July 2025
Volume No. 26, Issue No. 8

How much does the average person in your community spend with your business?

Recently, I was asked to participate in a live online program. The question asked was, "How much does the average person spend with your business?"

In retail, this would translate to knowing what is the size of the average ticket. Hence, the topic was the adage that states 80% of your business comes from 20% of your customers. Within the program, the emphasis was on why and how you should focus your attention on this 20% group.

I want to take that conversation in a different direction, as I do not agree with the focus on the 20%. Allow me to ask the question a bit differently. How much does the average person in your community spend with your business?

The answer is ZERO! Most people in the community do not do business with you. While I understand the importance of the 20%, I think the other 80% is also very important to your business.

Let me close with the adage of "Spend to retain instead of spending to attain". Yes, every person who has done business with you is very important to your business. It will be much easier for you to keep both the 80% and the 20% engaged than it will be to find new customers.

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Today marks the start of Independent Retailer Month. Its multi-purpose is to first get the media to promote shopping at independent retailers in a positive manner; none of that negative stuff about "shop local or you will lose the local businesses".

Independent Retailer Month was created to give local retailers an event in which to promote their businesses. And, the third purpose is to help independent retailers tell their story using the information on the Independent Retailer Month website, which shows the many benefits of shopping locally does for the community. The majority of the benefits deal with how shopping locally causes dollars to stay within a community for a longer period of time.

Article of the Month - Birds do it

When you read this month's article, you can easily tell it was not written in the last couple of years, as the Cardinals have not been in first place for a while. In addition to the Cardinals, this article has references to McDonalds, employees, and consistency. The article talks about leadership in a manager or owner. And the article talks about using the best skills in all employees.

Article of the Month

Book of the month - Losing my virginity

Before you get off track, let me explain that this book is written by Richard Branson, the founder of the company Virgin, which includes an airline among other things. The subtitle of the book is, "Losing my virginity: How I survived, Had fun, and Made a fortune doing business my way".

As we have recently seen other wealthy people in the news for various reasons, Sir Richard is not. However, he has a fascinating story of how he built his business empire.

You may agree that reading a book like this is better for all of us as compared to reading, viewing, and hearing traditional media.

Book of the Month

Internet Tool for Your Business - Individual Item Margin

Margin and markup. These are essential words to any small business. You see margin (usually shown as "gross margin") on the profit and loss statement as the line right after your sales or revenue, and the line titled "cost of goods sold".

We also see them used when looking at a single item or service. And that is where the confusion begins. We often hear people use the words "margin" and "markup" as if they were interchangeable. They are not. While we have a calculator on the Profits Plus website that explains the difference, our Internet Tool for July is the margin.

Margin is the calculation that is most frequently utilized. This is because your profit and loss statement also utilizes the term "margin". We also find that markup is used in situations when someone wants to exaggerate an example, as the markup number will always be larger than the margin number on the same item.

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.

Internet Tool for Your Business

Staff Incentive for Your Business - Create your own holiday

Look at a book titled "Chase Calendar of Events" or the website "National Day Calendar". Both are filled with holidays for every day, week, and month of the year. While our business may have been the extreme in that we closed for only four holidays a year, most businesses do close for various days.

How about a holiday for each of your employees? Perhaps you could have a holiday for each individual employee in each quarter of the year. Ask the employee to select the date(s) they want. Be sure to ask if there is some significance to the date, as you may want to do something special to help them celebrate.

Posting these dates on a calendar for all your staff to see gives a feeling, uniqueness and appreciation with each of your employees.

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.