Working with a newsagency on their roster and allocation of day to day management tasks, the business is set to cut labour costs by $28,000 over a year. Weeks in, this annual figure looks set to be achieved. An additional, yet to be measured, benefit is renewed involvement by an owner leading to better business decisions.
Over the years, the owner had migrated to the back room and had little to do with the retail business including inventory management. The business had become bloated with plenty of stock not moving. The extent of the problem was evident in the P&L, sales reports, inventory movement reports and other data points.
By bringing someone external to the business in, the owner was able to reduce the involvement of a family friend, cut employee hours and refused their attention themselves on their newsagency business – the single most important financial asset in their lives.
I expect that better management, labour cost savings and other benefits will result on a profit boost of more than $50,000 for this business in a full year. The only down side is the owner is spending more time in the shop – not so much on counter selling but on work they were doing in the back room.
In a small business like a locally owned newsagency, my experience is that some better business decisions are made if they are made on the shop floor.