06292017Thu
Last updateWed, 28 Jun 2017 10pm

David Brown

How to use the 80/20 Rule: 3 reports that are your lifeblood

David Brown eI’ve long been a big fan of the 80/20 or Pareto Principle - the theory developed by 19th century economist Vilfredo Pareto that demonstrated 20% of the inputs provide 80% of the outputs or results. Initially he used it to apply to land ownership where he found 80% of Italian land was owned by 20% of landowners.


Setting your personal and business goals

The term work/life balance is one we hear a lot in business and is in danger of becoming something of a cliché. The reality is that as business owners we regularly run the risk of work becoming an all consuming obsession to the detriment of our health and our personal enjoyment. It’s easy to forget the reason we became involved in business in the first place. Sometimes you need to revisit your objectives to help stay clear on your purpose in life.

Is clienteling a part of your sales formula?

Brown2In a marketplace that is becoming more globally competitive, the ability to generate extra sales is an ever increasing challenge for most store owners.

For many it seems that the only factor that matters to customers is price, and that the only way to gain more business is to buy it. However, as has been repeatedly shown, customers only value price when there is an absence of other important factors - if they can’t differentiate between Store A and Store B then price becomes the pre-dominant motive.

How to deal with that bad hiring decision

We’ve all been there. That “perfect candidate” we hired just doesn’t work out for whatever reason and we’re left ruing the decision and trying to manage the fallout that might happen afterwards. Depending on the person this can take all forms including a loss in sales, staff disagreement, management time in re-performing tasks, even legal costs if things get ugly.

Sometimes it just comes down to having the wrong person in the wrong position. This may not always be obvious - if a staff member is struggling to perform tasks they can sometimes be very good at disguising the problem. Rather than just admitting they are unable to cope they deal with the matter in a variety of ways that may seem to have nothing to do with the issue - arriving late to work, low productivity, arguing with fellow staff members - it can show up in a myriad of ways.

The tortoise and the hare

While my kids were growing up one of the favorite stories I most loved to tell them was the tortoise and the hare. You’ll know the story well enough to know the moral - slow and steady ultimately can win the day over the fast and more glamorous alternative.

For many store owners the tortoise part of their business can be repairs - it normally has a low average sale, can be time consuming and leads to the greatest number of complaints and returns when the repair mysteriously “broke” shortly after it was completed!

When did you last review your prices?

When we talk to clients about the key performance areas of any businesses profitability we generally come down to four factors that need to be measured and monitored closely: stockturn, quantity of sales, margins and average retail. There are many factors that can affect these four areas, but if there is any area of a business that is the quickest and easiest to adjust in order to improve the bottom line it would be price. It would also be the area of business that store owners have the most reservations about changing.

How long will it take to sell your old inventory?

If you stopped buying today, how long would your current inventory last you? This is a variation of the old question, if you stopped working how long would your money last, but in this case we’re honing in on the amount of surplus product most store owners are carrying.

Why do this exercise? Because, as we repeatedly tell our clients and anyone else who listens, most stores have a surplus of product sitting around that simply doesn’t perform.

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