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This Old Business

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Not long ago I was asked to come out and take a look at a business that had been around for about 10 years... but the owner was frustrated with the amount of money he was making.

Here is the story of a natural food retail store located in New York State.

The business itself is located in western New York State, within a small village. It sits upon one of the “main drags” going through the village and probably sees as much car & foot traffic as any other business in the limited “downtown” area.

I’m going to approach this as an “outside-inside” project. In other words, I’m going to look at the outside of the business first… and see how we can improve/market that better and then we’ll go inside for a review of that part of the business.

Outside: Quite frankly the village this business is located in is in tough shape. It consists of quite a few buildings that need some exterior help such as painting and what not. The facade for this business is for the most part is good, except for a couple areas that I’ll touch upon shortly.

The big problem I have with the front of the building is the color white. While the color white is good for a great many applications, I think for a retail storefront that is trying to attract attention it’s just plain boring. And since many of the buildings in the village are also white this causes the business to lose some of its identity.

What would I do? Probably paint it a variety of bright colors… yellows, reds, oranges. Colors that are bright and livid, colors that stand out. Colors that make the building jump to attention and make it noticeable to anyone traveling down the street. The building needs to be bold and the color white doesn’t cut it. Right now it looks just like any tired, boring storefront in “any village” USA. The whole building does not have to be repainted, just the front portion that is going to catch the eye. This will save on costs.

Secondly the concrete steps need to be patched up. This isn’t an expensive or time consuming project either but it can improve the appearance AND PERCEPTION of the business 100%. And remember perception is everything.

The front sign could be done in brighter colors also but I’m more concerned with the facade and concrete work at this point.

The last thing that needs be done from an “outside-in” perspective is to change, redo or eliminate all the signage hanging or taped on the front doors and windows. Many of the present signs are “dog-eared”, “yellowed” or “sun-bleached”. These signs don’t present a good image as the customer enters the building. Paper signs need to be replaced on a regular basis in order to keep the entryway from looking anything other than “clean”, “organized” and while I hate the word, it fits in this circumstance “professional”.

Let me put this important point across to you right now. The profits generated by the business are tied to the prices you charge. Duh--right! But you see in order to charge higher prices a business has to have a certain look or meet certain expectations in the customer’s mind. Remember a business that is well maintained, well run and well organized can still discount products and have sales. But a business that is not well maintained, well run and well organized can not ever hope to get higher pricesyou see the perception of the business just doesn’t allow it to charge more.

Inside: The thing I noticed after I first stepped into the building was the “inconsistency”. What I mean by this is that we have old building with old style walls with a drop ceiling and a tile floor. While I’m not recommending major construction I think there are a couple things that can be done to make the business look more “uniform” and “consistent”.

Let’s talk about the walls first. Since we’re not in a position to redo the floor and remove the drop ceiling let’s cover up the walls. With what you may ask? What about putting up pictures of East Otto and the surrounding areas? Put up photos of old buildings and of people that have lived in the area. This will help give the business a “theme”, which it really doesn’t have at this point and it’s a theme that ties itself to the community.

Now the ceiling, the ceiling tiles need to be desperately replaced and/or painted. These tiles aren’t expensive and sections of the ceiling could be replaced over time.

The floor… what the floor needs is to be stripped and waxed. And it should be waxed on a regular basis. I know of no other thing that can improve the overall look of a business more so than keeping the floor looking great. This isn’t expensive to do the results would be incredible.

Like I said previously if the overall perception of the store is one of being well maintained, well organized and well run then the store will not only see more business but profits will increase because it (the store) can charge more to fit it’s new image.

Inventory needs to be increased… not by thousands of dollars but in a couple important areas. First the whole “low-carb” thing that is sweeping the nation is a golden nugget of profit that “Naturally Your” is virtually ignoring. I would invest a few hundred dollars into this category as soon as possible. And then I would advertise the stink out of it.

Secondly, gluten free and sugar free products are selling big nationally and these two categories should have a prominent place in the building.

One point when it comes to inventorydo it monthly. If all the products were entered into a computer as were received in the store and then checked off as sold, inventory would not take very long to do. This would help find areas of concern as they apply to both store security and inventory “turns”, which is a measure of profitability.

The temperature of the store seemed a bit too low for me. While I respect the need to monitor utility costs this is an area where customers notice big-time and I think the impression it gives is one of being cut-rate rather than first class. I think it probably does not foster a pleasant work environment for everyone either… I mean who really wants to be cold while they work? If you’re concerned about costs don’t be. Everything I’m suggesting is geared towards improving sales and profits of the business. You neglect to do any of them and in my opinion your store’s ultimate sale and profit potential will take a hit.

The signage thing I talked about in the entrance-way is prevalent throughout the building--too many old, battered signs that make the place look unkept. Every month or so the signs should be redone on the computer because they do degrade quickly.

Let’s talk about personnel or more specifically their appearance. I greatly suggest that a standard shirt or smock be adopted by management and worn by all staff at all times. Why I suggest this is that it promotes consistency plus it does give the wearer a little pride because they are wearing a “uniform”. Consumers are always more receptive and respectful to people in a uniform. Call it psychological or call it crap but it does work that’s why the chain and franchise businesses require them. It’s not because they want to spend the money but because it helps them make money.

Obviously the layout of the store needs to be changed as quickly as possible so customers don’t have to go through the office area in order to reach other parts of the building. I realize that it is going to take time and money and it’s something already in the works.

I would also have some kind of music playing in the store, pick whatever type you want but music is usually beneficial for both employees and customers.

I would think a “Policies and Procedures” manual would greatly benefit this business. Not only will it cause tasks to be done uniformly and consistently it will greatly relieve the burden put on both the staff and the owner for training new employees. Not that new employees don’t need training because the do but verbal training is inconsistent training. The same, exact set of instructions are rarely given twice in a row. Verbal instructions are not geared to creating consistent service to customers and consistent operations throughout the store. High points should be touch verbally but every task that is done in that business should be written down in a simple step by step format and then arranged in a notebook.

Each new employee that is hired by the business is given one of these notebooks. Inside the notebook would also be the employment guidelines of the business.

Employees that aren’t trained in a professional manner and don’t work in a professional environment tend not to act professional about their position, towards the customers and towards each other. Does that make sense? It should because while it may be painful to acknowledge it is the truth. Even minimum wage employees need to be treated professionally, trained professionally and work in a professional environment. Do you want to see moral go up? Productivity increases? Theft goes down? Then implement these changes immediately.

Will you still get some “bad apples”? Of course, it’s unavoidable but it will allow you to turn some of these folks on the edge into good employees.

The easiest way I know of in creating a “Policies & Procedure’s” manual is to take one task every week and do a procedure’s sheet on that task. List each step of the task… you know “Step 1-Do this first”, “Step 2-Do this next”, “Step 3-Then do this”. Before you know it you’ll have a complete manual that can be photocopied and handed to each new employee. You can’t imagine how much easier a “Policies and Procedure’s” manual will make a business owner’s life.

Now let’s talk advertising. I think the easiest and cheapest way to advertise this business is to use simple and low-cost classified ads. Every week an ad should be run in some newspaper or penny-saver within the trading zone of the store. And these ads shouldn’t be some generic “Shop at Naturally Your’s” type ad. Instead advertise one product at an aggressive price OR advertise a unique part of your store, like “Lo-carb” products or “Gluten free” products or “Videos for rent” or something similar. Remember advertise something specific! Generalities don’t sell--specifics do!

In conclusion I think there is a lot you can do to improve the profitability of your business right now and without spending a fortune. Now is the time to get started.

A girlfriend of mine called me up this weekend looking for a DVD copy of an older piece of software. She was rebuilding a computer for a family member who had the product key but no installation media. I’m sure many of you have similar stories trying to fix or repair computers for your family and friends.

One of the nice things about using software online or “in the cloud” so to speak is that if your computer goes belly up and you need to rebuild it, the software will be there waiting for you, as soon as you can get computer back online.

For businesses, using online services can give you greater flexibility to pursue projects or try out ideas without having large upfront costs as well as providing  foundational IT infrastructure without investing in your own data center.

While a post I wrote a little while ago outlined the basics of traditional software licensing, I figured I should follow up with how to license software in the cloud since online software subscriptions are becoming more prevalent. This short video does a good job at laying things out – like why you’d want to consider using online services and some of the advantages and cost-savings of licensing software this way:

Microsoft has several online services: Microsoft Office 365, Microsoft Dynamics CRM Online, Windows Azure Platform, Windows Intune and others. Each service can be purchased through a volume licensing agreement or the Microsoft Online Subscription Program and then activated and managed managed through web portals:

• Online Services Customer Portal (Microsoft Office 365, Microsoft Intune)
• Dynamics CRM Online Customer Portal (Microsoft Dynamics CRM Online)
• Windows Azure Customer Portal (Windows Azure Platform)
• Volume Licensing Service Center (other services)

One day I’d love there to just be one portal to manage all your online subscriptions (kind of like one ring to rule them all but much less evil) but consolidation takes time and so I make no promises but I trust this is the direction our Online Services folk are heading.

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