From Shari Waters,
Your Guide to Retailing.
Creative Marketing Ideas
Small business owners can easily get too involved in the day-to-day operations of their retail stores to spend any time brainstorming marketing ideas or promotional events. Some retailers worry that marketing is too expensive, others may find it too time consuming. Without announcing who you are and what you sell, how will anyone know? Here are 50 marketing ideas for retailers.
1. Create a calendar for customers with your shop's name and address on it.
2. Print the products you sell or services offered on the back of your business cards.
3. Always carry business cards with you. Give them freely and ask permission to leave them in places your target market may visit.
4. Join a trade association or organization related to your industry.
5. Have a drawing for a product or a gift certificate. Use the entry forms to collect customers' mailing addresses.
6. Develop a brochure of services your shop offers.
7. Conduct monthly clinics about a product or service you offer or schedule semi-annual seminars on related "how-to" information for your industry.
8. Print a tagline for your business on letterhead, fax cover sheets, e-mails and invoices.
9. Develop a website to showcase your products, services and location. Use a memorable URL and include it on all marketing materials.
10. Include customer testimonials in your printed literature.
11. Promote yourself as an expert by writing articles or tips on topics related to your industry.
12. Submit to the local newspaper, trade journal or other publications.
13. Host an after-hours gathering for your employees and their friends/relatives.
14. Provide free t-shirts with your logo to your staff to wear.
15. Send newsworthy press releases as often as needed.
16. Create an annual award and publicize it.
17. Develop your own TV show on your specialty and present it to your local cable station or public broadcasting station.
18. Create a press kit and keep its contents current.
19. Use an answering machine or voice mail system to catch after-hours phone calls. Include basic information in your outgoing messages such as business hours, location, website, etc.
20. Join a Chamber of Commerce where you can network with area business owners.
21. Hold an open house. Invite prominent city officials and the press.
22. Get a memorable local or toll-free phone number.
23. Place ads in publications your market reads. Be sure to reach the non-English speaking market as well.
24. Distribute specialty products such as pens, mouse pads, or mugs with your store's logo.
25. Advertise in creative locations such as park benches, buses, and popular Web sites.
26. Improve your building signage.
27. Get a booth at a trade show or expo attended by your target market.
28. Give a speech or volunteer for a career day at a high school.
29. Sponsor an Adopt-a-Highway area in your community to keep roads litter-free.
30. Donate your product or service to a charity event or auction.
31. Have a Yellow Pages ad listed under your main industry and in related categories.
32. Volunteer your time to a charity or non-profit organization.
33. Create a loyalty program to reward existing customers.
34. Create an opt-in email or print newsletter for your customers. Fill each edition with specials, tips and other timely information.
35. Send hand-written thank you notes to important customers every chance you get.
36. Use brightly colored envelopes and unique stationary when sending direct mail pieces.
37. Show product demos or related videos on a television on the sales floors during store hours.
38. Book a celebrity guest for an event at your store. Use people in your industry or television news anchors or local authors.
39. Create window displays in locations away from your shop. Airports, hospitals, and large office buildings occasionally have display areas they rent to local businesses.
40. Team up with a non-competing business in your area to offer a package promotion.
41. Pick the slowest day of the week to hold a one-day sale.
42. Create a warm, welcoming waiting area for your customers.
43. Provide extra customer service training for your staff.
44. Sign up for a newsletter or join online discussion groups in your industry.
45. If possible, loan your facilities to other groups for a meeting place.
46. Create a unique lapel pin based on the products you sell to wear at meetings.
47. Choose a regular customer to spotlight as a Customer of the Month. Create a brief write up to submit to the local newspaper about the customer and be sure to give he or she a copy of the article as well as have one framed to hang in the store.
48. Pair up slow moving items with related products and repackage as a special buy.
49. Start a blog. Write about your industry or detail in-store happenings.
50. Offer your customers discounts for each referral they provide.
Marketing is most effective if done in coordination with other exposure. Enhance the above efforts with additional signage, newspaper ads, displays and radio ads. Remember to tailor each event for your target audience. If your message isn't being delivered to the right person, it may be a wasted effort.
shop/ kitchen fitting, Revamps and refits, New Store, Instore Housekeeping Planogram Implementation Display Management Point of Sale Implementation Product Placement Price Checks Tactical or ad hoc Work Mystery Shopping Leaflet Installation & Replenishment Product Assembly prior to displayt
Sunday, 29 June 2008
Bar fitting, Bar Counter, Shop fittings, Shop fitting, Bar fitters
Why Choose a Custom Counter Design
Why Choose a Custom Counter Design?
By Mr. William
Counters are an integral part of many businesses no matter whether you own a nightclub, a coffee shop or anything in-between. They are possibly the most used part of any bar design and certainly have to put up with a lot of abuse. Hot pans, liquids and food stuff can all take their toll on a counter top and therefore it is imperative that quality materials are used.
Now there are many companies who are able to supply counters and cabinets but what about if your needs are specific. Maybe your premises are an unusual shape or you are unsure about the whole shop fitting process. This is where the services of a good custom countertop supplier are a must.
A good shop fitting company will be able to take your ideas and develop them into something that truly matches your exact needs and desires. At the same time they should be able to guide you through a project from the beginning right through to completion. This way you are only dealing with one company therefore minimising any problems that could arise.
Another thing to consider is product choice. It is always better if there is a wide selection of designs to choose from, allowing you to find one that's perfect for your situation. A good shop fitting company should have an extensive product range to cover your varying needs.
Since custom counters and cabinets can come in many different shapes, sizes and have lots of applications, choosing the right one is dependant on your business. For instance, if you own a nightclub, your needs are totally different to someone who owns a coffee shop. That being said, a good shop fitter will be able to create and adapt any of their counters to suit any project or bar design.
The ability to adapt and develop your chosen design can often be paramount and therefore choosing a custom counter design gives you the flexibility needed to make your project shine. One custom counter provider is Counter Fit who not only have the wide selection of products needed to cater for many situations but can be with you every step of the way from the design phase to the actual shop fitting. They are on hand seven days a week and are contactable via email twenty four hours a day.
Why not see how Counter Fit can help you get your hands on a new custom counter design by visiting the website at http://www.counter-fit.co.uk
William is a well informed author who writes articles and reviews for Counterfit limited, which offers wide range of modern, traditional and contemporary modular bar fittings, shop fittings, bar fitting, counter tops and bespoke counter designs to suit your premises.
Article Source: http://EzineArticles.com/?expert=Mr._William
http://EzineArticles.com/?Why-Choose-a-Custom-Counter-Design?&id=1220865
Product Positioning and Merchandising in the Retailer Outlet
Positioning and Merchandising in the outlet are a part of a process of presenting the product to the consumers. Good positioning is the key of the success in selling the product. It is important to understand that not all locations within outlet are good for the specific product.
Usual "good" positions within the outlet are:
- Near the entrance ( or in front of entrance in some cases )
- In front sides of the racks, not behind
- Before competitor
- In areas where consumers spend most of their time while shopping ( Hot Spots )
- In the eye level of consumer ( not too high or not too low )
- Next to the cashier
After getting the "good" position, the next thing that we should take care about is the "Size". The Size means space that our products occupy on the rack in term of sales versus the competition. The space dedicated to our product should be equal or bigger than is the share of sales of our product in the market. This is "Space to Sales" rule. This rule is simple and it helps to retailer but also the supplier with the significant market share.
In some cases customers ( owners of the outlet ) are not respecting this rule, for some reason. Example, they are giving too much space to slow moving product, maybe because high stock accumulated due to low sales. The problem is that this product will not sell more proportional to extra space given, at same time some other fast moving products will not have a chance to sell at full potential. The solution for this problem is the right order in the first place. This means that we have problem with space given to our product since our customer is overstocked with slow-mover product, we can try to educate our customer to place right order for all product, proportional to their sales and potential and to dedicate right space range in the shelves according the sell-out of each brand, product or category.
Finally, when we have a good position and space for our product, it is time for the Merchandising of the products. There are several definitions of Merchandising like:
"Merchandising is effective arranging of the product in the place of sales, with purpose of accelerating the sales."
"Merchandising is process of exposing the product in the danger of being bought." :-)
Effective arranging of the product means applying the group of rules to the products on the shelf:
- Corporative block ( all products of your company are arranged in the block, which give you the impact through synergy and visibility
- Space to sales to your SKUs
- Brand order, by the sales in the traffic flow ( Top selling Brand is leading your block )
- Pack vertically aligned, the different pack size on the different shelf level
- Price tags placed, with visible price ( with included VAT, discount etc. ) and product code
- FEFO Rule ( First Expires First Out ). For the products with life limit, which is usual for the FMCG product, you should always place the product with shorter life remained in front of the others.
- Promotional signs
- Keep the product clean and undamaged
Who does Merchandising? Primarily this is the role of the Salesmen responsible for specific outlet, meaning that the same person is selling the product, but also merchandising the product. In some cases, special dedicated person - Merchandiser is hired to do only Merchandising. This is quite common for supplying companies that have big share and sell-out, so they can employ Merchandiser in large size outlets Supermarket/Hypermarkets only to do shelving and arranging the products. This is justified for huge sell-out outlets. Otherwise, employees of this Super/Hypermarkets cannot do this job good enough, because other obligations.
Merchandising is different for distinguished businesses and product types. E.g. Merchandising and positioning of TV sets is done in different way than positioning of Fast Move Consumer Goods (FMCG ) like food, beverages, ...
The benefits of good positioning are increased sales volume, increased number of "unplanned" (impulse ) purchases, increasing the corporate image. All this brings additional profit for the supplying company, but also for the retailer who is dealing these products. This profit can be used as a Profit Story as a negotiation tool for better position.
At same time the consumer have it's own benefits out of good Positioning and Merchandising: ease of shopping, favorite brands at the reach of hand and less effort invested in looking for specific product within outlet.
Based on previously said, we can conclude that good and effective positioning is beneficial for everybody involved in transaction of product; the Supplier, the Retailer and the Customer.
Laurus Nobilis has 11 years of experience in FMCG business. He has been working in differend functions, primarily in Sales Department and Supply Chain. In 2007 he has started the http://www.biz-development.com web site dedicated to development of managerial skills and knowledges necessary for running the business.
Laurus Nobilis has 11 years of experience in FMCG business. He has been working in differend functions, primarily in Sales Department and Supply Chain. In 2007 he has started the http://www.biz-development.com web site dedicated to development of managerial skills and knowledges necessary for running the business.
Article Source: http://EzineArticles.com/?expert=Laurus_Nobilis
Usual "good" positions within the outlet are:
- Near the entrance ( or in front of entrance in some cases )
- In front sides of the racks, not behind
- Before competitor
- In areas where consumers spend most of their time while shopping ( Hot Spots )
- In the eye level of consumer ( not too high or not too low )
- Next to the cashier
After getting the "good" position, the next thing that we should take care about is the "Size". The Size means space that our products occupy on the rack in term of sales versus the competition. The space dedicated to our product should be equal or bigger than is the share of sales of our product in the market. This is "Space to Sales" rule. This rule is simple and it helps to retailer but also the supplier with the significant market share.
In some cases customers ( owners of the outlet ) are not respecting this rule, for some reason. Example, they are giving too much space to slow moving product, maybe because high stock accumulated due to low sales. The problem is that this product will not sell more proportional to extra space given, at same time some other fast moving products will not have a chance to sell at full potential. The solution for this problem is the right order in the first place. This means that we have problem with space given to our product since our customer is overstocked with slow-mover product, we can try to educate our customer to place right order for all product, proportional to their sales and potential and to dedicate right space range in the shelves according the sell-out of each brand, product or category.
Finally, when we have a good position and space for our product, it is time for the Merchandising of the products. There are several definitions of Merchandising like:
"Merchandising is effective arranging of the product in the place of sales, with purpose of accelerating the sales."
"Merchandising is process of exposing the product in the danger of being bought." :-)
Effective arranging of the product means applying the group of rules to the products on the shelf:
- Corporative block ( all products of your company are arranged in the block, which give you the impact through synergy and visibility
- Space to sales to your SKUs
- Brand order, by the sales in the traffic flow ( Top selling Brand is leading your block )
- Pack vertically aligned, the different pack size on the different shelf level
- Price tags placed, with visible price ( with included VAT, discount etc. ) and product code
- FEFO Rule ( First Expires First Out ). For the products with life limit, which is usual for the FMCG product, you should always place the product with shorter life remained in front of the others.
- Promotional signs
- Keep the product clean and undamaged
Who does Merchandising? Primarily this is the role of the Salesmen responsible for specific outlet, meaning that the same person is selling the product, but also merchandising the product. In some cases, special dedicated person - Merchandiser is hired to do only Merchandising. This is quite common for supplying companies that have big share and sell-out, so they can employ Merchandiser in large size outlets Supermarket/Hypermarkets only to do shelving and arranging the products. This is justified for huge sell-out outlets. Otherwise, employees of this Super/Hypermarkets cannot do this job good enough, because other obligations.
Merchandising is different for distinguished businesses and product types. E.g. Merchandising and positioning of TV sets is done in different way than positioning of Fast Move Consumer Goods (FMCG ) like food, beverages, ...
The benefits of good positioning are increased sales volume, increased number of "unplanned" (impulse ) purchases, increasing the corporate image. All this brings additional profit for the supplying company, but also for the retailer who is dealing these products. This profit can be used as a Profit Story as a negotiation tool for better position.
At same time the consumer have it's own benefits out of good Positioning and Merchandising: ease of shopping, favorite brands at the reach of hand and less effort invested in looking for specific product within outlet.
Based on previously said, we can conclude that good and effective positioning is beneficial for everybody involved in transaction of product; the Supplier, the Retailer and the Customer.
Laurus Nobilis has 11 years of experience in FMCG business. He has been working in differend functions, primarily in Sales Department and Supply Chain. In 2007 he has started the http://www.biz-development.com web site dedicated to development of managerial skills and knowledges necessary for running the business.
Laurus Nobilis has 11 years of experience in FMCG business. He has been working in differend functions, primarily in Sales Department and Supply Chain. In 2007 he has started the http://www.biz-development.com web site dedicated to development of managerial skills and knowledges necessary for running the business.
Article Source: http://EzineArticles.com/?expert=Laurus_Nobilis
Visual Merchandising Tips
By Gary Petz
Visual impact is a huge component of retail merchandising. Customers entering a store are greatly influenced by the visual information they gather in the first split second. One simple visual element, such as color, can catch a shopper's attention and also greatly affect their mood. In today's ultra competitive market place it is of paramount importance that retailers understand the basics of visual merchandising. Here are 5 visual merchandising tips to help you maximize your efforts.
1. Display sale products in a creative way. When building a product display look for products that are natural add-ons to the main product featured. A great visual merchandising tip for a grocery store: Build an end cap special on tomato soup, but don't just stop with the soup, get creative. Merchandise the entire end cap with tomato soup then place a shelf at eye level displaying brightly colored soup bowls as an add-on sale item. Visually the display would have a repeating label accented by one ribbon shelf of bowls. This is good visual merchandising practice and great way to increase margin.
2. Use accent lighting to feature products. Customers are drawn to light. Lighting can make products shine and bring colors to life. Using this visual merchandising tip to wash a display wall with light will enhance any product. Accent lighting creates visual interest for shoppers, and magically puts products in their sight. Once a product has captured a customer's attention the odds are increased that a purchase is at hand. This visual merchandising tip will impact your customers and your profits.
3. Change displays weekly. This visual merchandising tip reminds us that customers want to see new and different products. There is an aspect of entertainment and education that customers appreciate when stores change their displays. Stores that don't change their displays weekly will have customers simply walking past displays that are no longer fresh. If the customers have seen the same end cap for the last six weeks, the displays are no longer new or relevant to them. These stores will not reap the potential rewards of incremental or add-on sales and can lose out to their competition. If the competitor down the street is constantly and creatively changing their visuals, there is a good chance shoppers will gravitate to that store.
4. Color matters. Visual merchandising tips like this one are at the core of any solid merchandising plan. Color can demand a shopper's attention, evoke emotion and influence decisions. Your merchandising plan should include bright colors not only for displays or end caps, but also for the middle of aisle runs. Visually painting your store with colorful focal points will help draw shoppers to those key areas.
5. Merchandising themes Themes group products together for a powerful visual message. Theme merchandising is a fun way to communicate seasonal activities or other information. If your store is a hardware store, use garden gloves, flower bulbs, decorative pots, hand gardening tools, and potting soil to get your sales started for spring. Outdoor grilling displays are great themes for grocery stores and home centers. Backyard chefs will be attracted to every item in your display. Themes connect customers to projects or activities, and as a result, connect their spending to your profits.
Gary Petz - At Discovery-Based Retail we help retailers make more money. Visit our website and find out how. http://www.discoverdbr.com and http://www.discoverybasedretail.com
Article Source: http://EzineArticles.com/?expert=Gary_Petz
http://EzineArticles.com/?Visual-Merchandising-Tips&id=1276191
How to Successfully Navigate Your Business through an Economic Downturn
How to Successfully Navigate Your Business through an Economic Downturn
by: Terry H Hill
An economic downturn is a phase of the business cycle in which the economy as a whole is in decline.This phase basically marks the end of the period of growth in the business cycle. Economic downturns are characterized by decreased levels of consumer purchases (especially of durable goods) and, subsequently, reduced levels of production by businesses.
While economic downturns are admittedly difficult, and are formidable obstacles to small businesses that are trying to survive and grow, an economic downturn can open up opportunities. A well-managed company can realize the opportunity to gain market share by taking customers away from their competitors. Resourceful entrepreneurs capture the available opportunities, from an economic downturn, by developing alternate methods of doing business that were never implemented during a prior growth period.
The challenge of successfully navigating your business through an economic downturn lies in the realignment of your business with current economic realities. Specifically, you, as the business owner, need to renew a focus on your core clients/customers, reduce your operating expenses, conserve cash, and manage more proactively, rather than reactively, is paramount.
Here are best practices that will help you to successfully navigate your business through an economic downturn:
Goals:
The primary goal of any business owner is to survive the current economic downturn and to develop a leaner, more cost-effective and more efficient operation. The secondary goal is to grow the business even during this current economic downturn.
Objectives:
• Conserve cash.
• Protect assets.
• Reduce costs.
• Improve efficiencies.
• Grow customer base.
Required Action:
• Do not panic… History shows that economic downturns do not last forever. Remain calm and act in a rational manner as you refocus your attention on resizing your company to the current economic conditions.
• Focus on what YOU can control… Don’t let the media's rhetoric concerning recessions and economic slowdown deter you from achieving business success. It´s a trap! Why? Because the condition of the economy is beyond your control. Surviving economic downturns requires a focus on what you can control, i.e. your relevant business activities.
• Communicate, communicate, and communicate! Beware of the pitfall of trying to do too much on your own. It is a difficult task indeed to survive and to grow your business solely with your own efforts. Solicit ideas and seek the help of other people (your employees, suppliers, lenders, customers, and advisors). Communicate honestly and consistently. Effective two-way communication is the key.
• Negotiate, negotiate, and negotiate! The value of a strong negotiation skill set cannot be overstated. Negotiating better deals and contracts is an absolute must for realigning and resizing your company to the current economic conditions. The key to success is not only knowing how to develop a win-win approach in negotiations with all parties, but also keeping in mind the fact that you want a favorable outcome for yourself too.
Recommended Best Practice Activities:
The Nuts and Bolts… The following list of recommended best practice activities is critical for your business' survival and for its growth during an economic downturn. The actual financial health of your particular business, at the outset of the economic downturn, will dictate the priority and urgency of the implementation of the following best practice activities.
1. Diligently monitor your cash flow: Forecast your cash flow monthly to ensure that expenses and planned expenditures are in line with accounts receivable. Include cash flow statements into your monthly financial reporting. Project cash requirements three-to- six months in advance. The key is to know how to monitor, protect, control, and put cash to work.
2. Carefully convert your inventories: Convert excess, obsolete, and slow-moving inventory items into cash. Consider returning excess and slow-moving items back to the suppliers. Close-out or inventory reduction sales work well to resize your inventory. Also, consider narrowing your product offerings. Well-timed order placement helps to reduce excess inventory levels and occasional material shortages. The key is to reduce the amount of your inventory without losing sales.
3. Timely collection of your accounts receivable: This asset should be converted to cash as quickly as possible. Offer prompt payment discounts to encourage timely payments. Make changes in the terms of sale for slow paying customers (i.e. changing net 30 day terms to COD). Invoicing is an important part of your cash flow management. The first rule of invoicing is to do it as soon as possible after products are shipped and/or after services are delivered. Place an emphasis on reducing billing errors. Most customers delay payments because an invoice had errors, and therefore, will not pay until they receive a corrected copy. Email or fax your invoices to save on mailing time. Post the payments that you have received and make deposits more frequently. The key is to develop an efficient collection system that generates timely payments and one that gives you advance warning of problems.
4. Re-focus your attention on your existing clients/customers: Make customer satisfaction your priority. A regular review of your customers' buying history and frequency of purchases can reveal some interesting facts about your customers' buying habits. Consider signing long-term contracts with your core clients/customers which will add to your security. Offer a discount for upfront cash payments. The key is to do what it takes to keep your current customers loyal.
5. Re-negotiate with your suppliers, lenders, and landlord:
i) Suppliers: Always keep your negotiations on the level of need, saying that your company has reviewed its cost structure and has determined that it needs to lower supplier costs. . Tell the supplier that you value the relationship you have developed, but that you need to receive a cost reduction immediately. Ask your supplier for a lower material price, a longer payment cycle, and the elimination of finance charges. Also, see if you can buy material from them on a consignment basis. In return for their price concessions, be willing to agree to a long-term contract. Explore the idea of bartering as a form of payment.
ii) Lenders: Everything in business finance is negotiable and your relationship with a bank is no exception. The first step to successful renegotiations is to convince your lenders that you can ultimately pay off the renegotiated loan. You must point out to your lenders why it would be in their best interest to agree to a new arrangement. Showing them your business plan and your action plan that includes your cost-savings initiatives, along with "the how" and "the when" of the implementation of your plan is the best way to achieve this goal. Explain to them that you will need their cooperation to insure that you can survive, as well as, grow your business during the economic downturn. Negotiated items include: the rate of interest, the required security to cover the loan, and the beginning date for repayment. A beginning date for repayment could be immediate, within several months or as long as a year. The key is to realize that your lender will work with you, but that frequent and continual communications with them is critical.
iii) Landlord: Meet with your landlord. Explain your need to have them extend the term of your lease at a reduced cost. Make sure you have a clause in the lease agreement that entitles you to have the right to sublet any or all of the leased space.
6. Re-evaluate your staffing requirements: This is a very critical area. Salaries/wages are a major expense of doing business. Therefore, any reduction in the hours worked through work schedule changes, short-term layoffs or permanent layoffs has an immediate cost saving benefit. Most companies ramped up hiring new employees in the good times, only to find that they are currently overstaffed due to slow sales during the economic downturn. In terms of down-sizing your staff, be very careful not to reduce your staff to a level that forces you to skimp on customer service and quality. Consider the use of part-timers or the current trend of outsourcing certain functions to independent contractors.
7. Shop for better insurances rates: Get quotations from other insurance agents for comparable coverage to determine whether or not your present insurance carrier is competitive. Also, consider revising your coverage to reduce premium costs. The key is to have the right balance-to be adequately insured, but not under or over insured.
8. Re-evaluate your advertising: Contrary to the other cost-cutting initiatives, evaluate the possibility of increasing your advertising expenditures. This tactic realizes the advantage of the reduced "noise" and congestion (fewer advertisers) in the marketplace. The downturn period a great opportunity to increase brand awareness and create additional demand for your product/service offerings.
9. Seek the help of outside advisors: The use of an advisory board comprised of your CPA, attorney, and business consultant offers you objectivity and provides you with professional advice and guidance. Their collective experience in working with similar situations in past economic downturns is invaluable.
10. Review your other expenses: Target an across-the-board cost-cutting initiative of 10-15%. Attempt to eliminate unnecessary expenses. Tightening your belt in order to weather the downturn makes practical, financial sense.
Proactively managing your business through an economic downturn is an enormous challenge and is critical for your survival. However, through well-planned initiatives, an economic downturn can create tremendous opportunity for your company to gain greater market share. In order to take advantage of this growth opportunity, you must act quickly to implement the above best business practices to continue realigning and resizing your company to the current economic conditions.
Copyright © 2008 Terry H. Hill
You may reprint this article free of charge in your newsletter, magazine, or on your website, provided that the article is unedited, and that the copyright, author's bio, and contact information below appears with each article. Articles appearing on the web must provide a hyperlink to the author's web site, http://www.legacyai.com
Terry H. Hill is the founder and managing partner of Legacy Associates, Inc, a business consulting and advisory services firm. A veteran chief executive, Terry works directly with business owners of privately held companies on the issues and challenges that they face in each stage of their business life cycle. To find out how he can help you take your business to the next level, visit his site at http://www.legacyai.com
To download a copy of this article, click on this link: http://www.legacyai.com/Article_Downturn.html.
by: Terry H Hill
An economic downturn is a phase of the business cycle in which the economy as a whole is in decline.This phase basically marks the end of the period of growth in the business cycle. Economic downturns are characterized by decreased levels of consumer purchases (especially of durable goods) and, subsequently, reduced levels of production by businesses.
While economic downturns are admittedly difficult, and are formidable obstacles to small businesses that are trying to survive and grow, an economic downturn can open up opportunities. A well-managed company can realize the opportunity to gain market share by taking customers away from their competitors. Resourceful entrepreneurs capture the available opportunities, from an economic downturn, by developing alternate methods of doing business that were never implemented during a prior growth period.
The challenge of successfully navigating your business through an economic downturn lies in the realignment of your business with current economic realities. Specifically, you, as the business owner, need to renew a focus on your core clients/customers, reduce your operating expenses, conserve cash, and manage more proactively, rather than reactively, is paramount.
Here are best practices that will help you to successfully navigate your business through an economic downturn:
Goals:
The primary goal of any business owner is to survive the current economic downturn and to develop a leaner, more cost-effective and more efficient operation. The secondary goal is to grow the business even during this current economic downturn.
Objectives:
• Conserve cash.
• Protect assets.
• Reduce costs.
• Improve efficiencies.
• Grow customer base.
Required Action:
• Do not panic… History shows that economic downturns do not last forever. Remain calm and act in a rational manner as you refocus your attention on resizing your company to the current economic conditions.
• Focus on what YOU can control… Don’t let the media's rhetoric concerning recessions and economic slowdown deter you from achieving business success. It´s a trap! Why? Because the condition of the economy is beyond your control. Surviving economic downturns requires a focus on what you can control, i.e. your relevant business activities.
• Communicate, communicate, and communicate! Beware of the pitfall of trying to do too much on your own. It is a difficult task indeed to survive and to grow your business solely with your own efforts. Solicit ideas and seek the help of other people (your employees, suppliers, lenders, customers, and advisors). Communicate honestly and consistently. Effective two-way communication is the key.
• Negotiate, negotiate, and negotiate! The value of a strong negotiation skill set cannot be overstated. Negotiating better deals and contracts is an absolute must for realigning and resizing your company to the current economic conditions. The key to success is not only knowing how to develop a win-win approach in negotiations with all parties, but also keeping in mind the fact that you want a favorable outcome for yourself too.
Recommended Best Practice Activities:
The Nuts and Bolts… The following list of recommended best practice activities is critical for your business' survival and for its growth during an economic downturn. The actual financial health of your particular business, at the outset of the economic downturn, will dictate the priority and urgency of the implementation of the following best practice activities.
1. Diligently monitor your cash flow: Forecast your cash flow monthly to ensure that expenses and planned expenditures are in line with accounts receivable. Include cash flow statements into your monthly financial reporting. Project cash requirements three-to- six months in advance. The key is to know how to monitor, protect, control, and put cash to work.
2. Carefully convert your inventories: Convert excess, obsolete, and slow-moving inventory items into cash. Consider returning excess and slow-moving items back to the suppliers. Close-out or inventory reduction sales work well to resize your inventory. Also, consider narrowing your product offerings. Well-timed order placement helps to reduce excess inventory levels and occasional material shortages. The key is to reduce the amount of your inventory without losing sales.
3. Timely collection of your accounts receivable: This asset should be converted to cash as quickly as possible. Offer prompt payment discounts to encourage timely payments. Make changes in the terms of sale for slow paying customers (i.e. changing net 30 day terms to COD). Invoicing is an important part of your cash flow management. The first rule of invoicing is to do it as soon as possible after products are shipped and/or after services are delivered. Place an emphasis on reducing billing errors. Most customers delay payments because an invoice had errors, and therefore, will not pay until they receive a corrected copy. Email or fax your invoices to save on mailing time. Post the payments that you have received and make deposits more frequently. The key is to develop an efficient collection system that generates timely payments and one that gives you advance warning of problems.
4. Re-focus your attention on your existing clients/customers: Make customer satisfaction your priority. A regular review of your customers' buying history and frequency of purchases can reveal some interesting facts about your customers' buying habits. Consider signing long-term contracts with your core clients/customers which will add to your security. Offer a discount for upfront cash payments. The key is to do what it takes to keep your current customers loyal.
5. Re-negotiate with your suppliers, lenders, and landlord:
i) Suppliers: Always keep your negotiations on the level of need, saying that your company has reviewed its cost structure and has determined that it needs to lower supplier costs. . Tell the supplier that you value the relationship you have developed, but that you need to receive a cost reduction immediately. Ask your supplier for a lower material price, a longer payment cycle, and the elimination of finance charges. Also, see if you can buy material from them on a consignment basis. In return for their price concessions, be willing to agree to a long-term contract. Explore the idea of bartering as a form of payment.
ii) Lenders: Everything in business finance is negotiable and your relationship with a bank is no exception. The first step to successful renegotiations is to convince your lenders that you can ultimately pay off the renegotiated loan. You must point out to your lenders why it would be in their best interest to agree to a new arrangement. Showing them your business plan and your action plan that includes your cost-savings initiatives, along with "the how" and "the when" of the implementation of your plan is the best way to achieve this goal. Explain to them that you will need their cooperation to insure that you can survive, as well as, grow your business during the economic downturn. Negotiated items include: the rate of interest, the required security to cover the loan, and the beginning date for repayment. A beginning date for repayment could be immediate, within several months or as long as a year. The key is to realize that your lender will work with you, but that frequent and continual communications with them is critical.
iii) Landlord: Meet with your landlord. Explain your need to have them extend the term of your lease at a reduced cost. Make sure you have a clause in the lease agreement that entitles you to have the right to sublet any or all of the leased space.
6. Re-evaluate your staffing requirements: This is a very critical area. Salaries/wages are a major expense of doing business. Therefore, any reduction in the hours worked through work schedule changes, short-term layoffs or permanent layoffs has an immediate cost saving benefit. Most companies ramped up hiring new employees in the good times, only to find that they are currently overstaffed due to slow sales during the economic downturn. In terms of down-sizing your staff, be very careful not to reduce your staff to a level that forces you to skimp on customer service and quality. Consider the use of part-timers or the current trend of outsourcing certain functions to independent contractors.
7. Shop for better insurances rates: Get quotations from other insurance agents for comparable coverage to determine whether or not your present insurance carrier is competitive. Also, consider revising your coverage to reduce premium costs. The key is to have the right balance-to be adequately insured, but not under or over insured.
8. Re-evaluate your advertising: Contrary to the other cost-cutting initiatives, evaluate the possibility of increasing your advertising expenditures. This tactic realizes the advantage of the reduced "noise" and congestion (fewer advertisers) in the marketplace. The downturn period a great opportunity to increase brand awareness and create additional demand for your product/service offerings.
9. Seek the help of outside advisors: The use of an advisory board comprised of your CPA, attorney, and business consultant offers you objectivity and provides you with professional advice and guidance. Their collective experience in working with similar situations in past economic downturns is invaluable.
10. Review your other expenses: Target an across-the-board cost-cutting initiative of 10-15%. Attempt to eliminate unnecessary expenses. Tightening your belt in order to weather the downturn makes practical, financial sense.
Proactively managing your business through an economic downturn is an enormous challenge and is critical for your survival. However, through well-planned initiatives, an economic downturn can create tremendous opportunity for your company to gain greater market share. In order to take advantage of this growth opportunity, you must act quickly to implement the above best business practices to continue realigning and resizing your company to the current economic conditions.
Copyright © 2008 Terry H. Hill
You may reprint this article free of charge in your newsletter, magazine, or on your website, provided that the article is unedited, and that the copyright, author's bio, and contact information below appears with each article. Articles appearing on the web must provide a hyperlink to the author's web site, http://www.legacyai.com
Terry H. Hill is the founder and managing partner of Legacy Associates, Inc, a business consulting and advisory services firm. A veteran chief executive, Terry works directly with business owners of privately held companies on the issues and challenges that they face in each stage of their business life cycle. To find out how he can help you take your business to the next level, visit his site at http://www.legacyai.com
To download a copy of this article, click on this link: http://www.legacyai.com/Article_Downturn.html.
Role of Merchandising in Today's Advertising
Author: aiolyfe
What part does merchandising play in today's advertising? It is undoubtedly assuming an increased and even new importance. This is in large measure due to the self-service trend in more and more retail stores. This trend has reached the point where "take-it-off-the-rack-at-Klein's" type of selling dominates the food and variety stores and is growing in drug stores and hardware stores. Self-service increases the importance of merchandising. Why? Because now the purchaser is influenced more by point-of-sale material . . . special deals and offers . . . position of stock in store and displays. It is the job of merchandising to have all these factors in favor of your brand, and to achieve superiority to competitive brands.
One surefire piece of strategy is to make sure that the point-of-sale material is a close, direct tie-in with the basic theme and main appeal in the product's consumer advertising.
Nowadays, with the growth of shopping centers and the variety of products carried in these supermarkets, the housewife can emerge with a full line of cosmetics from the food store. Certain marketing facts are assuming a new importance. Suburbs are growing in population. As automobiles grow more common, shopping centers are luring the customer away from former sales haunts by providing ease of parking. For example, about twelve years ago, 90 per cent of proprietary articles in the drug field were sold through conventional drug outfits, i.e., retail drug stores, drug wholesalers, etc. Today, 70 per cent of many of these items are now sold through food stores, supermarkets, etc.
With this trend, the factor of merchandising in the sense of getting display for your merchandise in these supermarkets is of paramount importance. No longer is there a clerk whose loyalty to your sales appeal could assert itself to the customer in your behalf. No, the pay-off nowadays is on the rack in the supermarket; there is where appeal in behalf of your products must pay off. The case for advertising prior to the store visit is being put to the acid test.
How about scientific and technical research? Is this growing in importance? Yes, I believe it is in all areas, not only with the advertiser, but as a tool for the advertising agency as well. Scientific and technical research is the open door looking constantly to the future, years or months ahead of you. Through research, we make constant improvements in old products. Here also we have the discovery of invention of new products. Here's where stability and future growth really stem from. The best commercial bets are those companies and/or organizations which are maintaining and expanding their scientific research in both the area of fundamental research and the area of specific research addressed to specific objectives.
How about marketing research? In these dynamic, changing days, research in the marketing area is more important than ever. It can provide much to check the accuracy of your direction, as well as the accuracy of the results. Figures can be misleading, so be sure this matter of marketing research and the interpretation of its findings are entrusted to the minds of professionals and not to the amateurs.
Should one be concerned with trying to save advertising dollars? I interpret your question to mean the withholding of money from advertising. This will soon prove a false economy. Obviously, a person should make every dollar spent in advertising go further, especially he should make it go further than his competitor's dollar. But never, as long as you have a formula that is working, withhold any possible available money that is earmarked for advertising. Remember, advertising is fundamentally a spending operation, not a withholding one.
Free Web Content Provider | My Articles Directory /
What part does merchandising play in today's advertising? It is undoubtedly assuming an increased and even new importance. This is in large measure due to the self-service trend in more and more retail stores. This trend has reached the point where "take-it-off-the-rack-at-Klein's" type of selling dominates the food and variety stores and is growing in drug stores and hardware stores. Self-service increases the importance of merchandising. Why? Because now the purchaser is influenced more by point-of-sale material . . . special deals and offers . . . position of stock in store and displays. It is the job of merchandising to have all these factors in favor of your brand, and to achieve superiority to competitive brands.
One surefire piece of strategy is to make sure that the point-of-sale material is a close, direct tie-in with the basic theme and main appeal in the product's consumer advertising.
Nowadays, with the growth of shopping centers and the variety of products carried in these supermarkets, the housewife can emerge with a full line of cosmetics from the food store. Certain marketing facts are assuming a new importance. Suburbs are growing in population. As automobiles grow more common, shopping centers are luring the customer away from former sales haunts by providing ease of parking. For example, about twelve years ago, 90 per cent of proprietary articles in the drug field were sold through conventional drug outfits, i.e., retail drug stores, drug wholesalers, etc. Today, 70 per cent of many of these items are now sold through food stores, supermarkets, etc.
With this trend, the factor of merchandising in the sense of getting display for your merchandise in these supermarkets is of paramount importance. No longer is there a clerk whose loyalty to your sales appeal could assert itself to the customer in your behalf. No, the pay-off nowadays is on the rack in the supermarket; there is where appeal in behalf of your products must pay off. The case for advertising prior to the store visit is being put to the acid test.
How about scientific and technical research? Is this growing in importance? Yes, I believe it is in all areas, not only with the advertiser, but as a tool for the advertising agency as well. Scientific and technical research is the open door looking constantly to the future, years or months ahead of you. Through research, we make constant improvements in old products. Here also we have the discovery of invention of new products. Here's where stability and future growth really stem from. The best commercial bets are those companies and/or organizations which are maintaining and expanding their scientific research in both the area of fundamental research and the area of specific research addressed to specific objectives.
How about marketing research? In these dynamic, changing days, research in the marketing area is more important than ever. It can provide much to check the accuracy of your direction, as well as the accuracy of the results. Figures can be misleading, so be sure this matter of marketing research and the interpretation of its findings are entrusted to the minds of professionals and not to the amateurs.
Should one be concerned with trying to save advertising dollars? I interpret your question to mean the withholding of money from advertising. This will soon prove a false economy. Obviously, a person should make every dollar spent in advertising go further, especially he should make it go further than his competitor's dollar. But never, as long as you have a formula that is working, withhold any possible available money that is earmarked for advertising. Remember, advertising is fundamentally a spending operation, not a withholding one.
Free Web Content Provider | My Articles Directory /
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