Take a piece of paper and sketch out the floor plan of your shop by department. Write into each the average margin % for each department. Then, write in the $margin you have made over the last year.
While this may seem like basic business training, newsagents I have done this with are often surprised by what they discover. Especially when they note down the labour and real-estate cost by department on the plan. And even more so when they compare the current year with the previous year.
Newsagents with computer systems can do this easily – I know that our Tower software does, it’s the Business Analysis Report, anyone can get the data with a calculator and a bit of time.
We control the growth of our newsagencies by how much time and capital we invest in the various categories. Our attention on one department over another ought to be driven by the returns achieved. Take greeting cards, newsagents spend little time on what is often the most profitable department.
What does your floor plan show? Are you respecting the most profitable department with your resource allocation?
Funny you should mention cards. We spend at least an hour a day tidying and making sure the cards look good for this particular reason.
Cards are the hero department in newsagencies yet most newsagents do not engage with the opportunity on the shop floor.