Business 101

The Metric That Will Predict Your Company's Fortunes

On the face of it, Starbucks hit a home run when it released its fourth quarter earnings in early November. The coffee shop chain had strong earnings on the back of $21 billion of revenues for the full fiscal year. And it continued to perform exceptionally well on mobile payment systems — one quarter of its U.S. transactions are paid through its smartphone apps.

Still, as hugely impressive as these results are, Starbucks has a lot to learn about acquiring and keeping online customers.

Shop Talk: Practical answers for tough business questions

Question: I want to revamp our tagline, but I have no clue where to start. What’s the best way to come up with one that truly reflects the unique gifts and shopping experience we offer without being too wordy?

What Story Are You Telling About Your Business?

What Story Are You Telling About Your Business?

As an independent retailer, you already know that to be successful you have to do more than simply sell “stuff.” But, how do you tell your unique story and connect with the people who aren’t yet your customers, and how do you know what information will resonate with them? Your local customers know your story and your focus on helping people live more fulfilling lives, but what about the larger community around you, or visitors to town? If you aren’t also reaching these people, you are missing a large opportunity to interact and build your story (and brand) with potential customers.

Tapping Into Happy

Tapping Into Happy

What does real happiness look like, and how do we achieve it in our daily lives? Those are the questions at the heart of Live Happy: Ten Practices for Choosing Joy. Deborah Heisz, the author and co-founder, COO, and editorial director of Live Happy magazine, recently spoke with Retailing Insight about her new book and how to apply the solutions in business and life.

Maggie Feeney: What inspired your research on happiness?

So You Want to Go to a Gem Show

So You Want to Go to a Gem Show

Does the sparkle of brilliant, clear Arkansas quartz in the sunshine delight you? Are you amazed when the sun hits the dull, dark colors of labradorite, revealing an array of blues, greens, golds, and, sometimes, purple? Do you love blazing heat, blinding dust, torrential downpours, sloshing mud, sunburn, and a sore back? Then it is time to get down and dirty and go to a gem and mineral show!

Now, before you run to your office, turn up the air conditioner, and look online for wholesale minerals, not all gem shows are out in the elements … but some of the best ones are.

Shop Talk: Practical answers for tough business questions

Question: A friend and fellow retail business owner was just audited by our state sales tax office and has to pay more than $700 in taxes and penalties. They were assessed for not reporting and paying the sales tax on merchandise they donated to charities! That seems unfair. Have you ever heard of such a thing?

Breakthrough

Breakthrough

Thirty years ago, the term “glass ceiling” was first coined to describe the invisible barrier preventing women from advancing their careers, despite their qualifications. Nearly every business has its own version of a glass ceiling, one made up of unseen obstacles such as sales numbers that won’t rise, unplanned expenses that undermine profit, and employee problems that leave little time for the real work of building one’s business. In this mix are the owner’s fears and unproductive habits, which create weaknesses in the health of the business.

Shop Talk: Practical answers for tough business questions

Question: My business partner wants us to bring greeting cards into our store, and I am hesitant. They have a low price point and limited profit potential because they are already pre-priced. What is your thinking on this?

Shop Talk: Practical answers for tough business questions

Question: We have been open two years and everything appears to be going well. Sales are increasing each month, as are the number of customers who come in each day. I was even hopeful I would be able to take a small salary this year until I got my store tax return back from our accountant.

What’s Your Merchandise Point of View?

What’s Your Merchandise Point of View?

No one walking into Walmart would mistake it for Target. You may be looking for a brand of paper towel or hair color found in either store, but you know which store you’re in the second the sliding doors open. You may think this is the result of layout and lighting (and to a point, it is), but mostly it’s due to their unique Merchandise Point of View.

Shop Talk: Practical answers for tough business questions

Question: Last year I went overboard in my spending and purchased way too much merchandise for the holidays. It took almost three months for my inventory to sell down to a normal level! I want to avoid a repeat scenario. Is there an easy way to set up a holiday budget?

Shop Talk: Practical answers for tough business questions

Question: I read yesterday that a recent survey showed almost 80 percent of American adults do not approve of retailers playing holiday music in their stores before Thanksgiving, and almost as many resent holiday decorations and merchandise being out before Thanksgiving. But, it seems all the big retailers do it anyway. Is there a guideline for small retailers?

Name Your Game

Name Your Game

The schoolyard games you played as a kid were organized with an agreed-upon set of rules. These rules developed without much formal thought, let alone a rule book. Over generations, the 6th graders taught the 3rd graders, who taught the kindergarteners, and so it went. This was the recess culture, and every kid played by the rules passed down through the unspoken social agreements of the schoolyard.

Countdown to Calendar Sales

Many inspirational calendars are works of art that can be enjoyed every day of the year. The process of buying them is also a work of art—when done correctly. If you develop a plan of action for purchasing your calendars, you can expect better profit from these perennial good sellers. Here are 5 helpful tips I’ve learned from my calendar-buying experiences.

Shop Talk: Practical answers for tough business questions

Question: Do you take items on consignment? I have some artist friends who make their own jewelry, and they want me to carry their creations in my store. I am thinking of accepting their items on consignment, but I worry the jewelry won’t sell and then I won’t know what to say. I also don’t know how much to charge for this service. Do you have any ideas?

Shop Talk: Practical answers for tough business questions

Question: Our new store just opened last month and sales are steady and growing. When we did the build out, we ran into some unexpected issues that cost extra money to rectify, and we were not able to complete all our renovations. One thing that got ignored was our small, dingy bathroom. Everything is old and stained and there is no way I would let a customer in there!

Shop Talk: Practical answers for tough business questions

Question: My lease is up for renewal next month. Originally I only signed a three-year lease because I was cautious about how things would go. Now that our sales are good and fairly stable and I like the location, I would like to sign a longer lease. My landlord told me last week she would not raise the price per square foot, which is great by me! But, how long a lease should I ask for now?

Shop Talk: Practical answers for tough business questions

Question: More and more, it seems vendors are not extending terms and are asking for payment up front or with a credit card. I understand and even expect this for the first order or two from a new vendor as we are getting to know and trust each other. After that, though, I expect Net-30 terms to be available.

Shop Talk: Practical answers for tough business questions

Question: A friend of mine who has a similar store in a neighboring state recommended I purchase a line of bath-care products that were “flying” off her shelves. I did and was so excited, but they have only collected dust on my shelves! I made a major investment (for me) and now I’m not sure what to do.

Five Ways to GreenYour Store

Five ways to green your store.

You don’t have to specialize in eco-merchandise to have an eco-minded store. A few simple adjustments can result in a healthier environment for your staff and your customers, and actually save you money in the process. Some communities even have “green certification” programs, which offer businesses incentives for reducing their carbon footprint and marketing materials to promote their “green-ification.” Here are a few ideas you can implement right now to help you make every day Earth Day!

Local Motion Part 1

(Part 1 of a 3-part series)

[Jump to Part 2] | [Jump to Part 3]

Local Motion Part 2

(Part 2 of a 3-part series)

[Go back to Part 1] | [Jump to Part 3]

So you’re ready to start a Buy Local business alliance in your town. You’ve done your research and reached out to other businesses you think would make a great working group to launch it. Now, it’s time to hold your first official meeting.

Local Motion Part 3

(Part 3 of a 3-part series)

[Go back to Part 1] | [Go back to Part 2]

You’ve established a dynamic Buy Local group. Now it’s time to get the word out about the benefits of buying local—and buying from your member businesses in particular. A kick-off event is a great way to generate free press and build excitement in the community.

Practical answers for tough business questions.

Question: My business partner thinks we can increase our total sales 25 percent by doubling our jewelry area. How can I tell if this is true? To give you some numbers: Our overall sales this past year were $480,000, and jewelry sales were $146,800. We have 1,400 square feet of sales space, and the eight display cases in the jewelry area take up 400 square feet.

Practical answers for tough business questions.

Question: My husband is getting ready to retire from his corporate job in two or three years, and we want to travel together. To do that, I would need to sell or close my store. How do I begin this process and make a plan to let go and hopefully sell at a profit?

Competition or Colleagues?

Competition or Colleagues?

What’s the difference between winning and achieving your personal best? Seeing your personal best as a victory is not an easy ideal to hold when faced with the prospect of “losing.” As you watch a store very much like yours move in down the street or find your customers have stopped ordering one of your products because someone else has a cheaper look-alike, it’s hard to enjoy the personal bests you achieved in your business last quarter.

Answering Serenity's Call

Answering Serenity's Call

The path to opening an independent shop is often a winding one, with many adventures along the way. Like Dorothy on the yellow-brick road, the way is peppered with frightful moments, unforeseen challenges, inspiring developments, a host of helpers, and finally, a true sense of accomplishment.

Just seven months old, Serenity Calling is a beautiful store in both appearance and intention, and the manifestation of a dream owner Gillian Caine nurtured for years.

RE-Sources for Success in Business from the RE-Doctor, James Wanless

The "RE Doctor," James Wanless, Ph.D., is an internationally recognized author, dynamic speaker and coach, innovative futurist, and expert in personal sustainability. In our six-video series, he shares his insights into RE-ing your life and business. For more on RE-ing your way to sustainable success, check out "The RE Rules" on p. 56 of the December 2013/January 2014 issue of Retailing Insight.

Shop Talk: Practical answers for tough business questions

Question: After two years of looking for a location, we finally found it and are now finalizing our financial plan to open this fall. One thing I am confused about is what inventory-turn target we should shoot for. Is there an industry average? How do I figure this out?

Shop Talk: Practical answers for tough business questions.

Question: Should I take advantage of vendor specials such as free shipping with a $500 order? That seems like a lot to me, but shipping is really expensive, especially on things like candles and personal care products. I have a small store (900 sq. ft.) and most of my orders are $200 or less. Am I missing a savings opportunity by being scared to order more?

Shop Talk: Practical answers for tough business questions

Question: I am applying for a small Business Administration loan to start my store, and they want me to submit a marketing plan that states my local demographics and who my target customer will be. I am finding this hard to do. We plan to appeal to all ages from young children to adults and men as well as women, so how do I narrow this down?

Shop Talk: Practical answers for tough business questions

Question: Last year was our third year in business and we did well over the holidays with sales increasing about 3 percent over the previous year. I can’t help but wonder, though, if I was too conservative in my buying, because we ran out of many things, and I think we missed sales because of it.

Jingle Sells

Jingle Sells

All year long, retailers gear up for the customer traffic and healthy sales that are the promise of the holiday season. Experienced retailers know to display their new product early to give their customers a jump on holiday buying. They have learned the sooner they capture customers’ attention with a great selection of quality merchandise and exciting reasons to shop in their store, the sooner they will receive their share of shoppers’ holiday spending budgets.

Shop Talk: Practical answers for tough business questions

Question: This past year i decided to expand our inventory and incorporate merchandise we haven’t carried before but have had an occasional request for. It was my attempt to be open-minded and allow customers to have more choices. What I find, though, is that what I (and my employees) love sells well, and the rest just sits. Now what do I do?

Shop Talk: Practical answers for tough business questions

Question: I want to hire an assistant/bookkeeper to help me make sense of the papers that just keep stacking up on my desk. Can I hire a contract laborer so I don’t have to carry worker’s compensation insurance and pay payroll taxes?

Spamalot

“Spam-spam-spam-spam. Lovely spam! Wonderful spam! Spam, spa-a-a-a-a-am!”
—Monty Python’s Flying Circus

Ubiquitous spam. It’s become an expected cost of online communication. No, I’m not talking about canned meat but, rather, the unwanted junk email which, thanks to sophisticated spam filtering, we seldom pay attention to nowadays. And, athough the term “spam” wasn’t used to describe junk email until the early 90s, spam has been around since the Internet’s formative years—the first spam email was reportedly sent in 1978!

Shop Talk: Practical answers for tough business questions

Question: We recently switched to a new worker’s compensation insurance provider because they offer an annual rebate if we don’t have any claims. Now they want us to have every employee fill out a health survey and undergo a drug test. This seems invasive to me. Is this normal? Do you drug test your employees?

Shop Talk: Practical answers for tough business questions

Dear Readers,
In last issue’s Shop Talk column, I answered a question from a reader expressing concern about the high cost of accepting American Express cards. The following are responses I received that I think will be of interest to all.

Business by the Dashboard Light

Business by the Dashboard Light

I’ve never met anyone in business who’s only in it to make a buck. Every store owner I know has a grand plan that takes them beyond the initial opening of their store and a positive end-of-year profit-and-loss statement. They have a calling to be a community leader, they want to keep indie bookstores alive, they want to teach every willing child how to knit, they want to work half the year and vacation the other half. More than the bottom line gets them up in the morning and gives them the fortitude to get through each day.

Navigating the New Lending Maze

If you’re like most small business owners, you’re finding it tougher than ever to negotiate with your bank. Loans are harder to come by. Fees are popping up more and more.

The reluctance of banks to lend money can make it tough to fund operations. Even so, bank experts say the financing picture is not all gloom and doom.

Shop Talk: Practical answers for tough business questions.

Question: My store has been open three years. it has been a long road, but I feel we are finally out of the woods and making some money so I can take a paycheck. One area where I am still behind the eight ball is paperwork. My inbox overflows with paper, including invoices that need to be paid. Sometimes we have plenty of money, but the bills are late because I just can’t get to it.

Shop Talk: Practical answers for tough business questions.

Question: I currently accept mastercard, visa, discover, and American Express cards. Many of my customers who make higher dollar purchases use American Express almost exclusively. However, it’s becoming increasingly expensive to accept American Express, and I’m considering not accepting it any longer.

Shop Talk: Practical Answers for tough business questions.

Question: Can you give me some advice on working with reps? I am glad they come to see me, but I spend a great deal of time looking at product lines that don’t seem to fit my store. And when I do take a rep’s recommendation and bring in a new line at their urging, it usually doesn’t sell well. Do you have any suggestions to make buying easier and less time-consuming?

Shop Talk: Practical Answers for tough business questions.

Question: I know you have been in business a long time, but I am curious about your early years. Can you tell me what your annual sales and your sales per square foot were your first year or two? Did you see a gradual or sudden increase in sales over those first few years?

Shop Talk: Practical Answers for tough business questions.

Question: What do you think of lay-away plans? I haven’t offered layaway before, but I’m wondering if it would make it easier for customers to afford higher-end items in this soft economy.

Shop Talk: Practical answers for tough business questions

Question: I am creating a budget for 2013 (our first, I am hesitant to admit) and I want ask to about planning for profit on the bottom line. How much do you plan for? I want to be realistic, but in the past we have been so happy just to break even that I have never considered planning for profit.

Shop Talk: Practical answers for tough business questions

Question: My customers are clamoring for new merchandise but my credit cards and accounts payable do not really allow me room to take chances on new lines. Is there an ordering cycle or a way of managing inventory that will give me more cash flow?

Shop Talk: Practical answers for tough business questions.

Question: I read your column about the clear bags with sticky strips that scarves are packaged in and want to offer this info: Like you, I receive scarves and other clothing articles in those same bags. Unless you get your clothing from a different source than I do, I suspect these bags are not plastic, but cellophane.

Shop Talk: Practical answers for tough business questions

Question: Do you have a different return policy for holiday returns, such as giving customers a longer time to return items, than you do the rest of the year? We had some issues last year, and I remember at least one disgruntled customer who wanted to return merchandise for a refund in late January that she had purchased in November How do you handle this?

Shop Talk: Practical answers for tough business questions.

Question: It seems we are always financially behind. Our accountant has suggested our gross profit margin is too low and we need to raise our prices. We have agreed to do this, but it seems a daunting task. Should we start on one side of the store and just re-price everything? Can you suggest an easier way?

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