Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

In 2018, make every day your payday

Mark Fletcher
January 12th, 2018 · 6 Comments

For several years, I have written that newsagents need to make every day their payday.

This is an important message as it focuses on the goal of driving business value. Too often, I see retailers working about, being focussed on, the wrong things, things that do not directly affect business value.

As 2018 gets under way, I am pitching this again, with revisions.

Make every day your payday.

There was a time when small business retailers could rely on selling their business for a handsome increase on the price they paid thereby providing a good pay day, when businesses sold for a good multiple of net earnings.

No more. Today, the best way to extract value from our businesses is to make every day your pay day, to not rely on your pay day being the day you sell the business. In fact, the typical newsagency today will sell for somewhere between 1.l5 and 2 times actual net profit as shown in the business P&L.

The P&L matters as this is what you need to be guided by in all business decisions and actions.

The challenge is how do you do this?

Retailers need to look at their businesses differently. This starts with the mindset of every day being your pay day. Each decision needs to be considered in this context, in the context of the P&L impact.

Focusing on profit today will give you a better result today and make your business more valuable tomorrow.

Here are some suggestions for making every day your pay day:

  1. Run with the leanest roster possible. Just about every retail business I review has capacity to lower labour costs. In a typical newsagency, one hour saved today is worth between $75.00 and $100.00 in revenue.
  2. Ensure you can sell when the business is closed. Yes, this means sell online.
  3. Promote the business outside your usual foot traffic area … increase your customer base.
  4. Promote your business outside the brand people know you as. or example, online pitch under a brand other than your newsagency brand.
  5. Have your best people working the floor, helping customers spend more.
  6. Have stunning displays that attract people from outside the shop.
  7. Have compelling displays in-store that encourage people to browse beyond their destination purchase.
  8. Always have impulse offers at high traffic locations.
  9. Charge more every time you can. Loyalty programs such as discount vouchers, bundling into hampers, multi buys such as 2 for 3 and other opportunities enable you to do this by blocking price comparison.
  10. Buy as best you can.
  11. Grab settlement discounts every time you are able.
  12. Measure product category performance by gross profit. Quit the categories that are not paying for themselves.
  13. Promote outside your store using online and social media opportunities.
  14. Leverage adjacency information. Chase a deeper basket – people purchasing more each visit.

Be responsible for the profitability of your business. Don’t blame your suppliers, your landlord, your employees or some other external factor … it all comes down to you – the decisions you make and the actions you take.

If you relentlessly pursue profit with a clear focus you are likely to see profit grow. That’s better than waiting to make money when you sell because that’s less likely to happen in this market.

Doing all this relies on your measuring the performance of your business. The Tower software helps with this. It is easy.

26 likes

Category: Newsagency benchmark · Newsagency management · newsagency marketing · newsagency of the future · Newsagency opportunities

6 responses so far ↓

  • 1 Ben // Jan 13, 2018 at 12:23 PM

    Well said Mark. 2018 is the year for those who want to to Shine! Make our mark and our customers will love us for it.

    0 likes

  • 2 Amanda // Jan 23, 2018 at 8:42 AM

    Is anybody still doing books in 2018?

    Its something we did but got out of 10years ago because of increasing competition. It seems competition in books has decreased in the past 5 years with those super book stores like Borders going under.

    Just wondering if newsagents are still selling books and if so are sales still good?

    0 likes

  • 3 Mark Fletcher // Jan 23, 2018 at 8:55 AM

    Books do well. Having the right product is key as is how you pitch them.

    2 likes

  • 4 jenny // Jan 23, 2018 at 2:53 PM

    Amanda we are doing books, not a wall of them but counter unit ($14.99) and various small and large hard cover books amongst our gifts. I’m happy with the sales.

    1 likes

  • 5 Colin, Malvern SA // Jan 23, 2018 at 4:29 PM

    Amanda,

    Competition is still fierce in book selling.

    We reintroduced books several years ago. Growth is good. We avoid best sellers and treat books as gifts.

    If you have gift areas you specialise in, then there will be books you can add to enhance those ranges.

    1 likes

  • 6 Amanda // Jan 23, 2018 at 8:13 PM

    Thanks Mark, Jenny and Colin.

    Stationery is in constant decline for us with BigW and Officeworks to compete with, so we are looking at giving books another go. We don’t have a book store to compete with in the centre so will take a closer look at the category again.

    0 likes

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