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Author: Phil Wrzesinski

Could an Accounting Class Help?

On my website I readily admit that although I can help you in almost every aspect of retailing, if understanding your financials is your weak spot I’m not your guy. So you can imagine how I’ve been over the last few weeks.

Our accounting software finally bit the bullet. We’ve been using the same software since 1998, even though the software became obsolete in 2005 and the company disappeared in 2006. Hey, if it ain’t broke, why fix it? But the software wouldn’t allow dates beyond 12/31/10. Time to make the change. I spent December 27th and 28th with my accountants updating everything to the new software.

Our fiscal year is about to end. More meetings with the accountants are on the horizon.

While my accountants are absolutely nice and wonderful people, why must they insist on speaking in a foreign language? I still struggle to remember if I add debits and subtract credits or is it the other way around?

Most independent retailers I know have the same struggles. Reading financial statements like the Balance Sheet and Profit/Loss is like reading a Chinese road sign. But in my quest to always improve myself, I have made it my goal to grow my understanding of all things accounting in the retail world (with the exception of taxes – I’ll tackle that next year).

I could take an accounting course, but all my friends who have done this warn me that it is backwards. Bank accounting – on which these courses are founded – is opposite of retail accounting. Huh? How stupid is that?

So instead I’m going to learn it the way most entrepreneurs do – self-taught one chunk at a time. And, yeah I plan to share what I learn right here. So look for a little more on the financial side of retail this year. Together, we’ll both become experts.

You with me?

-Phil

PS Credits are added, Debits are subtracted (I think)

New Free eBook on Merchandising

Three straight posts on merchandising? Are you kidding?

Nope. But this one is a good one.

  • Six tips about merchandising every retailer should know.
  • The pros and cons of Branded sections within your store.
  • Military versus Whimsical – How to design your store layout.
  • The Most Important Four Feet of merchandise
  • How often you should change your displays

All of that and more is in my new eBook, Merchandising Made Easy. The download is FREE, the information is priceless.

-Phil

PS Check out all the other great Freebies, too!

Signs Really Do Sell Your Stuff Better

Yesterday I worked with my staff on signage. Rick Segal has repeatedly said that signs on a display help sell that merchandise 43% better than a display without signs.

I talked about the first reason why in an earlier post.

Here’s another reason to consider… Value

Perceived Worth
When a customer enters your store, the first thing she is doing is putting a mental price on every item she sees. I call this the Perceived Worth (PW) – what it is worth to her.

If she doesn’t need the item, the PW is zero. If she does need it, she assigns it a PW and then checks the price. If the price is much higher than her PW, then she won’t buy it. Likewise, if the price is much lower, she still won’t buy it. At least not until she figures out why it is so cheap.

Value Equation*
The Value Equation here is when the Actual Price equals the Perceived Worth. When they match, the sale is made.

That’s where signs come in. They raise the PW of the products they are on.

Most customers are generally ignorant of all the features and benefits of the vast majority of your products. If they only knew how cool or beneficial the item was, the more they would think it is worth. And there are only a handful of ways for them to find out.

  • Look it up on the Internet (and possibly buy it there, too).
  • Ask an employee (which the other post explains why most men won’t do that, and half the women aren’t too eager to do that, either)
  • Read the package (which often requires touching the box, something they might not be committed enough to do)
  • Read the sign next to the package (which they will often do without a second thought)

Signs Bring Action
Signs take less of a commitment on the part of the customer, so they are more willing to read them than the package itself. A well-written sign gets them to commit a little more and compels them to pick up the item with a higher PW already in their mind.

Well-placed and well-written signs can make a huge difference in your sales. Just remember these three tips for crafting your sign.

  1. Answer the most frequently asked questions. The goal of the sign is twofold – raise the PW and get them to pick up the item. Answer whatever question a customer might have that would accomplish either or both of these goals.
  2. Make it about the Benefits. Why should the customer give this product another look?
  3. Handwritten signs are okay for temporary use, but more permanent signs should be Professionally printed.

You can quickly and easily increase your sales, move out slower merchandise, and make higher margins with the simple and proper use of signs.

-Phil

*PS For a complete explanation of how the Value Equation works, check out the FREE eBook Pricing for Profit.

Plotting the Course and Raising the Bar

We all do this. Plot our course for the next year. We are all busy making Sales Projections, Expense Budgets, and Marketing Plans.

But have you done a Training Plan?

Raising the Bar
Have you worked on a list of skills you want to teach or improve in your staff? Have you made a list of strengths and weaknesses for each individual and your store as a whole? Have you chosen a topic where you wish to raise the bar in your customer service this year and then plotted a course for training the staff to that new level?

One mistake I used to make was to think that just by telling the staff where I wanted them to improve, they would figure out how to do it. Big whoops!

You need to not only identify where to improve but also figure out how to train to that new level.

One Topic per Quarter
It takes time for your staff to grasp new concepts. It takes time for them to learn something new and be able to implement it in their daily routine.

Therefore, I always pick just one topic each quarter on which to focus. Then I plan all my trainings during that quarter on teaching the staff more about that topic. If we are successful in raising the bar then I will pick a new topic for the next quarter and plan all those trainings around that topic. If not, I go back to the drawing board and find new ways to teach the first topic.

For instance, last year we focused much of the year on Communication – communication between employee & customer, communication between employee & employee, communication between employee & me. Yeah, it was a big topic and took up most of the year. And we made great strides in raising the bar on the first two. (But unfortunately not the last point. Somewhere I failed. If the staff doesn’t learn, it is never their fault, always the fault of the teacher. So I’ll figure out something new and keep working on that point this year.)

Moving Forward
The focus at the beginning of this year will be on improving our merchandising skills. I could just tell the staff to do better, but nothing much will change. Instead, we will be working each month on a new skill such as how to use signage (who it is for, what it should say), building attractive endcaps, thinking like a customer.

My goal is to eventually empower the staff to recognize the difference between a customer-friendly display and a stocker-friendly display and know that they have the authority to make changes as necessary to keep the store fresh and exciting and move more merchandise.

But without a Training Plan, this doesn’t get accomplished.

Training Plan Made Easy
Sound like too much? Make it simple on yourself.

  • Write down a list of your staff’s overall strengths and weaknesses.
  • Pick two items on that weakness list and prioritize them.
  • Teach something on that highest priority until the staff gets it. Then move on.

You’re the leader. So go lead the staff exactly where you want them to go.

-Phil

PS Need help planning your meetings/trainings? Here is a FREE eBook on how to do that easily and effectively. (Don’t forget to download the worksheet too – but read the eBook first!)

Managers in Training

If you could send your manager (or yourself) away for training, what topics would you want him or her to learn?

Some of the topics might include:

  • Hiring
  • Staff Training
  • Time Management
  • Scheduling
  • Advertising & Marketing
  • Website development
  • Sales
  • Buying
  • Inventory Management
  • Bookkeeping
  • Reading Financial Statements
  • Merchandising

What are your top three or four? What would you add to that list?

-Phil

PS I had a request from someone who wanted to apprentice with me which got me thinking… What would I teach? What would they want to learn? Yeah, the second question is the key, isn’t it?

What Difference Did You Make?

Sometimes we forget the impact we have. And this time I’m not talking about the social impact of the products we sell. I’m talking about money. Pure cold hard cash.

Do me a favor… Go read this article .
I’ll wait…

Think about the billions of dollars of economic impact that one company has had on the world.

Now think about your own.

There have been studies that say a dollar spent in a local independent retailer circulates seven times through the community. Some have put it as high as fourteen times. Others question if seven is too high. But none dispute the facts that the money spent in your store goes around the community more than once.

So let’s use lucky number 7. Take your gross sales for the year and multiply it times 7.

That is the impact you had on your local economy.

That money allowed families in your town to keep their homes, feed themselves, and buy clothes. That money sent kids to college so they could learn to solve future problems. That money plowed the snow on your streets, sent firemen to rescue old Mrs. Hodges, and helped the police make the biggest drug bust in a decade.

That money maintained the park where your kids play, helped your dentist buy a better, safer x-ray machine. That money kept two kids out of jail because they got an allowance from their employed parents.

Sometimes when you look at your business, good or bad, you wonder what it’s all worth. As you reflect on 2010 know this… it’s worth more than you originally thought!

Happy New Year !

-Phil

The Sincerity of Taking Risks

The earflaps of his hat were flipped down for the cold. His fingerless gloves seemed appropriate. He was holding a guitar after all.

“Can I play a song for you?”

If he had been on a street corner, my mom would have thought “panhandler” and walked on by. But here he was standing at her front door with a guitar and a satchel full of CD’s.

“Can I play a song for you?

“I’ve produced a CD and I’m selling them door-to-door. I’d like to play a song for you if I can. Your sheriff neighbor liked it and bought a CD.”

In today’s world of instant connections to thousands of people through Facebook, Twitter, and Email he was going door-to-door to make his CD sales for Christmas. Ten dollars per CD, one door at a time.

Was it efficient? Probably not. One song per door, plus walking, plus explanation, plus rejection meant a lot of time invested for a small amount of sales.

Was it risky? Sure. He put his reputation on the line with every strum of the guitar. He had to face the rejections head on. He had to brave the elements, too.

Was it sincere? As sincere as it gets. One man, one guitar, willing to put his reputation and self-esteem on the line for you just to get a $10 sale.

Did it work? Mom only had a $20 bill. She gave one CD to me, one to my uncle.

Sometimes sincerity and risk outweigh efficiency. If he hadn’t taken such a risk, I never would have heard his CD… …and it’s pretty good.

What are you willing to risk?

-Phil

PS The artist in this story is Rob Vischer. Check him out.

Merry Christmas!

Merry Christmas to you and your family. May you find joy in the day no matter how you celebrate it or spend it.

As a toy store owner, this is one joke that always brought a chuckle during the season…

The winter break was over and all the kids were back in school. The teacher asked them to raise their hands and share how they celebrated Christmas. Every hand immediately shot to the ceiling.

One by one the teacher called on each child, except for Jacob sitting in the back row. She knew his family was Jewish and did not celebrate Christmas. But still he sat there with his hand enthusiastically waving in the air.

Finally, she could no longer put it off. “Jacob, how did your family celebrate Christmas?”

Jacob said, “Well, our family owns a toy store so on Christmas Eve we counted the money and sang, ‘What a Friend We Have in Jesus’.”

May you all have plenty of money to count tonight and in the weeks and months to come. And may you have blessings upon blessings on your family and your business.

Merry Christmas,
-Phil

Head Cheerleader

Five shopping days until Christmas. In the home stretch. You’re tired, run down and stressed, just counting the days. Your friends and family are encouraging you to “Hang in there, it’s almost over.”

Sorry to burst your bubble, but you need to do more than just hang in there.

Of the hundreds (thousands) of customers who come through your door this week, many are entering your store for the first time.

Now is the time to WOW them so they become lifelong customers.

So no matter how tired you and your staff are feeling, no matter how many hours you’ve worked, how many sleepless nights you’ve had fretting about the business, you have to find that reserve inside you that makes this week the most special experience your customers have ever had!

And you need to fire up the staff, too. Your new role for the next 5 days is Head Cheerleader. Here are three things you can do to keep your staff going strong until the end.

  • Praise them. Tell them specific things you have seen them do right in the last few days. Share their praise with everyone.
  • Cater lunch. Not just some sandwiches and chips but a real sit-down meal with silverware.
  • Hire a masseuse. Give the staff 20-minute breaks to get table massages.

These next few days are not only critical to your holiday sales, they are critical to your future because you never get a second chance to make a first impression. Get your store ready, get your staff ready and get busy!

You can do it. Rah rah rah, Sis boom bah!! I’m pulling for you!

-Phil

An Excerpt from Hiring and the Potter’s Wheel

Another excerpt from the highly acclaimed book “Hiring and the Potter’s Wheel: Turning Your Staff Into a Work of Art”

Chapter 12: Lessons 4, 5 and 6 Centering, Gentleness & Protection
“Kind words can be short and easy to speak but their echoes are truly endless.” – Mother Teresa

“So, how did the conference go?” Mary began.

“Quite ordinary, a bunch of theories using fifty cent words, but nothing that hasn’t already been explored or learned,” Dr. Scott explained. “I’d have rather been in your pottery class. How about you? How was class? Having fun? Learn anything new?”

Mary almost didn’t know where to begin. “The pottery is great. I love it. I think I may have found a new hobby. I can’t thank you enough. And as for business, since we last met, I have learned three distinct lessons.” Mary pulled out some notes she had been taking.

“First, before I can start throwing, I mean training, I have to make sure everyone is centered, that they are starting from the same point. Everyone has to be on the same page. That pretty much goes hand in hand with the earlier lesson of getting out the impurities, the air bubbles. I’ve already developed a clear set of guidelines and expectations, and also a list of bad habits to watch for and weed out, if necessary. But no matter what their previous experience, everyone will start from the same point in their training. That way I’ll be sure not leave anything out.

“Second, once the throwing, oops, I mean training, begins, I have to remember to use a gentle hand, lots of positive encouragement. There’s the old saying, ‘you get more flies with honey than with vinegar.’ The same is true in teaching. The more positive gentle words, the more likely the student will listen and learn.

“That was tough for me, I mean in the pottery. I kept pushing too hard and watching my bowl flop over like it was sick. It reminded me of how I feel when someone yells at me or pushes too hard. Patience and gentleness are definitely the keys. I wrote myself a sticky note on top of my computer to remind me to praise everything done right during the training to help encourage that behavior.

“But wait, as I think about it, you were never gentle with me, Dr. Scott. You always pushed me hard. You and your, ‘you can do better,’ mantra,” Mary added with a slight sarcastic twinge.

“But did I ever push you too hard?”

“No, I guess not,” Mary replied wistfully.

“You’re absolutely right on this, Mary,” Dr. Scott continued. “Pushing too hard never works. But you have to find the right pressure to get the most out of your clay, and your trainee. If you don’t push at all, nothing gets formed.

“I think you’re getting it. Now what about that third lesson?”

“Well, last night it dawned on me as I placed my bowl in the rack to safely dry, how often do we put newly trained employees into safe positions? Usually, once training is done we throw them to the wolves, so to speak. But wouldn’t it be better if we put them in a safe environment to try out their new skills? If they were in limited roles or carefully supervised, they could safely practice their skills and grow stronger. We know, no matter how well they train, they are going to make mistakes. But this way they can make mistakes under a watchful eye and learn from those mistakes before the errors become costly. That way they’ll be even better when they finally take on their new roles.”

“Kind of how your clay is growing stronger as it hardens?” Dr. Scott asked.

“Exactly!” Mary exclaimed. “Once the training is complete, I’m going to come up with a safe way for my new sales reps to use their skills. But Peter said something curious just as we left. He mentioned that our bowls, although hard, would be quite fragile once dried. I think I’ve got a little more to learn about this step and the steps following.

Mary looked at her watch, “Well, I’ve got to run. Oh, and I’ve got interviews scheduled all next week. Can we meet the following Tuesday?”

“Sure. You know I don’t like to miss any meals,” Dr. Scott said with a chuckle. “See you then.”

Get a copy of this book for everyone on your Christmas List who hires and trains. There is still time to get your order in before Christmas (and I promise to sign every copy.)

Merry Christmas!
-Phil