In my work with newsxpress I prepared and shared this cashflow management advice. I share it here to offer an example one type of business advice (of many) provided by newsXpress and for the advice itself.

CASHFLOW ADVICE FOR YOUR CONSIDERATION. 

In it’s simplest form, cashflow management is about ensuring a business has the cash necessary to meet its obligations and, hopefully, build reserves for the owners.

Good cashflow management starts with the understanding that this is your business. You sign the lease. You sign up for any loans. You hire, train, motivate, manage and, maybe, fire the staff. You choose what you sell. You set your prices for most of what you sell. You control how the shop looks. You manage the promotion of the business outside the business. Yes, this is your business.

The cashflow of the business is a product of your choices.

It is critical for every business owner to own their business cashflow performance. Blaming others or external factors is a cop out. harsh as it is, that’s the truth.

MANAGING CASHFLOW.

This list is ordered by priority.

1. Budget. Have one. Until you do, do nothing. This is priority #1. The budget should include an inventory spend allowance, so you know what you can spend. Plan the budget for the business to be profitable / viable without the need for agency to support it. Business budgeting should involve provision to grow savings / emergency funds without having to borrow / lifestyle choices / exit strategy if you cannot sell the business.
2. Funding. Before you borrow from any source, get advice as to the appropriateness of this funding. Too often we see expensive, unsecured, loans taken out at ridiculous interest, to the significant cost and harm to the business.
3. Shop lease. Only sign a lease you are happy with. Be prepared to walk away at the end of the current lease if the new one offered is not good. Run your business through the life of the lease as if you will not take up a new lease in the same location.
4. Labour costs. Run a lean roster. $25.00 a day saved in labour costs is like $50 to $75 in retail sales. That is, $15,600 to $23,400 in revenue for a six day week over a year.
   1. Ensure every team member has a role description.
   2. Set business performance targets:daily revenue / revenue per labour hour or similar. It is critical everyone working in the business understands the goals and that they support them.
5. Price for margin. Understand retail price psychology. For example, $13.50 is seen to be the same as $14.99. So, price at $14.99. By pricing to a higher price point you can discount back or fund a loyalty program that discounts for loyalty. Also, choose .99 over .90 or .95.
6. Loyalty. Run a loyalty program that focusses on people shopping more often with you. Be consistent in your pitch. Do not waver over the offer. It rewards loyalty, not laziness. The focus on loyalty needs to be whole of business, whole of team in pitch and management.
7. LayBy. Stop it. Instead, offer Oxipay, ZipPay or AfterPay.
8. Basket depth. Maximise every touchpoint.
   1. Counter. Always have multiple offers at your counter, offers that are easily purchased on impulse, offers that deepen the basket and make a shopper visit more efficient for you.
   2. Top selling items. Look at what is on either side. Make sure the products are relevant and easily purchased with the popular item.
   3. Exit pitch. Make sure you have a compelling and regularly changed pitch to shoppers as they leave the business.
9. Inventory.
   1. You control your buying. Not a rep of a supplier ordering on your behalf.
   2. A full shop is not necessarily a good shop. A smart shop is better. This is, one that people love to browse, love to shop. Often in retail less is more.
   3. Consider establishing a buying approval process where more than one person participates in buying decision. The goal is to slow impulse purchases. This could be someone outside the business.
   4. If you doubt your ability ton pay, don’t buy.
   5. Move, move and move. Every day there should be movement of products in the sore to keep it feeling fresh.
   6. If products don’t work, quit them as they are worthless if you put them in storage for later.
   7. Work with suppliers, exploring delayed terms or consignment opportunities.

DEALING WITH A CASHFLOW CRISIS.

A cashflow crisis is when you can’t pay your bills on time or a sustained period of dissatisfaction with the cash reserves in the business.Too often, small business retailers ignore a cashflow crisis, leaving action until it is too late.

Here is our advice on how to deal with a cashflow crisis.

1. Own the problem. Fixing this is on you.
2. Bring in outside help. This could be a friend, a financial counsellor. The best person will be someone who understands your type of business who can help you see what you don’t see and support you in tough decisions to be made.
3. Understand the problem. Know if it is short term or long term. Be certain about the role you have played.
4. If you run customer accounts, collect with urgency.
5. Ask the landlord for immediate rent relief. The more transparent you are with them the better. Document your case. Be prepared to show your P&L in support of your request.
6. Cut your roster to bare bones.
7. If you have stock on sale or return and it is not selling, return for credit.
8. Immediately start a sale.
   1. Give it a cool, non scary, name.
   2. Price items to sell, especially items for which you have already paid. Even selling below cost frees cash to the business.
   3. Get everything on the shop floor.
   4. Display to clear. i.e. not pretty displays for sale items.
9. For inventory that you cannot sell, consider eBay.
10. Consider selling assets. If you have equipment in the business that you no longer use, sell it.
11. Talk to all your creditors, apologise, outline your plan, ask for help.
12. When making progress payments on creditors, respect all with payments. NOTE: small regular payments could be key to you not facing debt collection action.
13. Act.Every decision, every action you take must work to addressing the cashflow challenge. If you have created a plan act on it immediately. This is not a time to overthink things.
14. Invest.If your cashflow challenge is because of a decline in traffic, not spending money chasing traffic will only make the problem worse. Spend carefully.
15. Plan for the end point. This will be either coming out on top or closing the business.

The cashflow achieved by a business is a product of your decisions. Be thoughtful in each decision and single-minded in your focus on a better cashflow outcome.

Thanks for reading. We hope 2019 is awesome for you.

Mark Fletcher
Managing Director
Tower Systems International (Aust.) Pty Ltd
E | mark@newsxpress.com.au.

Tatts appears to be demanding retailers adhere to employee terms that are not required by FairWork. I have seen them do this either not back down or take months to back down even after being shown that their demands on the retailer are considerably beyond the scope of the legal obligation of the newsagent employer.

The situation has come about because of the legislation the parliament passed following the 7-Eleven employee scandal. It was designed to protect employees in franchisees. As the Tatts / retailer falls under the definition of a franchise, Tatts has certain rights /. obligations under the legislation.

I would argue that Tatts has been overs jealous in actions of which I am aware and that they have issued formal breach like notices for matters that have no support in FairWork mandated obligations for employers.

The result is considerable stress for retailers, plus costs in dealing with what Tatts puts them through.

To avoid being caught in a Tatts created and managed stressful situation:

1. Ensure you pay everyone according to the award.
2. Provide a complete payslip for every pay period, preferably directly out of a reputable accounting program.
3. Pay on time.
4. Have written time sheets.
5. Do not pay employees in cash.
6. Have your processes and records checked by your accountant or some other appropriately skilled person at least once a year.
7. Treat family member employees as you would any employee.

A challenge with the Tatts approach is they will ask employees to complete a survey. One wrong answer to a misunderstood question could result in Tatts coming for you. This is why you need to be certain of your processes and be able to defend your position based on documentary evidence.

As I have written previously, the situation has come about because of the federal government passing vulnerable employee legislation following the 7-Eleven debacle. The Fair Work Ombudsman website sets the scene:

On 15 September 2017 the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 took effect. It makes the following changes to the Fair Work Act 2009 (the Fair Work Act):

• increase penalties for ‘serious contraventions’ of workplace laws

• make it clear that employers can’t ask for ‘cashback’ from employees or prospective employees

• increase penalties for breaches of record-keeping and pay slip obligations

• employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove wage claims made in a court (this is also referred to as a reverse onus of proof)

• strengthen our powers to collect evidence in investigations

• introduce new penalties for giving us false or misleading information, or hindering or obstructing our investigations.

Read what the Fair Work Ombudsman website has to say about franchisors that have a significant amount of influence or control over the business affairs of the franchisee:

These changes apply from 27 October 2017.

Franchisors and holding companies (a company that has control over subsidiary companies) can be held responsible if their franchisee or subsidiary doesn’t follow workplace laws about minimum entitlements, the National Employment Standards, awards, sham contracting, record-keeping and pay slips.

This will apply to franchisors that have a significant amount of influence or control over the business affairs of the franchisee.

Franchisors or holding companies could be liable for breaches or underpayments if:

• they knew (or could have reasonably known) that a franchisee or subsidiary wasn’t following workplace laws
• they didn’t take reasonable steps to prevent it.

We are working with franchisors, their advocate and advisers and will have more information in our Help for franchises section when the changes take effect.

Tatts is acting because of an understanding of that term – significant amount of influence or control over the business affairs of the franchisee.

I think  that in terms of tatts, they do have significant amount of influence or control over the business affairs of the franchisee.

There is plenty of advice online outlining the obligations for franchisors and organisations like Tatts outlets.

Marie Kondo’s show on Netflix has spiked interest in decluttering. Applying her principles in business makes sense, especially in a visually and spatially busy business like a newsagency, even a former newsagency that identifies as something else today.

I especially like some of Marie’s mantras and their application to newsagencies such as Nostalgia is not your friend. I often see newsagents hang on to things because of nostalgia or do things because it what they have always done.

Part of decluttering in business is about doing what is right for the business, what moves the business forward, what makes the business more valuable the it comes time to sell.

Only you can work this out for your business. There are plenty who will try and tell you what to do and plenty of them are not newsagents. Listen to yourself.

Work out your own approach to decluttering the shop and the business. If you are not sure where to start, choose a category and focus on that. Or, choose a location, like the counter. Be single- minded in your focus on that. make a new experience, a new counter that focuses on the new view of the business: lean, efficient, happy, forward leaning.

A key rule Kondo applies is to keep things around you that spark joy. It would be interesting to contemplate what you keep in your business is that is your focus. Even considering this only from a product perspective. What products in your shop today spark joy? What would your business look like if you removed products that do not spark joy for you?

I am not writing this telling you what to do. Rather, I am posing questions so you can determine for yourself any changes you wish to make in your business. I have worked through this and found the results most interesting.

Decluttering is really about clearing a path forward, removing things, clutter, in the way of steps you can take. If you start with the counter and consider everything at and on the counter. If you apply Kondo’s principles you should end up with a very different counter for those who work in the business and those who shop with you.

The Prime Minister has announced plans today to seek parliamentary approval for an expansion of the instant asset write opportunity for small business – extending it to June 2020 and increasing the invoice cap from $20,000 to $25,000.

This is a good move for businesses engaged in capital investment in their businesses.