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Newsagency transformation (part 1): where do you start?

If you want to change your retail newsagency business, no matter whether it is a traditional newsagency or one that has already seen some transformation, it starts with being sure of where you are at, it starts with your data.

Knowing where the business is at is the foundation of steps forward. This involves looking at the business from a range of angles.

  • Up to date profit and loss statement.
  • A current debtors report and a current creditors report.
  • A list of all monies owed by the business, both formal and informal.
  • Stock listing showing total value of stock.
  • Dead stock listing showing all items for which zero sales have been recorded in six months or more – showing the total value of this stock.
  • A floor map showing gross profit percentage contribution by product department / category floorspace allocation.
  • Total rostered hours in a week, including owners regardless of whether they are paid, and a calculation on revenue per hour.
  • a revenue comparison down to the category level comparing the most recent 6 months with the same 6 months a year earlier.

It’s not enough to say you want to transform your business, you need to understand where you are at and the capacity for change. The above information will provide insights as to immediate opportunities as well as the capacity of the business to fund the cost of change. This list is the starting point of what I ask for from any business I work with on transformation.

In looking through the pool of data from this list, my recommendation is to seek our easy wins that can set up for productive focus next. For example, if there is $10,000 or more in dead stock and all of that stock has long since been paid for, quit it. The freed cash and space will give you a boost. Now, to quit the stock, place it in one location, a clearance location. It could be a table, or two or more. Put it together with the same discount for all. My suggestion is 50%.

While you are quitting dead stock, work through the rest of the data to understand the business performance as it stands today and look at the comparison report for any easy green shoot opportunities you can see allied to current business categories. This could provide you with an easy first step.

As you work through your data, make a list of ideas, action items. It could be that on that list there are some easy wins you’d not seen before or had been ignoring.

Some retailers I have spoken with over the years about business transformation or improvement have been tempted to use their accountant to guide them. I think this is a mistake unless the accountant has current hands-on retail experience in your type of shop. Others have been keen to use a business consultant. Unless they have current retail experience in your area, I’d not engage with them.

My point here is that it’s your business. You are at a point of wanting change, transformation. The next steps are up to you and best done by you so that you own the changes.

This first step starts with gathering the data, cleaning house and getting fit.

All of this work is about getting you match fit for more considerable change, that comes next.

Footnote: I’ve owned newsagencies since 1996. I’ve been a Director of newsXpress since 2005. I started Tower Systems in 1981. While I am no guru, I have had a range of experiences that have helped me see the value of changing our businesses, transforming them beyond the traditional and doing so on a minimal budget. If you are embarking on the transformation and what to talk to someone, I’m here: mark@towersystems.com.au or 0418 321 338.

Newsagency management

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