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This
Old Business
by: Michael S. Winicki
Not long ago
I was asked to come out and take a look at a business that had been around
for about 10 years... but the owner was frustrated with the amount of
money he was making.
Here is the
story of a natural food retail store located in New York State.
The business
itself is located in western New York State, within a small village. It
sits upon one of the “main drags” going through the village and probably
sees as much car & foot traffic as any other business in the limited
“downtown” area.
I’m going to
approach this as an “outside-inside” project. In other words, I’m going to
look at the outside of the business first… and see how we can
improve/market that better and then we’ll go inside for a review of that
part of the business.
Outside:
Quite frankly the village this business is located in is in tough shape.
It consists of quite a few buildings that need some exterior help such as
painting and what not. The facade for this business is for the most part
is good, except for a couple areas that I’ll touch upon shortly.
The big
problem I have with the front of the building is the color white. While
the color white is good for a great many applications, I think for a
retail storefront that is trying to attract attention it’s just plain
boring. And since many of the buildings in the village are also white this
causes the business to lose some of its identity.
What would I
do? Probably paint it a variety of bright colors… yellows, reds, oranges.
Colors that are bright and livid, colors that stand out. Colors that make
the building jump to attention and make it noticeable to anyone travelling
down the street. The building needs to be bold and the color white doesn’t
cut it. Right now it looks just like any tired, boring storefront in “any
village” USA. The whole building does not have to be repainted, just the
front portion that is going to catch the eye. This will save on costs.
Secondly the
concrete steps need to be patched up. This isn’t an expensive or time
consuming project either but it can improve the appearance AND PERCEPTION
of the business 100%. And remember perception is everything.
The front
sign could be done in brighter colors also but I’m more concerned with the
facade and concrete work at this point.
The last
thing that needs be done from an “outside-in” perspective is to change,
redo or eliminate all the signage hanging or taped on the front doors and
windows. Many of the present signs are “dog-eared”, “yellowed” or
“sun-bleached”. These signs don’t present a good image as the customer
enters the building. Paper signs need to be replaced on a regular basis in
order to keep the entryway from looking anything other than “clean”,
“organized” and while I hate the word, it fits in this circumstance?
“professional”.
Let me put
this important point across to you right now. The profits generated by the
business are tied to the prices you charge. Duh--right! But you see in
order to charge higher prices a business has to have a certain look or
meet certain expectations in the customer’s mind. Remember a business that
is well maintained, well run and well organized can still discount
products and have sales. But a business that is not well maintained, well
run and well organized can not ever hope to get higher prices? you see the
perception of the business just doesn’t allow it to charge more.
Inside: The
thing I noticed after I first stepped into the building was the
“inconsistency”. What I mean by this is that we have old building with old
style walls with a drop ceiling and a tile floor. While I’m not
recommending major construction I think there are a couple things that can
be done to make the business look more “uniform” and “consistent”.
Let’s talk
about the walls first. Since we’re not in a position to redo the floor and
remove the drop ceiling let’s cover up the walls. With what you may ask?
What about putting up pictures of East Otto and the surrounding areas? Put
up photos of old buildings and of people that have lived in the area. This
will help give the business a “theme”, which it really doesn’t have at
this point? and it’s a theme that ties itself to the community.
Now the
ceiling, the ceiling tiles need to be desperately replaced and/or painted.
These tiles aren’t expensive and sections of the ceiling could be replaced
over time.
The floor…
what the floor needs is to be stripped and waxed. And it should be waxed
on a regular basis. I know of no other thing that can improve the overall
look of a business more so than keeping the floor looking great. This
isn’t expensive to do the results would be incredible.
Like I said
previously if the overall perception of the store is one of being well
maintained, well organized and well run then the store will not only see
more business but profits will increase because it (the store) can charge
more to fit it’s new image.
Inventory
needs to be increased… not by thousands of dollars but in a couple
important areas. First the whole “low-carb” thing that is sweeping the
nation is a golden nugget of profit that “Naturally Your” is virtually
ignoring. I would invest a few hundred dollars into this category as soon
as possible. And then I would advertise the stink out of it.
Secondly,
gluten free and sugar free products are selling big nationally and these
two categories should have a prominent place in the building.
One point
when it comes to inventory? do it monthly. If all the products were
entered into a computer as were received in the store and then checked off
as sold, inventory would not take very long to do. This would help find
areas of concern as they apply to both store security and inventory
“turns”, which is a measure of profitability.
The
temperature of the store seemed a bit too low for me. While I respect the
need to monitor utility costs this is an area where customers notice
big-time and I think the impression it gives is one of being cut-rate
rather than first class. I think it probably does not foster a pleasant
work environment for everyone either… I mean who really wants to be cold
while they work? If you’re concerned about costs don’t be. Everything I’m
suggesting is geared towards improving sales and profits of the business.
You neglect to do any of them and in my opinion your store’s ultimate sale
and profit potential will take a hit.
The signage
thing I talked about in the entrance-way is prevalent throughout the
building--too many old, battered signs that make the place look un kept.
Every month or so the signs should be redone on the computer because they
do degrade quickly.
Let’s talk
about personnel or more specifically their appearance. I greatly suggest
that a standard shirt or smock be adopted by management and worn by all
staff at all times. Why I suggest this is that it promotes consistency
plus it does give the wearer a little pride because they are wearing a
“uniform”. Consumers are always more receptive and respectful to people in
a uniform. Call it psychological or call it crap but it does work that’s
why the chain and franchise businesses require them. It’s not because they
want to spend the money but because it helps them make money.
Obviously the
layout of the store needs to be changed as quickly as possible so
customers don’t have to go through the office area in order to reach other
parts of the building. I realize that it is going to take time and money
and it’s something already in the works.
I would also
have some kind of music playing in the store, pick whatever type you want
but music is usually beneficial for both employees and customers.
I would think
a “Policies and Procedures” manual would greatly benefit this business.
Not only will it cause tasks to be done uniformly and consistently it will
greatly relieve the burden put on both the staff and the owner for
training new employees. Not that new employees don’t need training because
the do but verbal training is inconsistent training. The same, exact set
of instructions are rarely given twice in a row. Verbal instructions are
not geared to creating consistent service to customers and consistent
operations throughout the store. High points should be touch verbally but
every task that is done in that business should be written down in a
simple step by step format and then arranged in a notebook.
Each new
employee that is hired by the business is given one of these notebooks.
Inside the notebook would also be the employment guidelines of the
business.
Employees
that aren’t trained in a professional manner and don’t work in a
professional environment tend not to act professional about their
position, towards the customers and towards each other. Does that make
sense? It should because while it may be painful to acknowledge it is the
truth. Even minimum wage employees need to be treated professionally,
trained professionally and work in a professional environment. Do you want
to see moral go up? Productivity increases? Theft goes down? Then
implement these changes immediately.
Will you
still get some “bad apples”? Of course, it’s unavoidable but it will allow
you to turn some of these folks on the edge into good employees.
The easiest
way I know of in creating a “Policies & Procedure’s” manual is to take
one task every week and do a procedure’s sheet on that task. List each
step of the task… you know “Step 1-Do this first”, “Step 2-Do this next”,
“Step 3-Then do this”. Before you know it you’ll have a complete manual
that can be photocopied and handed to each new employee. You can’t imagine
how much easier a “Policies and Procedure’s” manual will make a business
owner’s life.
Now let’s
talk advertising. I think the easiest and cheapest way to advertise this
business is to use simple and low-cost classified ads. Every week an ad
should be run in some newspaper or penny-saver within the trading zone of
the store. And these ads shouldn’t be some generic “Shop at Naturally Yours” type ad. Instead advertise one product at an aggressive price OR
advertise a unique part of your store, like “Lo-carb” products or “Gluten
free” products or “Videos for rent” or something similar. Remember
advertise something specific! Generalities don’t sell--specifics do!
In conclusion
I think there is a lot you can do to improve the profitability of your
business right now and without spending a fortune. Now is the time to get
started.
Michael
S. Winicki, publisher of “Mike Winicki’s Small Business World”,
and the co-owner of www.AdsThatSuck.com ,
the first internet site that compares how BAD advertising can be and how
to make it better.
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