This Tom Shay presentation guides participants through multiple aspects of successful small business management. www.profitsplus.org

1. Tom Shay, CSP
Certified Speaking Professional

2. Tool #1
• Ownership/management structure
– Establish a written chain of
command
– Develop job descriptions and job
specifications
– Utilize incentives to give your staff
a reason to excel

3. Tool #1
• Ownership/management structure
– Have a continual staff
education program
– Test your staff by word
and action

4. Tool #2
• “Open to buy” planning
– What an “Open to buy” is

5. Traditional Inventory & Sales

6. Desired Inventory & Sales

7. Tool #2
• “Open to buy” planning
– Chart as a %, by department and
fineline, the sales within your
business according to month
– Chart as a %, your inventory on
hand, month by month, according
to the same parameters

8. Tool #2
• “Open to buy” planning
– Compare the percentages of sales
and inventory to see where you
are getting the most sales for
your inventory investment
– Calculate where and
when you need to
shift inventory

9. Tool #2
• “Open to buy” planning
– Use the open to buy calculator to
determine how much and when to
invest your inventory dollars
– There is an “Open to Buy” template
on the Profits Plus website

10. Tool #1

11. Tool #3
• Theft control
– Average non-professional
thief: 1.6 times per week
– Average item is $55
– Caught 1 in 48 times
– 70% unplanned

12. Tool #3
• Theft control
– Shoplifting control
– Office audit control
– Delivery control
– Hiring process
– “What one thing would
your former employer tell me about
you?”
– Personal schedule variety

13. Tool #4
• Advertising/promotion plan
– Establish a budget on an annual
basis
– Determine what media you want to
use for your advertising as
compared to being “sold to” by a
local media sales representative

14. Tool #4
• Advertising/promotion plan
– Allocate a portion of your budget
that will be spent exclusively for
unique ways of inviting your
existing customers to continue to
do business with you
– Plan your work, and work your
plan

15. Tool #4
• Advertising/promotion plan
– Do not become “wedded” to an
idea and stay with it too long
– There is an advertising,
marketing and promotion planner
on the Profits+Plus website

16. Tool #1

17. Tool #5
• Business and marketing plan
– Statistically know in great
detail who your customer is
– How are you locating
your end user customers?
– Can you describe
them?
– Where do they live?

18. Tool #5
• Business and marketing plan
– In comparison, locate demographics
which define your marketplace
– Is there a match?
– Identify the competition and
become well versed in
their business

19. Tool #5
• Business and marketing plan
– Have a plan as to where your next
sales growth is going to come from
– Develop your “elevator speech” and
share it with your staff

20. Tool #6
• Technology usage
– Review the detail in which you are
tracking the sales of your business
– Shop to determine
if the software
package you are
currently using is
still the best one
for your business

21. Tool #6
• Technology usage
– Utilize all of the modules within the
software package
– Is your software package
an integrated system?

22. Tool #6
• Technology usage
– Have a computer
technician examine
your hardware to
make sure you are
getting the
maximum utilization
and speed

23. Tool #6
• Technology usage
– If not an annual inventory,
implement a sequential sectional
inventory

24. Tool #7
• Pricing strategy
– Everyday sale
price items
– Price sensitive
items
– See addendum
#1

25. Tool #7
• Price Sensitive Items
1. Has a “sister” product that can be an
everyday sale price item
2. The same item, but in a different
size/color, is an everyday sale price
item
3. Has additional benefits/features
that can be easily demonstrated
or explained
4. Not sold in mass merchants

26. Tool #7
1. Not advertised by competition
2. Solves a problem/need better than
the product asked for
3. Scores 3 or less on the 8
remaining blind price item list
4. Quality is immediately proven
by way of manufacturer name

27. Tool #7
• Pricing strategy
– Blind price items
– See addendums #2 & #3

28. Tool #7
• How do you determine a blind
price item?
1. Takes extra time to price
2. Requires extra handling for the
customer
3. Is a natural “add on” sale item
4. Seldom used
5. Is a repair or replacement item

29. Tool #7
6. Has luxury or status appeal
7. Is seldom promoted
8. Is not a seasonal item
9. Is a recreational item
10. Not sold in mass merchants

30. Tool #7
• Score one point for each yes
answer. Possible margins are:
– 1 to 3 points: 40% - 45%
– 4 or 5 points: 46% - 55%
– 6 points: 56% - 60%
– 7 points: 61% - 65%
– 8 - 10 points: 66% - ?

31. If you
raise
And your current gross margin is:
your
price:
10% 15% 20% 25% 30% 35% 40% 50%
5% 33.3 30.0 25.0 16.7 14.3 12.5 11.1 9.1
6% 37.5 28.6 23.1 19.4 16.7 14.6 13.0 10.7
7% 41.2 31.8 25.9 21.9 18.9 16.7 14.9 12.3
8% 44.4 34.8 28.6 24.2 21.1 18.6 16.7 13.8
10% 50.0 40.0 33.3 28.6 25.0 22.2 20.0 16.7
11% 52.4 42.3 35.5 30.6 26.8 23.9 21.6 18.0
12% 54.5 44.4 37.5 32.4 28.6 25.5 23.1 19.4
15% 60.0 50.0 42.9 37.5 33.3 30.0 27.3 23.1
16% 61.5 51.6 44.4 39.9 34.8 31.4 28.6 24.2
18% 64.3 54.5 47.4 41.9 37.5 34.0 31.0 26.5
20% 66.6 57.1 50.0 44.4 40.0 36.4 33.3 28.6

32. Tool #1
Changing Prices Ca

33. Tool #7
• Pricing strategy
– Promotional price items
– Variable pricing techniques
– See addendum #4

34. 24 Cent Pricing System
Cost You add Old Add 24 Round Minimum
Retail cents up to Margin
.01-.10 .10 .20 .24 .49 80.00%
.11-.15 .15 .30 .24 .59 75.00%
.16-.20 .20 .40 .24 .69 71.00%
.21-25 .25 .50 .24 .79 68.00%
.26-.30 .30 .60 .24 .89 66.00%
.31-.35 .35 .70 .24 .99 65.00%
.36-.40 .40 .80 .24 1.09 63.00%

35. Tool #7
• Pricing strategy
– $2.00 to $9.99
.29 .49 .79 .99
– $10.00 to $19.99
.99
– $20.00 to $49.99
$_1.99 $_2.99 $_4.99 $_6.99 $_7.99
$_9.99
– $50.00 and above
$_2.99 $_4.99 $_7.99 $_9.99

36. Tool #1

37. Tool #8
• Cash flow management
– Understand the basic terminology of
accounting
– Cash basis vs. accrual
– Current assets vs. long term
– Current income, retained
earnings, stockholders equity

38. Tool #8
• Cash flow management
– Be able to read a balance sheet and
a profit and loss statement
– Create budgets for each of the line
items of your profit and loss
statement
– Review monthly

39. Tool #8
• Cash flow management
– Utilize a cash flow statement

40. Tool #1

41. Tool #8
• Cash flow management
EZ Cashflow (TM) Cash Basis
For Month Ending: 1/31 2/28 3/31
Cash Balance, Beginning of Month P/C 17,500 9,445 (14,627)
Net income (Loss) C (4,585) (9,400) 4,465
Add:
Cost of Goods Sold C 39,370 41,275 44,450
Less:
Inventory Purchases of Previous Month P 42,000 54,850 47,500
Freight In of Previous Month C 840 1,097 950
Principal Payments on Loans P - - -
Cash Balance, End of Month C 9,445 (14,627) (14,162)

42. Tool #8
• Cash flow management
– Update your cash flow statement
each month

43. Tool #9
• Self preservation and improvement
– Develop an advisory board and find a
mentor
– Take time to rest yourself
– Recharge yourself by way of trade
shows, conferences and books

44. Tool #1

45. Tool #9
• Self preservation and improvement
– You cannot fly your business alone
– Take the credit, take the blame,
and know when to say when

46. The 9 Piece Toolbox
• Are all of the tools in your
toolbox?
• Are they kept in top condition
for peak performance?

47. A wise man will
make more
opportunities than
he finds.
- Francis Bacon

48. Final Note
• This presentation will be specialized
to your industry and your
attendees’ specific needs.
• For more information about having
Tom present for you, contact us
at (727)464-2182 or visit our
website: www.profitsplus.org