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Pricing is a game; the winners profit A trip in late July to Hobby Lobby showed the fall merchandise being put on the racks. Shortly after the merchandise was arranged a sign was added to the display. It stated, "Fall Decorations 40% off". Yes, within hours of first being shown to customers, Hobby Lobby was offering a 40% discount. Hobby Lobby is not the only one. Yankee Candle is known for this. A guest on our Small Business Conversations program had previously worked at Yankee Candle corporate headquarters. He said the ongoing joke at work was to ask if there was ever a customer who had paid full price for a candle. The online business, Wayfair, has a similar reputation; everything always on sale. The same has been said about Chico's, a women's wear store. The same is true in service businesses. There are those who think the, "we'll make it up on volume" theory will always work. Somehow there are many who think all sizable businesses use this concept. That is not how it works. The strategy of pricing, products and services is not taking the cost and applying a multiplier factor. We have taught a class for many years that shows how to play the game of pricing. Over the past twenty years we have received some awesome testimonials as to the results. We remember the business in Ontario that reported this producing additional profits of $100,000 over the course of a year. Just before the pandemic we met a person who credited the class with having saved his business from bankruptcy during the great recession just over a decade ago. The information is timeless and we want to share. This link will take you to a PDF, audio recording and the PowerPoint. Most likely the audience during the recording is not the business you are in. However, the concepts remain true regardless. Here is the link to the free information: Pricing Strategies
The "why" for education With the employment pool being what it has been for a while, it is easy to ask why anyone would bother to invest the time and effort in their staff. And with that question we have the answer. Good employees want to work with other good employees. It is far to easy to move from one bad job to another. And in that bad job bad employees are surrounded by more bad employees. But working with good co-workers is a rare treat in today's world. If the concept of having a bunch of people who want to be excellent sounds like a good idea to you, we suggest you read the article of the month.
Book of the Month - some very old ideas Marcus Aurelias was the emperor of Rome almost 2,000 years ago. Meditations is the collection of his ideas and thoughts. We have seen some fascinating testimonials to these works. Testimonials ranging from helping a person focus to assisting with determining values and principles; all the way to the book being of assistance in dealing with substance abuse. There are multiple translations of the book. The version by Gregory Hays is considered to be the best.
Internet Tool for Your Business - Our logical financial statement When we create a new calculator on the profitsplus.org website, it is because someone has asked a question that should get more attention than the usual, "rule of thumb" answer. Your business is unique and the answer should be unique to your business. A frequent question deals with the challenge of reading the financial statement that your in-house system, bookkeeper or accountant prepare for you. Generally, we find the arrangement of information to be the leading reason for the lack of understanding. Hence, we developed the tool we are sharing this month. It shows how to take the information you have and rearrange it into a more logical and easy to understand format. If you have a question, call or write us. And as always, we are glad to talk with you and we would never ask you to pay anything for the conversation.
Staff Incentive for Your Business -Just ask a question It is a challenge to determine what you can do or give to get an employee to excel. Each of us are different; hence the incentive would be unique for each. Our staff incentive for September is to ask, in private, a simple question of each employee. It could be some variation of, "If you had a couple of hours to yourself, what would you do?" "If you could be in charge of a part of this business, what would it be and what would you do?" As you see, the question is simple. Experience has shown the answer given is most often simple. "I would like to be able to drive my kids to school", or "I would like to watch my kid's afternoon ball game". Perhaps the employee wants to try an idea of changing something within the business. Giving permission means there will be a lot more effort by the employee because they are trying their own idea. 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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MAY 2024
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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
The May Small Business Advisory is titled "Planning for a successful accountant" and is appropriate for many with the April 15 tax deadline having passed.
Did you work with your accountant? Or, did you just give them a bunch of papers and wait to receive a completed tax return?
Successfully working with an accountant requires a partnership. This month's Small Business Advisory gives suggestions of how to make this happen in 2024.
Small Business
We see that many small business owners have too much of a focus on the "top line" of their income statement.
Increasing revenue is great, but it is not a cure all for any challenges your business is facing. And sometimes, incresing revenue can create a challenge.
Who is your customer? Some small businesses have no focus. Their customer is whoever calls or walks in the door.
And some small businesses have determined which customers, in sufficient numbers, they should spend their efforts to attract.
The article of the month shares an old Southern rhyming couplet about business; "The bertter you niche, the more you get rich."
Lean Startup by Eric Reis is our suggested book for May.
As the title suggests, the reader of the book would be someone that is starting their business. However, we see more value than just that.
Perhaps you have been in business for many years. We think this book could give insight to items, and methods, that a small business owner should think about with their business today.
