Based on contact from newsagents since the Fairfax announcement of Monday it is clear there are plenty who had not been planning for the scope of change which is forecast in the Fairfax investor presentation. Yes, print is not dead, but its future is more challenged today than last week.
There are newsagents still running very traditional businesses – retail, distribution and retail and distribution. These folks need to move quickly. They are in a race with a tsunami of change. Yeah, tsunami is the best analogy I can use for what is happening. In fact, multiple tsunamis as I explained in the Newsagency of the Future workshops recently.
For what it’s worth, I think the most important action all newsagents can take today, as a matter of urgency, is to reduce debt. If News Limited makes the announcement some expect, this coupled with the Fairfax announcement would be noticed by banks. Newsagents will be better off if they reduce their debt levels of their own accord than under a plan forced on them by their banks. Less debt will offer more options.
If you are not sure where to start in reducing debt then you are already behind in the race. Here are some tips for immediate attention:
- Look at your roster. Is every hour of paid labour necessary? can you improve efficiency and through this cut costs?
- Take care with buying. Personally approve all orders. Be more demanding of your suppliers.
- Look at your own spending. An extra $100 off your debt this week is more important than a meal out.
While debt is only part of what newsagents should be working on it is the most important given that you are relying on your bank and their risk assessment. I know of a couple of banks that have changed their position in relation to newsagencies this year – for dumb reasons I would add.
Banks are looking at all business sectors but retail in particular because of what is happening online and what has been happening and is continuing in Europe.
If your debt is under control (less than 30% of the reasonable value of your business today) then the broader business plan can and should be be considered. If you’re in distribution it has to be finding ways to use your infrastructure to generate more income. If you’re in retail it has to focus on broadening the appeal of your shop – bringing people in for more reasons than currently, making the shop floor more successful at driving people to purchase more in each visit and reviewing your pricing to ensure that you are making the maximum gross profit on each item without harming sales.
Newsagents who open their doors each day without a plan to increase traffic, drive sales efficiency and reduce costs face the toughest challenges in this disrupted world.
No one will solve these challenges for us, nor should they. We own our situation … that’s what being the business owner is all about.