Management tip

While being direct in your communication with someone can lead to them thinking you are offensive, it is the best way to communicate your concerns. In the long term, being direct pays off.

Many years ago I had an employee who had shocking body odour. Subtle approaches did not work. A direct approach about their smell resulted in the problem being resolved. They stayed on for years and we had a good relationship. This was a win for being direct.

More recently, I had another employee with an odour problem – not this is not something I seek in hiring people! – and I approached them believing, by then, that direct was better.  I wasn’t rude, at least I didn’t think I was. I explained that after a couple of hours work they started to smell and it was being noticed by co-workers and had been noticed by customers. They resigned a few days after I spoke with them.

Some topics are challenging to approach directly but that should not stop us. Being direct is not about being rude, it is about communicating your concerns clearly and directly, proving all the information necessary for them to act on what concerns you. The alternative is a meandering indirect route and that can end you up somewhere you do not want to be.

A spade is a spade is a terrific figure of speech, it reflects how we should communicate in business.

It’s easy in small business to lose touch with the world outside your business, to lose touch with the world your customers live in. It could be that the world as you know it has changed in ways you are not familiar with.

Take a day, yes I know that is harder than it sounds, but take a day and hunt down where people living in the area served by your newsagency could purchase any of the top twenty products or services you sell.

Search online for the items – from your home computer and using your mobile phone when out on the street near your shop. Where are people looking on-line and on-mobile being sent when searching for these top selling items on which you rely? Go have a look at those businesses. Look at them in the context of what you offer, look for points of difference.

There will be some businesses competing with you, through the search engines, that are not located near you. Consider these carefully as part of this exercise. Too often newsagents discount them – you’d only do that at your peril.

The goals here are for you to discover competitor businesses that may not have been on your radar and to learn more about how they specifically compete with your business. The insights gained could inform your business plans. They could lead to immediate changes in your business.

Consumer habits have changed significantly in recent years and smart retailers are embracing these changes. My experience is that independent small retailers are not keeping up with the changes because they are ignorant of how some people, people who may have shopped with them in the past, now shop.

So, take a day and try and compete with your business.

While we get plenty of advice from people inside our newsagencies, how much advice and feedback do we get from the community outside? By connecting with local clubs and community groups and using local services, we give people and opportunity to provide us feedback.

One way to get feedback is to offer to speak at a local community group – maybe sponsor them and this can open the door. Just by putting yourself out there you’re likely to be in front of people who do not frequent your business and in doing so let them see that you’re not the person they have heard gossip about or that you are not the person they assumed you were. They feedback could help you see something that needs addressing in your business that you have missed.

The more you are in front of people in your community who do not currently shop at your newsagency the more opportunities for attracting them to your business.

Given the history of today’s retail newsagency business and the regulation surrounding the supply of several core categories, it is not unexpected that we see some businesses heavily dependent on a small range of product. I think this is unhealthy.  I know newsagents who like this, that half or more of their sales come from a single category like magazines, cards or lotteries.

With the changes we are seeing with print media, how where and when people purchase lottery products and with retail in general, now more than any time in the history of our channel we need to be less dependent on core categories.

As a guide, I would suggest that a single product category should generate no more than 25% of revenue. If we were to use this benchmark, it could guide us to expand what we sell to thereby drive the efficiency of our business and make it less dependent on a smaller range of categories.

I am suggesting a glass is half full approach, not a glass is half empty. By that I mean: say 40% of your sales are magazines – don’t cut magazine sales. Introduce new product categories which will sell to magazine shoppers so in terms of percentage of overall revenue magazines account for less. This is a win win. Yes, it’s hard work – but it’s what smart retailers do.

Newsagents who address the category mix will create for themselves a business that is less buffeted by changes impacting these large for categories. Here are other categories you could consider if you are not in these already: gifts, plush, toys, hardware, garden products, coffee / cafe, party, furniture, pool supplies, specialist printing, locally grown fruit. As this list shows, there are no rules – certainly don’t be bound by the shingle above your door.

I know of newsagencies that closed last year in Australia that relied too much on one or two categories and when those were hit, it was too late for them.  A business closing because of a decline in just one or two product categories is a weak business. You can plan to not be as impacted by this.

I urge newsagents to act on their product mix now, with urgency. Your first steps can be guided by your existing business data.

When was the last time you looked at the roster for your newsagents? Do you know the total weekly labour cost for the business? What is is the sales revenue per rostered hour that you are achieving?

These are important questions for newsagency businesses. While our bigger competitors roster with fine precision, we often roster our businesses based on emotion or personal need.

If you want a better return from your business, look at your roster: look at it as an overhead and look at it as an opportunity. make your roster decisions based on business performance data. Do more of what is working and less of what is not. Remove emotion from the equation.

Labour should cost no more than 11% of your sales where sales is revenue for non agency lines plus commission on agency lines.

We use Sundays to get some serious work done, work like:

1. Early magazine returns (I check for titles not paying their way).
2. Deciding other items to quit: pricing & displaying to sell quickly.
3. Card returns.
4. General re-stocking from space stock.
5. Putting out new card stock if there is any left to do.
6. Rearranging non-circulation product displays ready for the week.

With Sunday labour being so expensive we run the business to ensure there is plenty of valuable work to do.

What differentiates your retail newsagency from other businesses that sell what you sell?

ASK YOURSELF: How is your card offer different from others selling cards? How is your stationery offer different from others selling stationery? How is your magazine offer different from othgers selling magazines?  And so on…

No, you can’t say service is your differentiator. I won’t accept that. It’s too vague. Specifically, what is different about your business? Think about it. Take your time. It has to be something you deliberately do in and through your business to compete.

Your difference has to be noticeable, valuable and memorable.

If you get this right and offer a genuine point of difference that truly is noticeable, valuable and memorable your business will compete effectively. If you’re losing business to your competitors then your point of difference is not working.

This is my management tip today for retail newsagents and other retailers – think carefully about how you compete, assess your performance and take steps to improve if your numbers show your current approach is not working as it should.

To read more on this see my post on How to develop your own Unique Selling Proposition.

The strength of and value derived from the team working in your newsagency will depend on the leadership you provide. The best leadership you can provide in small business retail is being present with team members, working alongside them, giving them opportunities to learn from you.

Too often newsagents try and lead their businesses from the back room. Too often I see an old-school structure when a small business works better with a flat structure.

The best way to communicate how you want something done is to show it being done. The best way to share your vision is to work at implementing it alongside team members. The best way to show the level of customer service you want is for you to deliver it. The best way to show how you want your team members treated is for you to treat them this way.

Being present and working your business with your team offers excellent opportunities to good leaders.

It’s tough work running a newsagency, working 70, 80 and more hours a week covering many tasks from business manager to cleaner to customer service to creating retail displays. There is always something to do. Some days it can feel like no matter what you do you have more to do at the end of the day than when you started.

No matter how busy you are in your newsagency I urge you to take time out every day for a brisk 20 to 30 minute walk outside, in the sun, alone. Leave your phone behind – the shop worn’t burn down. Time yourself and try and get at least 3k, preferably 4k, of walking in.  Getting your heart rate up will be good for your physical and mental health.

If walking every day during the day is too much of a challenge, try it early in the morning or once you close at night.

Being away from the business, other people an the phone will give your body and mind time to process. I walk between 8k and 10k every day. It’s the lunchtime walk that’s the best as it refreshes me for the afternoon. I find the business benefits of walking outside in the sun are considerable.

See the Vic. Government website for health benefits of walking for a brisk 30 minute walk each day. See the SA Government website where they talk about walking making us happy.

Whether your newsagency is open Boxing Day or the day after, immediately after Christmas is an opportune time to quit dead stock – any stock that has not sold in six months or more. In fact, I’d class stock as dead if it has not moved in three months.

So, use your computer system to list your slow or not moving stock, decide on your rock bottom price, think about how your will display this and design appropriate SALE PRICE tickets to promote the discount.

If you’re in a shopping centre you will probably need to run a lower price than if you are in a high street situation. My experience over the years is that most retailers in a shopping centre will drop prices considerably in their Boxing Day Sales.

In considering the stock you will cut, target two or three items for cost or below pricing. make these your hero products. They need to be genuinely sought after products. It could be even that you buy in especially. However, the real value for any retailer of a post-Christmas sale is to clean out the dead wood and make space for new product.

On the first day of every month I look at the Monthly Sales Comparison Report for my business, comparing year on year performance by department, category and supplier. Looking at revenue as well as unit sales where appropriate. Every good newsagency software package, every good retail business software package, will have a report like the Monthly Sales Comparison Report to enable easy year on year comparison.

Your most important benchmark is how you have done for the most recent period compared to the same period a year ago.

Click on the image to see a larger version. The data in the example is not as important as the layout. I have removed the business name to avoid identification.

On this report you have the most recent period on the left, the older period in the middle and the variances on the right. In seconds you can see how you are doing. This is the report I use most of the time in my businesses. I look at the back page first where I compare traffic, basket value, basket depts and overall sales growth. Next I look at key departments and compare revenue and unit sales performance. For example, with magazines I compare performance at the MPA magazine category level using unit sales as the measure. With stationery, I look at revenue.

I also look at the percentage of revenue by department because balancing the business is important to me. I don’t want too much revenue to come from one department. I manage balancing revenue by growing others rather than shrinking one that is too big.

I urge newsagents to find this Monthly Sales Comparison Report or similar in their software and to use it regularly to track performance. Do this, live by the results reported – and your business will improve.

Footnote: the Monthly Sales Comparison Report is a key report I use when undertaning newsagency business performance analysis. It’s also the report I would look at for any newsagency I was considering purchasing.

The best way to achieve the best price possible when you sell your newsagency is for the business to be as profitable as possible. The price you will sell the business for will depend on provable profitability.

Too many newsagents run their businesses expecting that their pay day will be when they sell and that the price will be a multiple based on some sort of industry formula. These formulas no longer apply except that of a sale price based on a multiple of net profit.

I urge newsagents to stop running their businesses expecting that their pay day will be when they sell. Instead, run your business as if every day is your pay day. The profit you make today and this week is the return your business delivers to you. If it’s not profitable then do something about it. It’s your business! Act! Look at your costs, your pricing policies, your marketing and your management. Take control of the business. Back in 2010 I wrote more on this topic here.

You don’t buy a newsagency today as a safe place to park your retirement money. No, you buy it as a viable operational business that delivers a return each day and week. Your profit today and this week is your responsibility.

The most important profit you will make is today and this week. Is this how you run your newsagency?

The one thing successful newsagency businesses have in common is good business data management. Good business data management starts with meaningful product departments and categories.

Don’t fall asleep! Too often newsagents and other small retailers I speak with roll their eyes at this point and say it’s too hard. Nonsense. You’re lazy if you do not setup and maintain a good department and category structure in your newsagency software.

Departments should be high level: stationery, gifts, cards, plush, magazines, newspapers.  No, newspapers and magazines don;t go together. No, art products should not be in stationery. No, gifts should not be part of cards.

Categories – these sit within each department – should be meaningful to you. Do not use suppliers as a category as newsagency software can report separately on suppliers.  Use categories to help you understand what is selling. here are two examples:

• Department: Plush. Categories: Funky, traditional, kids, collector.
• Department: Gifts. Categories: Baby, kids, teen, adult, religious, Xmas, home.
• Department: Stationery. Categories: writing inst., tape, glue, stickers, school, office.

Come up with your own, that are meaningful to you. The goal here is to help you easily see in reports from your software what is working. departments and categories report at a high level. Once you see something of interest you can dig deeper in detailed reports.

get this right and you have a foundation in place to grow your business.

Shopping basket analysis from newsagencies indicates that newspapers and lottery products continue to be inefficient for newsagency businesses. Between 70% and 90% of purchases with either is for that category only: a newspaper alone or a lottery ticket or two and nothing else.

Too often newsagents blame customers and or suppliers for the inefficiency. This is a mistake. The reason for inefficiency lies in the business itself.

If your sales of your top selling (volume) items are inefficient embrace responsibility. Complaining will not change the situation. Act.

Here is one tip that I have found works. When you are closed for the day, run masking or gaffer tape on the floor from the door to where customers go to get their newspaper. Next, run tape from there to the counter. Finally, run tape from the counter to the door.

Walk along the tape. Look at what’s along that route. Look at what customers see, if their eyes are open. Look at what you are promoting along the way and at each destination point: papers, counter, doorway.

Look at the floor, how are you using that?

If your lottery sales are inefficient do the same thing.

Don’t remove the tape and go home until you have an action plan of things to do to make newspapers and or lottery product sales more efficient. Next, act on the plan first thing in the morning.

A good action plan will involve a series of small steps. I’d suggest posters on the floor, maybe a game, with one or two stop points where you feature product. I’d have an over the counter promotional offer. I’d also have an offer at the door. Plus, regardless of what suppliers say, I’d have impulse purchase items right next to the popular inefficient products – including at the lottery counter. If what you do doesn’t work. Go through the process again. This is what a retailer would do. A shopkeeper would stay behind the counter and complain.

Product inefficiency is a challenge for the retailer to resolve.