A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Management tip

Check that you are paying your employees correctly

The stories in the media this week about underpayment of employees in cafes and other retail businesses is a reminder of the need to ensure you are paying your team members according to the law.

  1. Ensure you have proper record keeping for hours and wages.
  2. Provide a written pay slip with every pay.
  3. Pay on the record and not cash in hand.
  4. Ensure you pay the correct overtime rate.
  5. Ensure your superannuation payments are up to date.
  6. Ensure your workcover (or similar) is up to date.
  7. Ensure you have accurate records for leave.

No, family members should not be treated different to any other employee.

Employees can easily lodge a complaint with the Fair Work Ombudsman. They investigate every claim. Even the smallest oversight can have cost and reputational consequences for a business. Ignorance is no excuse.

I regularly hear from current and former newsagency employees with stories of claimed under payment. In each case I refer them to the Fair Work Ombudsman. When I have the opportunity I make it clear that I don’t want to know the business name as I am not the regulator. The thing is, however, people come to me after months of getting nowhere with their current or former employer, they come to me out of frustration and, often, anger.

I don’t want our channel to be the subject of the types of stories we are hearing right now about cafes where underpayment and other crimes are getting considerable media attention. We avoid this by obeying the law and encouraging our colleagues to do the same.

The most challenging story put to me is of a close relative of an owner, an adult male, being paid $15 cash in hand for 40+ hours a week that includes 8 hours every Sunday. This have gone on for three years. My rough calculation suggests that there is at least $50,0009 owed plus superannuation plus likely penalties. I am told this would kill the business. As I see it, the person who contacted me has to go to Fair Work for themselves and the likely other employees being treated similarly while the owner lives a more luxurious life. I suspect the owner has the money to fulfil their obligations.

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Management tip

A Theft Policy is key to reducing the impact of theft in any retail business

Issue this Theft Policy in your business, have all team members sign it and place it is a place where team members can see it every day. Doing this establishes your commitment on the issue as well as your policy and practices related to the issue. Following through on the policy is key for without discipline in this area the cost of theft in your business will be higher than it should be.

THEFT POLICY OF THIS BUSINESS

  1. Theft, any theft, is a crime against this business, its owners, employees and others who rely on us for their income.
  2. If you discover any evidence or have any suspicion of theft, please report it to the business owner or most senior manager possible immediately. Doing so could save a considerable cost to the business.
  3. We have a zero tolerance policy on theft. All claims will be reported to law enforcement authorities for their investigation.
  4. From time to time we have the business under surveillance in an effort to reduce theft. This may mean that you are photographed or recorded in some other way. By working here you accept this as a condition of employment.
  5. New employees may be asked to provide permission for a police check prior to commencement of employment. Undertaking the police check will be at our discretion.
  6. Cash is never to be left unattended outside the cash drawer or a safe within the business.
  7. Credit and banking card payments are not to be accepted unless the physical card is presented and all required processes are followed for processing these.
  8. Employees caught stealing with irrefutable evidence face immediate dismissal to the extent permitted by labour laws.
  9. Employees are not permitted to remove inventory, including unsold, topped, magazines, unsold cards or damaged stock from the store without permission.
  10. Employees are not permitted to provide a refund to a customer without appropriate management permission.
  11. Employees are not permitted to complete sales to themselves, family members or friends.
  12. Every dollar stolen from the business by customers and or employees can cost us up to four dollars to recover. This is why vigilance on theft is mission critical for our retail store.

PLEASE SIGN AND DATE YOUR ACKNOWLEDGEMENT:

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Ethics

What I learned visiting the Amazon Go store in Seattle

I am grateful to have visited the ground-breaking Amazon Go store in Seattle twice this year. This is an extraordinary shop, built by an extraordinary business.

  • No sales counter.
  • No cash or credit cards processed in-store.
  • Choose what you want, and leave.

In this video I explain what I saw and try for context for small business retailers in our part of the world. While I shot this for customers of my POS software company, it is relevant to newsagents and their suppliers.

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Management tip

Newsagency management tip: What’s next?

Mother’s Day is a big day in the seasonal calendar for any newsagency business. There was a time you could get through this season and rest until mid year or even Father’s Day. Not any more.

It is vital you have a new traffic generating pitch up from tomorrow, Monday. It has to be something you promote inside and outside your store, to bring in new shoppers and have regulars returning sooner.

Valleys between seasons need to be smoothed with substantial change in the business, which is backed with extensive out of store activity.

If you are in a newsagency marketing group or a franchise group they should have already pitched ideas to you for post-Mother’s day activity. My suggestion is you follow their advice – hopefully, you have done that and are ready for tomorrow.

Resting between seasons is not an option in newsagency retail today. 

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Management tip

WHY YOU SHOULD VET EVERYONE WHO ASKS FOR ACCESS TO YOUR BUSINESS DATA IF YOU HAVE YOUR NEWSAGENCY FOR SALE

When you list your retail business for sale, I suggest you have a clause in the agreement with the broker requiring them to get approval from you before they provide any business data to any party enquiring.

I am aware of several situations in our channel where a party has enquired and used the data obtained through the broker about the seller’s business to directly approach the landlord to seek to take over the lease.

I have been told of parties using the business data and a relationship with a landlord to facilitate them getting a business for no goodwill.  I am told of newsagents who have lost considerable sums because of this.

My advice is that you should personally approve every party you permit to have access to your business data and that you make this decision after careful through and consultation.

Yes, there are unscrupulous parties in our channel who fake interest in buying a business to provide them access to information they can leverage to their advantage and your disadvantage.

I appreciate the temptation to provide data to every party that enquires about purchasing your business because you are most likely keen to sell. Please do not let your keenness blind you from careful consideration of every decision you make through the process. You can’t take back data you have shared. It could be that you realise too late that a party on the other side is not honourable, as have others I have spoken with.

What I have written here is more relevant for shopping centre based businesses than those in high street situations as shipping centre landlords are, in my opinion, more likely to work with other parties to the detriment of an incumbent tenant. I have seen this happen too many times in our channel and in other retail channels, to the harm of the seller.

  • Be careful who you trust.
  • Vet everyone who seeks access to your data.
  • Control who has access to information about your business.
  • Make thorough notes abut every discussion.

I get that some will see my comments here as paranoid. That’s okay. All I can do is share my opinion. I could considerably focus attention by naming names. I won’t do that here because they would sue for sure. All I can sale is seller beware.

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Ethics

Celebrating the royal wedding: new traffic for the newsagency

I love these two displays in two of my stores leveraging the royal wedding opportunity. They are attracting new traffic and demonstrating the relevance of each business today. They are fun too. Plus, they pitch products people will purchase on impulse.

Magazines are placed adjacent, to maximise the opportunity. The interest in the wedding is extraordinary. It appeals to royal lovers and republic supporters in different ways. This is why the range of products on offer is so diverse.

The pitches you can see reflect how we can leverage major public events to broaden the appeal of our businesses beyond what has been usual traffic for us. The more people think of us for these unique occasions the broader the appeal of our businesses.

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Management tip

Shopping centre businesses need to go big or go home

Newsagency businesses in shopping centres need to be big, bold and constantly evolving. They cannot be the traditional newsagency business or anything even close to it, not now, not in the future.

Events are one way to differentiate and to compete with big businesses. They are important to attract shoppers from outside and from within the centre, especially in the big centres with 250+ stores.

I have two businesses in this major shopping centre situation, where everyday we fight to bring people in from the traffic in the mall.

Last Saturday, as part of the first ever National Beanie Boo Party, which was organised and run by newsXpress, as an optional marketing event for members, we hosted a party at the Knox store. This short video provides context for what we did in that business on the day to be setup – to achieve a revenue boost of in excess of $1,500 in three hours.

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Now, anticipating questions, read this:

  1. While I say this is a newsagency, it is a newsXpress business, focussed on plush, cards, gifts, collectibles first.
  2. This plush wall commitment is driving in excess of $100,000 in direct product revenue and not far of that in complimentary basket purchases.
  3. The party is an infrequent activity and deal based event designed to attract existing collectors from other retailers and to introduce non-collectors into collecting.
    net new traffic comes from not only the centre but from our significant out of store marketing on social media.
  4. Given the way this party was run at this location, there was no additional labour on the day.
  5. The video was deliberately shot at a time and in a way to not show those engaging.
  6. I’ve had this business for more than five years in this location.
  7. This feature wall works well. However, nothing is permanent in retail today, nor should it be.

I’d be happy to answer any other questions here. I can also be best reached on 0418 321 338.

Footnote: I am a shareholder in and director or newsXpress. In my newsagency life at different stages I have been a nextra retailer and shareholder and a newspower member. I have been with newsXpress since 2005.

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Management tip

School holidays marketing ideas for newsagents

School holidays are a wonderful opportunity its for finding new shoppers for your business.

To win new customers you have to act different to what you have done, you have to pitch your business in fresh ways and to people who otherwise may not have seen your business or considered your business.

But most of all, to make the most from school holidays, you need to have fun!

Here are marketing suggestions to help school holidays be more valuable for your newsagency. They are just some of the ideas you could embrace. Hopefully, you will think of plenty for yourself.

  1. Give teachers a discount and a thank you. Give it a name. For example: a Thank you for teaching 0ur kids discount. Run it for school holidays.
  2. Host a school art display. Invite kids to bring in art they have created so far this year. Be the place to shine a light on this, just because. Kids, parents and their families will love it.
  3. Promote holiday activities products at the entrance: colouring, puzzles, toys, games and more.
  4. Host local show and tell. Invite kids to create something, art, a poem, or something else connected to a local place of interest or local history. Host an in-store show and tell event where parents and kids can participate. The prize is less relevant than giving kids a voice.
  5. Pitch local. Create a simple flyer to hand out listing local holiday locations and events of interest.
  6. Let people play. Have products out and open for people to play with in-store. be the destination fun shop in town.
  7. Do product demonstrations in-store during the expected peak days, demonstrating thinks like a slinky, kinetic sand, slime, jigsaws and the like. Create some retail theatre.
  8. Place two or three dump bins with special offers at the front of the store containing products to appeal to the largest age group of school kids in your area.
  9. Publish posts on your business Facebook page with ideas of what people can do locally during the school holidays.
  10. Maybe have t-shirts made for staff: Holiday Crew or something similar. This helps them look different to everyday and that is key to making the most of the holidays.
  11. Host an event appropriate to the season:
    1. A papier machier pumpkin mask competition for September holidays.
    2. A paper plane throwing competition for summer holidays.
    3. A Easter art competition for all ages for the Easter break.
    4. A winter bake off for Winter – maybe connected with the cookbooks you sell.
    5. Run a best joke of the holidays competition.
  12. If you run discount vouchers, change the name to something like: SCHOOL HOLIDAY BONUS or HOLIDAY SURVIAL $$$. Have fun with it.
  13. Find out what groups host school holiday events in your area and publish a list as a resource for parents.

These ideas are designed to help you create a business during any holidays period that is looked at differently to the rest of the year, to help you gain a reputation as the best school holidays place locally.

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Management tip

Newsagency management tip: worry less about competitors

I appreciate frustration newsagents and other small business retailers feel when they see products they have had success with make their way into a national chain or a nearby competitor.

In many cases this comes about because the supplier needs more volume than the independent retail channel can provide. Hence the move to mass or more independents.

Most key competitors of independents attract different destination traffic.

For you to make the most of what could be a growing product category, and or licence, you need to become the destination retailer in your area. This takes more than putting product on the shop floor. It involves being the expert, promoting outside the business, hosting events and giving people to place your store top of mind when they think of the product, category or license.

The easy approach is to complain about the actions of the supplier. The better approach is to deny the supplier this consideration by being better from the outset.

Competitors will always be there. Suppliers will always need to more more stock – usually because of manufacturer pressure.

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Management tip

Some small business newsagents rely too much on accountants for business decisions

While accountants can play a valuable role in business decisions, I see and hear of situations where the accountant has too much of a say.

In one situation recently an accountant told a newsagent they should put tobacco products into their business because all newsagents have cigarettes. This was in a business the accountant’s client had recently purchased, their first and the first newsagency for the accountant.

The previous newsagent had got out of tobacco five years earlier because of falling sales. But here was this accountant telling someone new to the channel and new to retail that they should get into tobacco. They did.

That was almost a year ago. It has not gone well.

The accountant thinks the retailer failed. The retailer thinks so too. This is despite evidence in the business data showing growth elsewhere in the business, where the retailer backed their own instincts.

This is one example. There are plenty in our channel, where accountants have provided advice that is either out of date, not relevant to a transforming newsagency today or plain wrong. And there are plenty of examples where accountants have provided excellent advice to newsagents.

Some decisions are not about the numbers alone. With the extent of change we are confronting, taking a risk beyond what the numbers show will be key to success in a year or two.

It is important to remember it is your money on the line. As the business owner, you have to back yourself. Relying too much on an accountant who is not in the business, who may not have relevant knowledge about your channel, may hold you back. It could head you in an inappropriate direction.

My advice is to by all means listen too your accountant. However, have the data and knowledge to make decisions yourself, and in a timely manner, based on your own evidence. The pace and scope of change today demand this from us in business.

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Management tip

Newsagency management tip: handling charity donation requests

I have written before about the need for policy and process around community group and charity donations. I like the approach of a cafe I visited recently. Every person approaching on behalf of a charity was given a card.

While the cafe is part of a small chain, their approach of bringing structure to handling the request is good. A single local business could easily do the same. Groups expecting you to support them need to show support for your business.

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Management tip

Newsagency management tip: end of year declutter

If you are working this weekend and not in a busy Summer holiday location, things are bound to be quiet. My suggestion is to take the opportunity to declutter.

At this time of year in retail, decluttering to me means quitting a product, category or even department that is not relevant to how you will see your business in 2018.

The departments that could be vulnerable based on data I see from a bunch of businesses:

  1. Everyday confectionery.
  2. Tobacco.
  3. Ink and toner.
  4. Low performing stationery.
  5. Transport tickets.
  6. Newspapers.

It is easy to get data for your business, to be driven by the numbers. By this I mean, look at the GP the target product / category / department is generating, consider the space and labour costs. This process will soon reveal if you should quitting any.

This is a good, practical, project for a quieter trading day.

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Management tip

Reducing magazine floorspace allocation in the newsagency

We have moved magazines off the floor, to the back wall of this newsagency. While it is the back wall, it is a feature, and easily shopable. It is also not too far from the front of the shop. This magazine wall can be see from outside the shop – this is important to us.

To cover the range of magazine titles we want we have, in some sections we have three titles where we would usually have two, and four sometimes where we would have two.

This move reduces the cost overhead of magazines to the business. This is essential with any product category that is at the low end of product margins in the business.

This latest most is another step in the regular dance of shop floor changes. In this shop, over the last three years, we have changes magazine floorspace allocation six times. Each was considered based on the data and reflecting what we want the business to become.

The days of traditional floorspace allocation based on traditional newsagency layout and operation are over. We are in a world of ever-increasing rent and labour costs, tougher competition from other retailers and tougher competition from online.

The extent and pace of change in our businesses needs to reflect these factors. It also needs to reflect how we pitch our businesses.

In the case of the store I am writing abut here, it identifies as a newsagency. Hence the extent of the magazine offer on the back wall. However, it is clearly a newsagency that is some distance from traditional as the majority of the floorspace is allocated to gifts, collectibles, cards and other high margin lines.

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magazines

Notes for school leavers joining the full-time workforce

I have some advice for school leavers joining the full-time workforce:

  1. Learn as much as you can.
  2. If you are not sure of something, ask. Don’t assume.
  3. Work out how to love your job, because if you don’t, working there will not be good for you or the business.
  4. Be as low maintenance as possible. Your employer is not an ATM you can tap every time you feel like sleeping in.
  5. How far you go in a business, and in your career, is up to you. You get out what you put it.
  6. Add value. If you do this a business will want to keep you and that gives you leverage in this job and your next.
  7. Every day, it is up to you.

If you are a business owner and hiring school leavers, step up to the responsibility seriously. You hire them, train them, manage them and determine their value to the business as as the value of the business to them. Oh, and being their friend is not an ideal step to good management.

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Management tip

Newsagency managent tip: selecting gifts for the business

Take a look at card sales by caption, work out the percentage of each. Use that percentage breakdown as a guide for the percentage allocation of gifts for those occasions in your gift department.

Too many newsagents buy gifts for seasons. That approach will not help you achieve the gift sales you could achieve.

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Gifts

Christmas 2017 is good already

While we are still nine days out from Christmas, the season this year is already quite different to recent Christmas seasons.

My experience and the experience of folks I have spoken with in a range of situations is that people are shopping sooner and they are spending happily.

Purchases are across the board: cards, ornaments and decorations, gifts as well as everyday items.

One newsagent in regional Queensland contacted me yesterday with the news that their gifts are top 48% off a terrific base and cards are top 12%, also off a good base.

I know of several newsagents who purchased large, expensive, centrepieces for Christmas window displays only to have them purchased by customers in a day or two.

While I don’t want to jinx trading between now and next Saturday, I’d say we are having a good Christmas in retail.

Christmas is a season when the maxim – we make our own success – is true. For this season, making our own success means thoughtful buying, in-store storytelling, in-store basket depth driving tactics, out of store marketing and keeping it fresh, every day. It is hard work, starting from the end of the first quarter. The results are worth it.

What I love them most about Christmas is that we see many new faces and each is an opportunity to pitch a return visit after Christmas. A good Christmas is one step, of many, to a good following year.

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Management tip

Newsagency management tip: look at your opening hours

It is important to open your retail business in the morning at the right time. The right time the time from which it is financially viable for you to be open.

Historically, newsagencies have opened early … 6am often, 5am in country town locations, even earlier.

Look at your data, track your revenue and gross profit. Consider other tasks that are done in the early hours. It could be that you can trim your hours without any significant negative impact on the business.

Years ago in a newsagency I owned we moved fro a 7am opening to 8am. Some customers complained, saying they would never shop with us again. Few who complained acted on their complaints. We cut labour costs by $150.00 a week. The GP for sales in an average week for that first hour tracked at less than $100.00. The decision made sense.

This is how to look at your opening hours, though the numbers. Even if your decision ultimately is to not change your hours, it is valuable to run the numbers, to make an assessment based in the facts.

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Management tip

Stunning early boxed card results

I have data for a small suburban store that has clocked 825 units of boxed Christmas cards up to earlier this week. That is well over $10,000 in revenue from a category in which this business had not focussed in the past.

Thanks to simple, consistent, social media messaging, thoughtful in-store placement and a small footprint counter pitch, the boxed Christmas cards are selling like hot cakes.

Whereas the previous owner had the view boxed Christmas cards don’t sell here, the new owner decided to not manage to meet low expectations. This is important as it allowed the business itself to show what I could achieve.

For years, this business was run based on the assumptions of what the owners knew would work yet here we are under new ownership and seeing what can work.

While you may hear you are not your customer from suppliers and others in the newsagency channel including me, it is hard to live up to that, it is hard to be genuinely open to what a business can do … especially if resources are tight and your capacity to weather mistakes is limited.

My advice is to work at being open, at giving your  business opportunities to surprise you. Be drawn to those who will challenge your view. Take time to consider suppliers who were told by previous owners their products would not work.

This business, in less than a month, has added over $6,000 in GP from a product category that the previous owners rejected year after year because of their belief it would not sell in that location.

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Greeting Cards

Newsagency management tip: don’t clog your data

Some suppliers load your computer systems with considerable more data than is necessary. Take Blueshyft, in my opinion they want you to load 100,000s of stock items because their tech approach is inefficient. Their inefficient approach is decd and abetted by XchangeIT. This is all so you can sell low margin agency product that leeches off your traffic rather than driving net new traffic … again, in my opinion.

Bloated data files are not good practice in any IT system.

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Management tip

Newsagency management tip: understand what insolvent trading is

A business owning three newsagencies went broke months ago, owing close to two million dollars. The liquidators report was released recently, declaring that the business had been trading while insolvent for at least two years. This finding could have serious consequences for the directors.

ASIC defines insolvent trading:

An insolvent company is one that is unable to pay all its debts when they fall due for payment.

Yes, the definition is that simple. The director of the company to which I refer above was a blowhard, a gunna my mother would have called them. Gunna do this or that, with an attitude that they were an amazing business operator. Except, they were not. Many suppliers to the channel were left out of pocket along with banks and the ATO – and through the ATO, all Australians.

In my experience, often, the louder someone is about how great they are in business the worse they are.

ASIC provides advice on what to do if your company is insolvent:

If your company is insolvent, do not allow it to incur further debt. Unless it is possible to promptly restructure, refinance or obtain equity funding to recapitalise the company, generally, your options are to appoint a voluntary administrator or a liquidator. The three most common insolvency procedures are voluntary administration, liquidation and receivership.

ASIC has plenty to say on insolvent trading, including:

If dishonesty is found to be a factor in insolvent trading, a director may also be subject to criminal charges (which can lead to a fine of up to $220,000 or imprisonment for up to 5 years, or both). Being found guilty of the criminal offence of insolvent trading will also lead to a director’s disqualification.

ASIC has successfully prosecuted directors for allowing companies to incur debts when the company is insolvent, and has sought orders making directors personally liable for company debts. ASIC also runs a program to visit directors, where appropriate, to make them aware of their responsibilities to prevent insolvent trading.

If you think you may be insolvent, reach out to someone you trust for advice and to be by your side as you navigate the challenges.

The newsagent in my story did not want help. They said there was no problem.

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Ethics

Management tip: track what you put into hampers

If you create and sell hampers in your retail business, use your software top track what is in each hamper and create a barcode unique to the hamper. This enables easy tracking of each individual item sold as well as the hamper sale. This is vital for tracking the performance of the hamper side of your business.

The software will also allow you to reverse any hampers made, retreating the hamper data back to the single items that made it up, should it not sell.

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Management tip

Newsagency management tip: take care how you price items

With more and more collectibles being sold in newsagencies, it is important that the value of the collectible is maintained. This means not writing prices on boxes and not using stickers with an adhesive that leaves a hard to remove residue.

People who purchase collectibles will stop purchasing fro you if the items they collect are damaged in a way that compromises the value of an item.

Yu have to think like them.

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Management tip
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