Help

The Economy and Budgets

Help! The owners of our shop decided that the economy was causing financial difficulty and cut our pay. We understood the situation and agreed although we did not like the decision. One day, I overheard a conversation between the owners. They were commenting that the next pay cut would have to come from them. Don’t you think they should have been included in the initial cut?
Absolutely! Your letter is upsetting and the actions of your shop owners are disgusting. Whenever negative adjustments (especially pay cuts) need to be implemented, management should be the first to step up and face the music. I have seen too many instances where the employees are poorly treated yet expected to arrive on the job with a happy smile and a bubbly attitude. I can’t imagine any scenario more frustrating for those expected to “suck it up” and do the job while management remains unscathed. Does your management listen to the news or read the papers? Aren’t we experiencing this on a much larger scale worldwide?
I once read a quote that said, “You can take my merchandise, my equipment, my building, and my property and I will return with a bigger and better company. However, if you take my people, I am ruined.” I don’t recall who made that statement but it is sound advice for focusing on the importance of good people.
Unfortunately, you are in an awkward position. Do you tell your management that you overheard the conversation and risk serious confrontation? Considering the economy, I would not take on management at this time. However, I would begin looking for other employment. It may take you time to find a new position but it may be the only way you can keep from letting this bad situation “eat you alive.”

 
Help! How can we survive this economy? Every day the news is worse. Our business is slightly ahead of last year but we do not know if we can hold onto the increase long-term.
First of all, let me congratulate you on your success. I do not know how long the economic situation will last. Actually, I can’t find any two financial experts who can shed any credible light on the subject either. When the economy takes a wrong turn, I have one philosophy, get back to the basics. Review your financial reports carefully. Look for areas that can be trimmed. Evaluate every program. Check your insurance programs to see that you have adequate coverage and that your premiums are competitive. Long-term programs that have not been checked for competitiveness can take a chunk out of your bottom line. Check your utility usage and challenge any unusual statement charges. Do the same with your telephone bill and your Internet service. Don’t forget to review your charge card processing program. “Price creep” is a normal practice and you may find that you are getting a great initial rate but paying hidden charges that make your rate quite high.
Whenever you find that a program is not competitive, you should strongly consider making a change. However, do not change just for the sake of saving a few pennies. You must “compare apples to apples.” Once you are satisfied that a new program is in order, make the change (after you have completed your homework on the new plan)! Many times changes are not made because the paperwork takes too much time and no one wants to sit down and do the fine tuning. This expense analysis new application processing may be the difference between you succeeding or closing your doors.
After you have completed a detailed analysis of your expenses, look at the image you are presenting to the customer. This type of analysis includes reviewing your employees, employee programs, policy manuals, and other tools that you use to convince your customers that your establishment is the place to shop. Evaluate your marketing and advertising programs. Now is not the time to eliminate them. You may not have the dollars to increase your budget, but eliminating your exposure to the customer may deal you a fatal blow as customers respond to other businesses who do advertise. Fine tune your program and keep your name out there!
Walk through your shop as a customer. Do you have old merchandise? Do you have “shop-worn” samples on display? If so, get out your scalpel and mark those goods down. Turn any slow selling or worn merchandise into cash. Check your stock room carefully. Is all of your merchandise on display?  If you find leftover seasonal merchandise, mark it down and get rid of it.
If you are not a good negotiator, it is time that you correct that weakness. When you attend markets or work with sales reps in your shop, remember this rule: “If you don’t ask, you don’t get.” The most important thing to remember is that if you have any doubts about the salability of an item, category, or product line, move on to something else. If you find that some vendors are not flexible, seek out those who are. In order to succeed in this economic climate you have to be a fighter. I am not suggesting that you treat vendors unfairly. I am advising that you work closely with all vendors of interest to find a “win-win” solution to each obstacle you encounter.
Our country has weathered many economic downturns. I agree that this current downturn is at an intensity most of us have not experienced. However, I am confident that we will see a turnaround and we will move into positive territory once again. I just can’t predict when that turnaround will begin. That is why I suggest going back to the basics. There are many companies who share a long history of being in business. They succeeded by staying on top of their business, meeting their completion “head-on,” and treating their employees as valued members of the business.
These are the major areas that I would concentrate on as I analyzed my business. You may have to make some difficult decisions as you uncover various challenges. If you do, do not postpone making such decisions. Now is not the time for procrastination hoping that things will improve. Getting “lean and mean” will put you in a stronger position to grow once the economy turns back to being positive.
The information that I just shared with you is found in a well constructed business plan. If you do not have a plan, I strongly suggest that you create one. I do not believe that any business should function (or attempt to function) without a business plan. Once you have created your plan, work it! You may have heard the old expression, “Plan your work and work your plan.” I have met with many people who have developed wonderful plans that have been enthusiastically received by their management and their bank officials. Then, after the initial fanfare has died down, the plans are put on a shelf, never to be looked at again. This is usually because someone on the management team is either threatened by the plan or he or she does not know how to work with a plan. This type of attitude is destructive and is a disservice to all employees. Take your plan seriously and remember, plans are not cast in stone. You should review your plan every thirty days and adjust it according to the performance it is revealing. Having these tools in place will put you light-years ahead of anyone who is ignoring this very important element of business.

Help! I followed your advice and increased the time I spent at the mid-year markets so that I could attend various seminars. Unfortunately, most of the seminars were “the same old same old” and others were facilitated by people whose ideas were nice...for them. Some were such celebrities that their concepts were beyond my reach. Other programs involved panel discussions whose members were not in sync with the audience. Most seminars had very few people in attendance. What can you do to strengthen these programs?
I apologize for giving you the impression that I have anything to do with the programming of seminars at any trade show. Each management team controls their own venue and schedules their own seminar facilitators. I do follow the programs carefully and understand your frustration. In some instances, presenters did speak over the heads of the participants or failed to address the issues facing the average independent retailer. In other instances, the presentations were too generic to be meaningful. Some panel discussions were not effective because the panelists did not experience some of the difficulties that were troubling their audience.
The best solution to this challenge is for you to contact show management directly. Be specific in your request by detailing the difficulties you are experiencing in your business and provide subject titles for consideration. If you are able to suggest specific presenters, it may help since show management does want you to have a good experience at their venue. The low attendance could be the subject matter or the timing. There are times where programs have been planned towards the end of a show period in the hope of keeping the buyers on the premises longer. Obviously, it did not work in the instances you describe.

 Help! Our hospital gift shop organization has eliminated workshops and seminars. In addition, they are trying to eliminate our attendance at gift shows in lieu of attending our own regional show. I do not think this is a good strategy.  What is your opinion?
A day does not go by that I do not learn something from someone. I even attend workshops to learn new methods for conducting presentations and keeping my audience interested. It sounds like your organization believes it has reached the pinnacle of success and has no further need of learning. In addition, the focus on your own show tells me either there is some sort of power base being built or there are budget issues. My experience tells me that your group is headed for disaster.
I conduct quite a few seminars for hospital gift shops and I can tell you that the participants are like sponges. They are hungry for information, ask very pertinent questions, and are enthusiastic about doing a good job. They are fun to work with and their various situations are challenging. Workshops and seminars not only provide a forum for meeting and conversing with an expert, they prove a wonderful opportunity for the various attendees to network amongst themselves.
I have attended many hospital gift shop shows and I think they are great opportunities for meeting vendors and negotiating group purchases. However, in all due respect, they do not begin to replace the opportunities available at any major or regional trade show. While it is true this same networking can take place at a private function such as you describe, nothing beats networking at a major market where a wider variety of vendors can be engaged in creating meaningful programs. Major trade shows also provide opportunities to meet industry experts, learn merchandising techniques, and fine-tune purchasing and negotiation skills. Please show this letter to your supervisor and invite him or her to contact me directly. I welcome the opportunity to continue this very important discussion.

Help! I would like to invite you to visit our shop and give us your honest opinion of our selection and service. Since you are only a few minutes from our location, I hope you will take us up on this invitation.
Thank you for the invitation to visit your shop. I was in your store last Wednesday but decided to keep my visit quiet and write to you with my “report.” I thought the “mystery shopper” approach would give me a more accurate picture of your business (I also thought that is what you really wanted).
I have some good news and some not-so-good news. Let’s address the not-so-good news first. I found your sales associates to be short-tempered and in some instances downright rude. I watched as one customer asked to have an item gift wrapped. The sales associate snapped, “We only put a ribbon around it!” A better response would have been, “We put a nice ribbon on your purchase. Let me show you the ribbon colors that we have.” In another situation, I watched as another sales associate lectured a customer on the use of an in-store coupon. The associate was so rude that I would have just left the store without making a purchase. In general, the sales associates never greeted any customer during my hour-long visit. They remained behind the counter waiting for customers to approach. Then, they rang up the sale, stated the total amount, made change, and sent the customer on her way. I found friendlier service at the local supermarket.
Now to the good news. Your store was the most creatively displayed that I have seen in a long time. Your merchandise was timely and fresh. Your assortments were varied and you had an excellent mix of promotional and regular priced merchandise. Your price points were good and your signage was clear and professional. I do not doubt that you do a brisk business since I could find merchandise for just about any occasion. I would bet that you will dramatically increase your sales if you correct the sales associate attitude problem. A smile goes a long way. Lectures belong in school or at training venues. I like to shop where I feel appreciated. I like to leave a store with a smile on my face. I would like to visit your store again in six months... if you want me back.

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