Australian Newsagency Blog

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

Look carefully at revenue at the start and end of the day

Mark Fletcher
September 19th, 2018 · 2 Comments

Talking with a newsagent recently about labour costs in their business and reviewing their data we could see that between 5am and 7am on the six days they were open they lost close to $200.00 a week.

They had two staff on for security reasons. The nature of the business, its location and management practices meant the early morning retail staff did not have much of value to do. This meant we could only judge the value of being open against revenue.

Digging deeper, we reached a first-step conclusion that the opening of the shop should be pushed back to 6am. This will more than  halve the loss given the revenue in that first hour.

What was interesting to me was the reason they continued to open early despite clear losses.

They were worried about upsetting the few customers who came in early. These were low margin value customers, customers buying products with low margin products and not shopping the rest of the shop then or at any other time.

They were worried about the negative comments in the community.

This had been the case for several years. Combined losses through the period of concern and inaction had mounted to in excess of $43,000 from these two hours of the day. My question to the owners was: has it been worth $43,000 to not act because of worry about what a few customers might say? Of course, the wander was no.

Only you can know if you opening and closing hours should be adjusted in your business. My advice is to first-up look at it as a purely commercial decision, so that you are sure of the numbers and what the financial decision should be.

The most common discovery in looking at businesses that are challenged is in labour management. Either the labour cost is too high for the business or wrong people are in some roles.

Data can be valuable in making changes. the key is to not over think the changes. Make a step, measure, assess and adjust if necessary. The alternative is you think, worry, think, worry and not do anything until you discover the inaction has cost you tens of thousands of dollars.

17 likes

Category: Newsagency management

2 responses so far ↓

  • 1 er // Sep 19, 2018 at 2:32 PM

    i wish i could close from 2.30 to 3.00 for Siesta

    2 likes

  • 2 Graeme // Sep 19, 2018 at 9:03 PM

    er
    Just close your eyes and don’t think about it.
    Pretend your in Spain.

    0 likes

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