Here is a newsagency business performance report I did last week. I have been very tough on the owners because I know they can do considerably better. They asked for the assessment because of what they would lose if they sold the business on the current numbers.
The suggestions in this assessment could apply to many newsagencies.
Thanks for the opportunity to look at your business performance data.
Comparing July to September 2013 with 2012 I can see that the business is marking time. On first review, the number of sales is flat and revenue is up 2%. If I take out your ticket sales department I get a different picture.
In my comments I’ll be direct and this may come across as being rude. Please don’t be offended. If I’m rude it’s because the business performance data makes me be that way.
It is important when looking at business performance data that you look at the data that matters. In your case, core product departments of magazines, cards, gifts and stationery matter the most.
It seems to me from the data that you are running an average newsagency for the regional situation you have. While your numbers are not awful they are nothing special. If you want to sell your business then you need to make it appealing, appealing on the shop floor and in your performance numbers. The only way to do this is for you to be above average.
This is a key message I have for you. For you to get what you want, a good sale price for your business, you need to be above average in everything you do.
Here is where I would start based on my assessment of your business.
- Lead. You need to lead the business. Set the agenda, decide what the business stands for and live this with every decision. Your business data tells me you are not doing this as performance is barely average.
- Stand for something. Your business appears to be boring based on what you’re selling. Nothing is shining. For example, Gifts account for 1% of your sales and tobacco 29.75%. Are you happy with being a tobacco shop? If so they knock yourself out. If not you need to sort out what you stand for and embrace that.
- Own your business. This ties into my last point. You;re smart and creative people based on displays I have seen. You understand the importance of engaging with your shoppers through terrific displays. These displays were created to win points or prizes from suppliers. THE MOST IMPORTANT PRIZE YOU WILL WIN IS THE CHEQUE YOU GET FOR SELLING THE BUSINESS. Create displays that chase more value for your business and not a supplier prize. Think abut this very carefully. What works for you? Look at your customers and what they buy and think about what you can promote and how to get them spending more.
- Operating costs. Make sure your roster is lean. You also need to make sure that every hour you pay for is efficient and financially valuable for the business.
- Cards are 6% of sales yet they are just about the best margin product you have. Your sales are down 4%. What are you doing to arrest that decline. Based on the channel average your card sales should be up. Your data is poor too with 23% of your card sales in unknown category. That’s not acceptable as you can’t manage what you are not measuring!
- Magazines are interesting. Overall sales are down but your craft, food and special interest categories are performing very well. Notice what you are dong with those categories? If it is anything special what can you apply to other magazine categories? Your magazine range is a key point of difference for you in your centre and nearby so getting magazines right gives the business a good foundation.
- Stationery is odd. It accounts for 3.73% of sales yet it accounts for 27% of data categories you track? Why so anal about tracking stationery when sales are down 9%. Your measuring of stationery performance is not helping you manage the business otherwise sales would be better. What is odd is your apparent pen sales. These should be a third of stationery sales yet they are not. They are a fraction of that. Maybe they are in the 11% of stationery in unknown category, stock you are not tracking.
You can do better than this I am sure of it. I think you need to act urgently on your cost base, your leadership of the business, decluttering and making the business stand for something. You need to create a shop that’s attracting people for more that magazines, cigarettes and western union. You need people seeking your store out for higher margin product that you are KNOWN FOR in the area.
What you need to do is hard. Hard because it’s hard work and hard because you have to reinvent your business within the cash-flow resources of what you are doing today.
One option for you to consider is a make over. Set a budget for new stock, I’d suggest around $5,000. I and some colleagues can order stock based on the knowledge of what is working. We can come in and in a day move the shop around and create a new experience and quit what needs to be quit – all at once and all with some urgency. But you can also do this for yourself.
If you want to sell your business for more…
- Sell more higher margin product.
- Sell more to every shopper.
- Charge more for every item possible without impacting sales.
- Cut your costs.
- Get customers talking about your business in a good way more.
You can deal with the situation by being a victor or by being a retailer. Choose to be a retailer. I know you can do it.