you that it
can. A system that records sales but
doesn’t adjust your inventory isn’t going to save you much time. An ideal system will scan the item, enter the
sale, record the customer information, and print a receipt.

Then it should update your inventory records, record serial
number information for warranty, and let you know when it’s time to reorder the
item. It should talk to your accounting
software, making necessary changes automatically. If you pay commission, those records should
also be updated by your system. Full
payroll functionality is an added plus.

 Finally, your system should give you the information you need
in reports that make sense for your business. For example, Microsoft has two point-of-sale packages, one cleverly
called Microsoft Point of Sale and the other called Microsoft Retail Management
System
. Where Point of Sale offers a set
of standard reports, Retail Management System allows you to design customized
reports. MRMS has other features that you may find important.

 In addition to the two Microsoft packages, Intuit’s
QuickBooks
is also very popular. An
advantage of either the Microsoft or QuickBooks packages is that they can be
purchased from a local retailer who can provide the necessary set-up assistance
and support. If you also need the
hardware to build your system, Intuit has partnered with Dell for a complete
package. Microsoft has a similar
partnership with H-P. Local vendors usually
offer packages of hardware and software which can be set up to suit your needs.

 So, what’s it going to cost? MS Point of Sale and QuickBooks alone have a street price in the $500.00
area for just the software. MS Retail
Management System costs about $300.00-$400.00 more. The Microsoft/H-P software/hardware package
starts at around $2,200. A
Dell/QuickBooks bundle is slightly higher. A vendor here in St. Louis offers a complete hardware/software package with  Microsoft RMS,
on-line training, completely loaded with Tacony and Baby Lock catalogs for
about $5,000. Obviously, your price will
vary depending on your needs.Cigar_box_2

One thing is certain, while some retailers may wish they’d
gone with a better package, you seldom hear anyone say that they’re sorry they
gave up the pad and the cigar box.