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Q2 newsagency sales benchmark study results

The April – June quarter was tough for core products sold through the newsagency channel. In addition to the continuing decline in print media sales, this quarter’s benchmark results reveal a troubling downturn in lottery revenue as well as card revenue.

Here are the headline numbers by key product category:

  • Magazine unit sales declined 11%.
  • Greeting card revenue declined 4%.
  • Lottery revenue declines 4%.
  • Newspaper unit sales declined 12%.
  • Gift revenue increased by 11%.
  • Toy revenue increased by 16%.
  • Stationery revenue declined 8%.

These are not good headline numbers. The bottom is falling out of the historic core of the newsagency channel. This will not be news to many as it continues a trend we have seen in this benchmark study for several years.

The above percentages reflect the overall performance of the 181 newsagency businesses in this benchmark study. It includes stores from a range of banner groups as well as independents. There are large businesses and small. Some are in shopping centres while others are on then high street. The cross-section is broad.

What is concerning is the pace of decline, especially with magazines as the decline had slowed recently. Looking more closely at the data, the decline is in the volume categories. Fringe categories such as special interest titles are doing well. Indeed, some segments show terrific growth.

Newsagents need to manage the overhead cost of newspapers and magazines. Labour, space and capital investment needs to be kept in line with the gross profit contribution of these categories. Busy work relating to newspapers and magazines should be eliminated.

The decline in greeting card revenue is a surprise. The reported percentage of decline, 4%, does not read well. However, like all the above data points, it is an average from the entire data pool. There are stores experiencing decline above 20% with others reporting growth above 20%. There is a clear correlation between stores with strong gift sales and card performance – in this case card revenue is stronger.

GOOD NEWS.

The good news is the performance of businesses playing outside the traditional space. For example, the newsagency with $25,000 in toy revenue in the quarter, reflecting growth of 18% or the newsagency with $45,000 in gift revenue and year on year growth of 22% of the newsagency with card revenue of $47,000 and year on year growth of 22%.

There are many good news stories in the latest study results. However, the good news will be overshadowed by the performance of the majority. It is challenging, some days, to know what to do or say to cut through with newsagents who are not engaged.

Too many newsagents think growth will come from categories close to what they have done historically. For example, too many get into cheap social stationery thinking that is competitive with Kikki.K or Typo.

My experience is the best growth comes from turning away from traditional lines and traditional suppliers and going with products and price points you would never have considered for a newsagency business. I see this approach working well in the benchmark results in businesses of different sizes and in different situations.

OVERALL PERFORMANCE DATA.

  • Customer traffic. 78% of newsagents report average decline of 5%.
  • Overall sales. 53% reported an average revenue decline of 3%.
  • Basket depth. 61% report a 2% decrease in basket size.
  • Basket dollar value. 63% report a decrease in basket value of 3%.

It is in the overall business gross profit numbers where the differences in businesses can be seen. 62% sit in the traditional newsagency GP performance band of 28% – 30%. 7% sit below 28%. 20% sit in the GP band of 30% and 35%. 7% sit between 35% and 40%. The rest, 4%, have a GP of more than 40%.

GP is a function of what you stock and the type of shoppers you attract to the business. Buying is where it starts.

WHAT IS DRIVING THE DECLINES?

Close to 80% of the businesses in the benchmark reported a decline in traffic with the average decline set at 5%. However, just over half reported a decline in revenue. This is because plenty are selling higher priced items, usually gifts. This softens the blow of the decline in legacy products.

I think the traffic decline is being driven by a decline in interest in legacy products on which traditional newsagency businesses have relied. I have said for years it is crucial newsagents have a strategy to drive net new traffic. Relying on legacy product to sell new products is not a plan. You need to source new products and to use these to attract people to your business who would otherwise not have shopped with you.

HOW TO RESPOND TO TRAFFIC DECLINES?

Any newsagency business can be successful, regardless of location and situation. This is truer today than at any time in the past thanks to what we can see being achieved online – not only in newsagency businesses but through other retail channels.

The key to success is to not run the business as a newsagency. That’s is, to not obsess about legacy products. Focus on new traffic products. Focus on price points you would usually say would never work in your business. Buy products you think will never work. Be radical and through discover what is possible in your business.

I urge you to ask yourself daily, what have I done today to reach a new shopper, someone who does not know we exist? This is what successful businesses in the benchmark study are doing and doing well.

DOES THE NEWSAGENCY CHANNEL HAVE A FUTURE?

I ask this every quarter. My answer remains – Yes! Absolutely. If you are prepared to shrug off what has been traditional for a newsagency business, stop hoarding, embrace change and embrace social media – you can have a bright future. The transformation from traditional to the new world must be urgent and dramatic.

AGENCY IS OVER.

My opinion remains – there is no upside in any agency parts of the business. People saying they are proud to be called a newsagent are entitled to their view. History will show that era is behind us.

OPTIMISTIC.

I am optimistic for my own newsagency businesses and for the businesses of many newsagents. Indeed, I have opened a new outlet the last few months. It does not look or feel like a newsagency. The numbers are terrific.

WHY I DO THIS STUDY

My interest in the study is as a newsagent and as a supplier to the channel through Tower Systems and through newsXpress. I want the channel to grow for selfish reasons and because it has been my life since 1981. I am invested.

BENCHMARK GOALS.

I am often asked for benchmark goals newsagents ought to aim for. Here are some benchmarks I have developed in my work with newsXpress and through Tower Systems:

  1. Gross profit: this is the goal gross profit for all product sales not taking into account any revenue or costs related to any agency business. The traditional newsagency average sits at 28% to 32%. For a newsagency focused on the future, the goal has to be at least 45%.
  2. Ratio of Gift revenue to Card revenue: 50% minimum. The goal ought to be 100% or more. If you do $100K a year in cards, target to do $100K in gifts, or more.
  3. Revenue per employee – $250 an hour minimum not including agency revenue. This is a contentious KPI. If you think it is not for you, work the numbers back and see what your number needs to be based on each labour hour in the business.
  4. Revenue PSQM $4,500 – $8,500 depending on country vs. city / high street to shopping centre and depending of product mix. Higher GP lower revenue required.
  5. Overall revenue mix percentage targets: Cards: 25%; Gifts/toys/plush: 25%; Stat: 10%; magazines/newspapers: 20%; other: 15%.
  6. FLOORSPACE ALLOCATION: Cards: 25%; Gifts/toys/plush: 25%; Stat: 8%; magazines/newspapers: 15%; other products: 15%; office/back room / counter: 12%. It’s rare you make money from an office or store room.
  7. Mark-up goals: Stationery: 125%; Gifts 110%; plush: 110%.
  8. Occupancy cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation.
  9. Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. (See above).

Mark Fletcher.
Email: mark@towersystems.com.au  Website: www.towersystems.com.au  Blog: www.newsagencyblog.com.au
M | 0418 321 338

Footnote: I founded Tower Systems in 1981. That company now serves in excess of 1,750 newsagents as customers with its newsagency software. In 2005, I joined newsXpress. That newsagency marketing group now serves 243 retail businesses with a traffic and revenue growth strategy.

29 likes
Management tip

Are you missing out on Father’s Day card sales?

When should I put out Father’s Day cards? This is a question that is asked every year and even year my answer is – as soon as you have the stock. The supermarkets have their stock out so why not you.

I don’t care if most Father’s Day related sales are in the last week. Having cards out now, in prime position, shows you as being in that space. Shoppers may remember that when they think it is time to buy.

Our action, or inaction, as a channel will determine how much Father’s day revenue the supermarkets will get compared to newsagents for this season. The battles we wage locally matter in this.

Newsagents should own the Father’s Day season, more so that any other retailer. To achieve we this we need to:

  1. Have cards in prime position, away from the card department.
  2. Regularly promote on Facebook, a card at a time. Choose the quickly cards, those most unusual and that appeal to a demographic that is important to you.
  3. Feature quirky gifts people would not expect to find in your shop.
  4. Run a competition for Father’s Day shoppers.
  5. Pitch a small selection of Father’s Day cards at the counter.
  6. Change everything you do for Father’s Day on a weekly basis, to keep the offer fresh, so people notice it.

Father’s Day is a good season for pitching men’s gifts, a growing gift segment in engaged newsagency and gift businesses. My advice is to look at what you do for the season beyond the season. The rewards are terrific year round in the men;’s gifts space.

10 likes
Greeting Cards

Is this Tatts outlet compliant, would it pass an audit?

I have created a new tab, Tatts compliance, and will post photos here of big business Tatts outlets that may not comply with the standards Tatts demands of you. Email me your photos of non-newsagency Tatts outlets to mark@towersystems.com.au.

I am tired of hearing stories of Tatts using the compliance process as a form of bullying small business retailers when big business outlets get away with what appears to be non-compliant behaviour if they are held to the same standard.

Send me your photos of non-compliant big business Tatts outlets and I will post them here. Send them to mark@towersystems.com.au. One way to confront the harm Tatts audits are doing to small business is to show the competitive advantage Tatts is giving big business competitors.

I’ll blur out people. The photo above from was a Woolworths petrol outlet. Do you think it would pass the compliance audit you are subject to?

19 likes
Lotteries

Newsagents are fighting the battle Tatts should have fought on Lottoland

This story was on 9 News late last week in Queensland.

As a reminder abut how Lottoland operates, here is the story from The Checkout on ABC TV earlier this year:

10 likes
Lotteries

Advice for small business retailers on managing a severe cashflow challenge

Cashflow can get very tight in any small business. How you deal with it is a test of leadership.

The common approach is to hide from those to whom you owe money. That only serves to harm your business and put you under more pressure.

Here is our practical advice on how to deal with a cashflow challenge:

  1. Understand the problem. Know if it is short term or long term. Be certain about the role you have played.
  2. Own the problem. Fixing this is on you.
  3. Develop a plan and document it succinctly:
    1. To borrow if appropriate.
    2. To put more of your own money into the business.
    3. To cut overheads: labour, rent.
    4. To convert more stock to cash.
    5. Work our what free cash you have availabke from your weekly trading.
    6. Ensure all creditors receive payments, no matter h0ow small. Regular payments reflect your commitment to goodwill. They also show you are not playing favourites.
  4. Talk to your creditors, apologise, outline your plan, ask for help.
  5. Act. Every decision, every action you take must work to addressing the cashflow challenge. If you have created a plan(point 3 above) act on it immediately. This is not a time to overthink things.
  6. Invest. If your cashflow challenge is because of a decline in traffic, not spending money chasing traffic will only make the problem worse.

If your cashflow challenge is more serious than a short to medium term plan could resolve it could be that your business is insolvent.

Company directors have a legal obligation to not allow their businesses to trade while insolvent.

Many have been in this situation. You can come out the other side by acting sooner, with commitment and with transparency to your creditors.

11 likes
Management tip

Videos an important marketing tool on Facebook

Videos have come into their own on Facebook with more and more retailers using the medium to show off products in an entertaining way.

To be successful the need to be entertaining, fun and short. They should not come across as a sales pitch.

Don’t overthink them. Shoot them with your phone and get them live. Most social media content is disposable so they are not things you should spent too much time or money on.

2 likes
marketing

Making the most of Melbourne Gift Fair

The Melbourne Gift Fair kicks off today. It is the biggest gift fair in the country and as such can be daunting, especially for people attending for the first time.

If you are in a marketing group, check to see if they have a fair guide. I know newsXpress published to its members a week ago of newsXpress preferred suppliers and information on special deals available.

Here are some tips designed to help you navigate the fair:

  1. If you have time, walk through a whole location before you go back and do buying. While this takes more time it gives you a better overview.
  2. When ordering, be sure you understand the suppliers backorder policy. The last thing you wants stock dripping through when you do not want it.
  3. If a claim is made on success of a product, ask for evidence or reference retailers you can speak with. This is to push back against trade show puffery.
  4. Get a copy of every order you place. If the supplier does not give you a copy on the spot, take a photo of it for yourself.
  5. Focus on products that make your shop more appealing than it currently is. If you buy within the categories you stock today you are doing nothing to broaden the appeal of your business.
  6. Meet up with others at the end of each day to debrief and compare notes.
  7. Be clear on timing. You want stock when it is best for your business rather than when a supplier thinks you should get it.
  8. Target local competitors. Think of a local business you want to win customers from. Plan to achieve this through what you purchase.
  9. Tell a story. Buy enough stock from a brand, range or licence to enable you to tell a story in-store.
  10. Live within your means. Every purchase you make has to be paid for. Do not expect suppliers to become your bank.
  11. Understand competitive placement. Ask which other retailers will get product you particularly like. Some suppliers will put their stock anywhere. I prefer to avoid them.
  12. Have fun. Gift Fair can help you see your business differently. This can be fun.

This Gift Fair should set your business up for new inventory through to early 2018. It is important to attend thinking that far ahead.

9 likes
Newsagency management

ALNA agitates on sports lottery on behalf of newsagents

As the federal government continues to let small business newsagents down with its proposed new sports lottery, ALNA has achieved good media coverage on the topic. Check out these stories from The Australian and the Herald Sun.

The government announced the sport lottery but appears to have not done much since. In the meantime, small business newsagents are left in the dark, again.

5 likes
Lotteries

OfficeMax / Staples in Australia would create tough competition

The ACCC will later this month announce its decision on the proposed acquisition of the Australian OfficeMax business by Platinum Equity, the company that bought the Australian operation of Staples earlier this year.

A complication has been another offer for the business.

Any deal that further concentrates the ownership of B2B stationery sales in Australia is problematic for a newsagency channel that already has challenges with stationery. Indeed I think the prospective merger of the Staples and OfficeMax businesses is something that should have prompted a submission from GNS or even newsagents with big stationery business.

The activity is a reinforcement of how much stationery is in play in Australia. This indicates more disruption ahead for this product category. Disruption can be good if you leverage it to your commercial advantage.

The disruption in this category is not confined to our shores with major activity in the US

Stationery News has more perspective on the Australian moves:

Recent media reports quote “industry sources” who estimate the merger of Staples and OfficeMax would give the group “90 per cent of the B2B market in Australia and New Zealand – 10 times more than nearest rivals COS and Lyreco.”

As Stationery News has stated before, the figure is off-target – a combined Staples/OfficeMax business would have estimated revenues of between $1 billion and $1.2 billion. This compares with an estimated figure of $2 billion for Officeworks (consumer and SME sales) and a combined figure of $500 million plus for dealer groups Office Brands, Office Choice and ASA Australia.

3 likes
Competition

Fewer free newspapers around?

Is it just me or are there fewer free newspapers around now than a couple of years ago? I have noticed at airports in Australia that the stacks of newspapers that used to be out for most of the day have gone. Or am imagining it?

2 likes
Newspapers

Leadership urgently needed from Tatts on the year of mixed messages

Tatts agents are justifiably confused by the changing messages from the organisation over the last year.

The company’s position on fit-out requirements, digital screen requirements, audit standards and more have been changing, with businesses in some locations pressured and penalised while others in other locations are let through for lesser breaches or refusal to act.

The actions of Tatts represent a failure of leadership. Worse, they represent a disregard for small business retail.

I know of plenty who were bullied into undertaking the new fit out and digital platform installation without any business plan put by Tatts. Now, they find out that others who have not done the work yet may have a lower cost for what is to be done.

If I was a retailer who had completed the refit and installed digital screens prior to now I would be contemplating a compensation request. Part of the pitch from Tatts reps, I am told, was there is no getting out of this, everyone will have to do it. It turns out that statement was not true, given the position of Tatts today.

People yet to do the refit and yet to install the digital screen(s) are at a commercial advantage to those who have gone before them.

Tatts need to communicate clearly from the top down and ensure that all within the organisation communicate a consistent message. Localised bullying has to stoop. Localised miscommunication has to stop. Communication needs to be only in writing, for training purposes, of course.

Newsagents meeting with Tatts reps may want to consider openly recording conversations.

Newsagents are at where they are at as a result of poor leadership within Tatts. Shame on the company for the bullying. Shame on the company for the mixed visual images around the country. Shame on the company for the lack of a business plan at the retail outlet level.

Tatts has only itself to blame for this mess.

21 likes
Leadership

Promoting cards on social media

Interactive cards lend themselves to being used on social media to promote range. Where a good card has sound and terrific visuals we shoot a short video to use. The feedback online is good and sales in-store reflect the value of this type of use off social media for promoting cards.

Here is one such short video we have used recently with success.

5 likes
Greeting Cards

Employee theft in a newsagency

I am frustrated hearing about another case of theft by an employee in a newsagency. This theft could have been discovered much sooner had the newsagent used the tools at their disposal, tools that expose theft with irrefutable evidence.

Sadly, this time, like so many others, the newsagent did not think too use the easy to access tools at their disposal, until other evidence was uncovered that caused them to be suspicious.

Make sure you know how you can discover, track and manage theft in your business. To find out how, ask your software company. It should be easy and only accessible too you as the owner.

4 likes
theft

Lotterywest improving relationship with newsagents thanks to new WA Premier

I am grateful for the opportunity attend the lottery forum and luncheon hosted last Friday by ALNA at Crown in Perth.

This was an honest event. I call it that because at its core were presentations from newsagents about the bad experiences with Lotterywest over the last few years. Their heartfelt stories made the situation real.

There was tremendous kudos for ALNA and their considerably work supporting newsagents, lobbying politicians to bring about change and their support of newsagents if what has been a difficult time.

There was equally tremendous support for Mark McGowan, the new Premier of WA – for the swift action his government has taken to deliver on their election promises about driving change at Lotterywest. His speech demonstrated a good understanding of the challenges newsagents had been facing.

I was seated next to the new CEO of Lotterywest. We had a good chat about the challenging situation inherited and the complexities of bringing cultural change to the organisation. Lotterywest has been on a path for the last few years that is now set to change, thanks to the change of government.

I also had a good chat with the Premier about what his government has inherited in WA. His appreciation for small business is encouraging for all WA small business owners.

In his speech, the Premier also spoke specifically about Lottoland and the nature of the product. The newsagents in the room liked what they heard.

Both the Premier and the new CEO of Lotterywest have a commitment to small business and, in particular, family businesses, like newsagents. Newsagent access to them is at a level I have never seen for our channel in the past. And, as I noted above, this is due to the work of ALNA in WA.

The luncheon is a credit to everyone involved. Many newsagents I spoke with told of how relieved they felt now compared to earlier this year when they though all hope was gone. The optimism in the room was wonderful, and exciting.

What has happened in WA is a lesson for newsagents across Australia of what can be achieved by working together relentlessly, with focus, on a issue that decision makers can fix.

I was at the luncheon as my newsagency software company was a sponsor of the event and in support of the many newsXpress members who make up the WA newsagent community.

10 likes
Lotteries

Sunday newsagency management tip: isolate labour by function

Too often I see the mistake of retailers not understanding the real costs of a product category because they to not allocate labour costs to a department, category or supplier.

Do this at a high level and you should be able too understand what you are really making from that product category or supplier.

This is the approach used by newsagents with deliveries years ago when they started selling off their territories. You can use the approach for lotteries or other agency like products and services you offer. However, I’d focus on the big ticket items.

Sure there is a management cost to get to this analysis. Th result is a better understanding of the real value of a product c category and / or supplier.

10 likes
Management tip

Sunday newsagency marketing tip: parties help you find new shoppers

We hosted a shopper party of one of my suburban shops last weekend and achieved more than $2,000 in incremental, good margin, business compared to a usual good Saturday. The party was a terrific success. We are thrilled.

While plenty of customers were local, some travelled and far as two hours to participate in the party.

We spent little on the event and offered only modest discounts. The keys to success were the opportunity for the customers to network with those who share their passion and to see some unique products.

Our marketing was primarily on Facebook. Someone living in Perth called their sibling in Melbourne and told them to come to the party to purchase for them. They did, spending over $100. Based on our conversation, I am sure they will come back.

Simple parties are effective. They are an essential part of the mix to attracting shoppers to the business who otherwise not shop with you.

10 likes
marketing

Great news story about how discount vouchers help drive an excellent outcome

I launched discount vouchers in my newsagency in February 2013. back then, it was the first time anything like this had been tried in the channel. I still use discount vouchers today as they are a profitable part of the retail mix in the business, encouraging shopper loyalty.

Recently, a newsagent talked publicly abut an experience with discount vouchers. I share it here in their words:

Yesterday a customer called and paid for 2 Perfect Petzzz over the phone. Came in today to see if she can pick them up.

I gave her the $18 discount voucher for the 2 Perfect Petzzz, she was delighted and bought 2 Ravensburger and 2 angel flames because of the discount voucher. Of course she got another discount voucher of $8.09 for that, and decided to use the voucher for Harry Potter beanies 😀. Upon receiving another discount voucher of $5.84, she smiled at me and said “I think I better get out of here 😀

Not only do discount vouchers change shopper behaviour, they also alter business owner and staff behaviour. I see this time and again in comments from retailers to me about their voucher experiences. I love the stories of happiness about what is being achieved through such a simple customer loyalty offer.

People understand $$$ moire than they understand points.

With the business owner having complete control over the levers and other business management touch points, it is easy to ensure the vouchers are profitable, easy to have the right encouragements to guide shopper behaviour to serve the business and to reward the shopper at the same time.

I have seen newsagents implement discount vouchers and become more engaged with and happy about their business as a result.

This story above is one example of a retailer who was skeptical who is now loving the outcomes being achieved. It also shows how a an easy and cheap to implement marketing strategy can improve the business. The lead time from deciding to implement to being live is minutes with no capex.

Footnote: The discount voucher facility to which I refer here is from Tower Systems, a software company I own. No other software company in the newsagency channel has the discount voucher facility that Tower has. While anyone can use the term discount vouchers, I know from experience that no two software products are the same in this area. It is actually an interesting comparison point.

11 likes
Newsagency management

Will GNS survive?

This is the question asked of me by newsagents more often so far this year than any other question.

Will GNS survive?

I am asked by newsagents who calls or email me with whom I have no relationship. I am asked by Tower Systems software users at user meetings and other placed where we meet. I am asked by newsXpress members at our regional member meetings. I am asked by suppliers too.

I never prompt for the question.

My answer is:

I don’t know. The business appears to havre not kept up with today’s business requirements. It may have left it too late too transition from a high labour cost wholesale model that is not relevant today. So, I don’t know the GNS future. I have no inside knowledge, no knowledge of their plans. All I know is what I see.

People who ask me the question often do so with complaints including some or all of these:

  1. Out of stocks make GNS an unreliable supplier.
  2. Their prices are too high.
  3. They are restrictive in what they carry from brands.
  4. Delivery is taking too long.
  5. Stationery is down and GNS is not as important to me as they used to be.

I’d hate to own and run a stationery wholesale business today. There is no upside with suppliers going direct (as they should) and with online accounting for far more stationery purchases than the old-school stationery wholesaler infrastructure anticipated.

Today, a pure online play fulfilling orders from a low-cost regional DC with minimal staff is the way to go. However, once the Amazon DCs are established expect a further challenge to stationery sales in newsagencies.

GNS exists in a rapidly changing space, as do newsagents. To me, the question act whether GNS will survive is also a question of whether stationery in newsagency businesses will survive. It is easy to look at the other person and question their future than look into your business and ask this of yourself or at least of part of your business.

The question is interesting to me more for the broader business questions it poses. We need to contemplate the product mix in our businesses. This has to be done on an individual basis and not at a shingle level as now more than ever our businesses are individual and not a channel or network.

What I will say is that the challenges GNS faces today were there ten, even fifteen, years ago. The board back then failed to act, they failed to see the changes on which they needed to focus GNS resources. The same can be said for newsagents when it comes to stationery.

13 likes
Newsagency challenges

Managing labour costs for profit in your newsagency

In my previous overall business benchmark advice I provided this guidance on your target labour cost benchmark:

  1. Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business.

What this means is: if your revenue, where revenue is product revenue plus commission from agency lines, is $1 million, your total labour cost should be $110,000.

Labour cost needs to include fair market value for owner labour invested in the business.

Too often, I see newsagency business owners putting in anywhere between 60 and 80 hours a week with the majority of this time unproductive.

A small business cannot afford unproductive management time. Your big business competitors do not have this overhead, nor should you.

This is why I suggest you have no back office or, if absolutely necessary, a small back office that is not comfortable.

There is an added benefit of no or a small uncomfortable back office – you migrate pricing and other work to the shop floor. Do this and revenue will increase.

While many go into business to be the boss and not at the front line serving customers, the front line is where the business makes money. It is where you ought have your best people.

Allocate your boss time to fit with the size of the business. In a typical small retail business turning over $2M a year or less, I suggest boss time should be no more than five hours a week. This, of course, depends on what you do with the time. If you do bookkeeping, saving the cost of an external resource, it could be more.

A more practical way to look at this is issue of labour cost: cutting three hours paid adult time a day, Monday to Friday, will add more than $20,000 a year directly to the bottom line profitability of the business.

If you think this is not possible, look at where you do your boss work. Some of this could be done at the counter or on the shop floor. You could multi-task and thereby cut paid hours. It all depends on whether you want the business to be more profitable.

One newsagent following my advice on this cut labour costs in the business by $50,000. In the same period, revenue was up 6%.

Getting your labour cost under control and within the benchmark starts with your roster.

23 likes
Management tip
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