Management tip

Discussion at the newsagents yahoo email group last week indicate the extent to which newsagents delay payment for stock.  I know of newsagency suppliers with average collection days for 30 day accounts of 55 days and more.  This is a problem for the chanel as it pushes up prices for all of us.

Newsagents can better manage their trade debtors by following some simple steps:

1. Order stock based on what is selling. This stops you swelling your shop with too much speculative product. If you want to bring in something new, convert some existing stock and space to cash first. Use your computer system.
2. Track how quickly you turn your stock by department and supplier. Use your computer system. You will probably change your current buying decisions.  You can access the data easily.
3. Look at two or three key management reports weekly. Stop waiting for your accountant. Stop relying on someone externally. Use your computer system. It knows more about your business performance than anyone.
4. Be accountable. If you can’t pay an account on time it is your fault and you have to fix it.

I’ll gladly help any newsagent wanting advice on which reports to produce and how to read them for genuine business value.

1. Tell suppliers who do not provide you with an electronic invoice that you will cut them off – they are costing you time.
2. Put barcode labels on fewer products. If they have a barcode, use it. For magazines – your software will tell you what to return.
3. Stop ordering replenishment stock manually.
4. Stop entering sales data into a spreadsheet for analysis.
5. Run your business with processes as well as checks and balances that enable it to open and close without you.

Track cash you take from your register for petty cash payments. Otherwise, you educate those who see you that cash management / balancing is not important to you and invite their laziness on tracking cash.

Newsagency software can help you record petty cash taken out or cash added, this can feed into your accounting system and thereby provide an easier means of managing cash in your business.

Most newsagency software reports on items in each sale and average sale value. Both are important KPIs in retail but most newsagents do not not take notice of or target these KPIs.

Both items in each sale (in the basket) and average sale value measure the efficiency of sales in the business. the more items per basket and the greater average sale value the more margin dollars you get to bank per sale.

Long-term success for any retailer in today’s marketplace is all about small steps. Small increases in basket depth and value can add significant profit today and value to the business over the long term.

How do you grow basket depth and average sale value? …

• Relevant counter offers placed with little competing visual noise.
• Well-trained and motivated shop floor staff.
• Compelling displays.
• Products people want.
• Good external marketing of the business.

All this is just a start.

A visual representation of your roster can help create a more efficient allocation of employee resources. Good roster software should be included in your newsagency management software. Use this to review shift allocation with a view to developing the best roster structure for your business. I know of newsagents who have gone from a manual approach to a visual, drag and drop, approach and saved over $100 a week from seeing inefficiencies they had missed.

While more and more newsagents are using loyalty cards of various sorts, few track the number get put out into the marketplace. This denies a key management metric opportunity. Count the new cards you hand out per day and set a target. This will encourage your team to get ore cards out there.

Good newsagency software gives newsagents easy access to the average number of items in each shopping basked and the average value of purchases in each shopping basket.

The current newsagency channel average, not taking into account lottery product sales, is 1.53 items per basket. This is low compared to any of our peer retailers. Do you know what your figure is and whether it has changed this year compared to last? Go find out, it’s important since your most important competitor in terms of business performance is you.

My own newsagency software provides basket size data on several reports, so we can easily see how we are tracking compared to last year, last month and for other times. Growing basket size is one of a series of growth KPIs we have for our businesses as part of what we call a small steps strategy.

While many newsagency business owners work the shop floor, many do not … not as a sales person that is. My management tip suggestion is that owners set themselves a sales target for each hour on the shop floor.

The target should reflect the value of items shoppers purchase based on your work on the shop floor. These will usually be incremental purchases, items they might not have bought had it not been for your shop floor work.

Working to a target will … show how hard or easy this is, help you measure your own effectiveness, get you looking at your shop floor differently and maybe fines your approach in managing your own staff.  Take it seriously. Let your team know what you are doing and why. Share with them the sales target you have set for yourself.

This suggestion came about because of my own experience on the shop floor yesterday.

I get to see sales data from many newsagencies and one of the most frustrating lines in sales data is a line labelled as unknown. This is where the software does not know what has been sold. Most often, it is because the sale has been done as what is a called a department sale. The sales person presses, say, stationery, and enters the amount for an item. While this does track the sale as stationery, it does not track the item itself.

There is a cliché saying: you can’t manage what you don’t track. The thing is … this saying is true.

Every department sale, where a physical item is not tracked specifically, is an opportunity for fraud. It is also a missed opportunity to know about your business and therefore to make better business decisions.

Most concerning of all is the message that a department sale gives your employees. It tells them that you don;t respect data. They can take this as leadership and not respect your data too. We need to lead by example in our businesses. respecting business data is an important part of this.

There are no excuses for department sales, for using a computer system as a glorified cash register.

Get rid of the department sale and you will reduce the opportunity for theft, know more about your business, save time through fewer keystrokes, save mistakes through fewer keystrokes and be a better newsagent.

Your software company should be able to help you eliminate department sales. It’s easy.

One way to achieve a better margin for products you sell is to take the settlement discount whenever possible. Many newsagent suppliers offer this yet the majority of newsagents do not take it.

I have heard of newsagents not taking a 20% settlement discount – preferring 30 day terms. You could pay the bill on time with your credit card, take the 20% and be better off. This doesn’t make sense to me. In one business I looked at recently, they could have added more than $6,000 in a year to their bottom line profit by taking settlement discounts. Who wouldn’t want $6,000 extra profit?