The 9 Piece Tool Box By Tom Shay

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This Tom Shay workshop helps a small business owner or manager develop the strategies necessary to strengthen their business.

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The 9 Piece Tool Box By Tom Shay

  1. 1. Tom Shay, CSP Certified Speaking Professional
  2. 2. Tool #1 <ul><li>Ownership/management structure </li></ul><ul><ul><li>Establish a written chain of command </li></ul></ul><ul><ul><li>Develop job descriptions and job specifications </li></ul></ul><ul><ul><li>Utilize incentives to give your staff a reason to excel </li></ul></ul>
  3. 3. Tool #1 <ul><li>Ownership/management structure </li></ul><ul><ul><li>Have a continual staff education program </li></ul></ul><ul><ul><li>Test your staff by word and action </li></ul></ul>
  4. 4. Tool #2 <ul><li>“ Open to buy” planning </li></ul><ul><ul><li>What an “Open to buy” is </li></ul></ul>
  5. 5. Traditional Inventory & Sales
  6. 6. Desired Inventory & Sales
  7. 7. Tool #2 <ul><li>“ Open to buy” planning </li></ul><ul><ul><li>Chart as a %, by department and fineline, the sales within your business according to month </li></ul></ul><ul><ul><li>Chart as a %, your inventory on hand, month by month, according to the same parameters </li></ul></ul>
  8. 8. Tool #2 <ul><li>“ Open to buy” planning </li></ul><ul><ul><li>Compare the percentages of sales and inventory to see where you are getting the most sales for your inventory investment </li></ul></ul><ul><ul><li>Calculate where and when you need to shift inventory </li></ul></ul>
  9. 9. Tool #2 <ul><li>“ Open to buy” planning </li></ul><ul><ul><li>Use the open to buy calculator to determine how much and when to invest your inventory dollars </li></ul></ul><ul><ul><li>There is an “Open to Buy” template on the Profits Plus website </li></ul></ul>
  10. 10. Tool #1
  11. 11. Tool #3 <ul><li>Theft control </li></ul><ul><ul><li>Average non-professional thief: 1.6 times per week </li></ul></ul><ul><ul><li>Average item is $55 </li></ul></ul><ul><ul><li>Caught 1 in 48 times </li></ul></ul><ul><ul><li>70% unplanned </li></ul></ul>
  12. 12. Tool #3 <ul><li>Theft control </li></ul><ul><ul><li>Shoplifting control </li></ul></ul><ul><ul><li>Office audit control </li></ul></ul><ul><ul><li>Delivery control </li></ul></ul><ul><ul><li>Hiring process </li></ul></ul><ul><ul><li>“ What one thing would your former employer tell me about you?” </li></ul></ul><ul><ul><li>Personal schedule variety </li></ul></ul>
  13. 13. Tool #4 <ul><li>Advertising/promotion plan </li></ul><ul><ul><li>Establish a budget on an annual basis </li></ul></ul><ul><ul><li>Determine what media you want to use for your advertising as compared to being “sold to” by a local media sales representative </li></ul></ul>
  14. 14. Tool #4 <ul><li>Advertising/promotion plan </li></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>Plan your work, and work your plan </li></ul></ul>
  15. 15. Tool #4 <ul><li>Advertising/promotion plan </li></ul><ul><ul><li>Do not become “wedded” to an idea and stay with it too long </li></ul></ul><ul><ul><li>There is an advertising, marketing and promotion planner on the Profits+Plus website </li></ul></ul>
  16. 16. Tool #1
  17. 17. Tool #5 <ul><li>Business and marketing plan </li></ul><ul><ul><li>Statistically know in great detail who your customer is </li></ul></ul><ul><ul><li>How are you locating your end user customers? </li></ul></ul><ul><ul><li>Can you describe them? </li></ul></ul><ul><ul><li>Where do they live? </li></ul></ul>
  18. 18. Tool #5 <ul><li>Business and marketing plan </li></ul><ul><ul><li>In comparison, locate demographics which define your marketplace </li></ul></ul><ul><ul><li>Is there a match? </li></ul></ul><ul><ul><li>Identify the competition and become well versed in their business </li></ul></ul>
  19. 19. Tool #5 <ul><li>Business and marketing plan </li></ul><ul><ul><li>Have a plan as to where your next sales growth is going to come from </li></ul></ul><ul><ul><li>Develop your “elevator speech” and share it with your staff </li></ul></ul>
  20. 20. Tool #6 <ul><li>Technology usage </li></ul><ul><ul><li>Review the detail in which you are tracking the sales of your business </li></ul></ul><ul><ul><li>Shop to determine if the software package you are currently using is still the best one for your business </li></ul></ul>
  21. 21. Tool #6 <ul><li>Technology usage </li></ul><ul><ul><li>Utilize all of the modules within the software package </li></ul></ul><ul><ul><li>Is your software package an integrated system? </li></ul></ul>
  22. 22. Tool #6 <ul><li>Technology usage </li></ul><ul><ul><li>Have a computer technician examine your hardware to make sure you are getting the maximum utilization and speed </li></ul></ul>
  23. 23. Tool #6 <ul><li>Technology usage </li></ul><ul><ul><li>If not an annual inventory, implement a sequential sectional inventory </li></ul></ul>
  24. 24. Tool #7 <ul><li>Pricing strategy </li></ul><ul><ul><li>Everyday sale price items </li></ul></ul><ul><ul><li>Price sensitive items </li></ul></ul><ul><ul><li>See addendum #1 </li></ul></ul>
  25. 25. Tool #7 <ul><li>Price Sensitive Items </li></ul><ul><ul><li>Has a “sister” product that can be an everyday sale price item  </li></ul></ul><ul><ul><li>The same item, but in a different size/color, is an everyday sale price item </li></ul></ul><ul><ul><li>Has additional benefits/features that can be easily demonstrated or explained </li></ul></ul><ul><ul><li>Not sold in mass merchants </li></ul></ul>
  26. 26. Tool #7 <ul><ul><li>Not advertised by competition </li></ul></ul><ul><ul><li>Solves a problem/need better than the product asked for </li></ul></ul><ul><ul><li>Scores 3 or less on the 8 remaining blind price item list </li></ul></ul><ul><ul><li>Quality is immediately proven by way of manufacturer name </li></ul></ul>
  27. 27. Tool #7 <ul><li>Pricing strategy </li></ul><ul><ul><li>Blind price items </li></ul></ul><ul><ul><li>See addendums #2 & #3 </li></ul></ul>
  28. 28. Tool #7 <ul><li>How do you determine a blind price item? </li></ul><ul><ul><ul><li>Takes extra time to price </li></ul></ul></ul><ul><ul><ul><li>Requires extra handling for the customer </li></ul></ul></ul><ul><ul><ul><li>Is a natural “add on” sale item </li></ul></ul></ul><ul><ul><ul><li>Seldom used </li></ul></ul></ul><ul><li>5. Is a repair or replacement item </li></ul>
  29. 29. Tool #7 <ul><li>6. Has luxury or status appeal </li></ul><ul><li>7. Is seldom promoted </li></ul><ul><li>8. Is not a seasonal item </li></ul><ul><li>9. Is a recreational item </li></ul><ul><li>10. Not sold in mass merchants </li></ul>
  30. 30. Tool #7 <ul><li>Score one point for each yes answer. Possible margins are: </li></ul><ul><ul><li>1 to 3 points: 40% - 45% </li></ul></ul><ul><ul><li>4 or 5 points: 46% - 55% </li></ul></ul><ul><ul><li>6 points: 56% - 60% </li></ul></ul><ul><ul><li>7 points: 61% - 65% </li></ul></ul><ul><ul><li>8 - 10 points: 66% - ? </li></ul></ul>
  31. 31. And your current gross margin is: If you raise 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. 32. Tool #1 Changing Prices Calculator
  33. 33. Tool #7 <ul><li>Pricing strategy </li></ul><ul><ul><li>Promotional price items </li></ul></ul><ul><ul><li>Variable pricing techniques </li></ul></ul><ul><ul><li>See addendum #4 </li></ul></ul>
  34. 34. 24 Cent Pricing System Cost You add Old Retail Add 24 cents Round up to Minimum 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. 35. Tool #7 <ul><li>Pricing strategy </li></ul><ul><ul><li>$2.00 to $9.99 </li></ul></ul><ul><li> .29 .49 .79 .99 </li></ul><ul><ul><li>$10.00 to $19.99 </li></ul></ul><ul><li> .99 </li></ul><ul><ul><li>$20.00 to $49.99 </li></ul></ul><ul><li>$_1.99 $_2.99 $_4.99 $_6.99 $_7.99 $_9.99 </li></ul><ul><ul><li>$50.00 and above </li></ul></ul><ul><li> $_2.99 $_4.99 $_7.99 $_9.99 </li></ul>
  36. 36. Tool #1
  37. 37. Tool #8 <ul><li>Cash flow management </li></ul><ul><ul><li>Understand the basic terminology of accounting </li></ul></ul><ul><ul><li>Cash basis vs. accrual </li></ul></ul><ul><ul><li>Current assets vs. long term </li></ul></ul><ul><ul><li>Current income, retained earnings, stockholders equity </li></ul></ul>
  38. 38. Tool #8 <ul><li>Cash flow management </li></ul><ul><ul><li>Be able to read a balance sheet and a profit and loss statement </li></ul></ul><ul><ul><li>Create budgets for each of the line items of your profit and loss statement </li></ul></ul><ul><ul><li>Review monthly </li></ul></ul>
  39. 39. Tool #8 <ul><li>Cash flow management </li></ul><ul><ul><li>Utilize a cash flow statement </li></ul></ul>
  40. 40. Tool #1
  41. 41. Tool #8 <ul><li>Cash flow management </li></ul>
  42. 42. Tool #8 <ul><li>Cash flow management </li></ul><ul><ul><li>Update your cash flow statement each month </li></ul></ul>
  43. 43. Tool #9 <ul><li>Self preservation and improvement </li></ul><ul><ul><li>Develop an advisory board and find a mentor </li></ul></ul><ul><ul><li>Take time to rest yourself </li></ul></ul><ul><ul><li>Recharge yourself by way of trade shows, conferences and books </li></ul></ul>
  44. 44. Tool #1
  45. 45. Tool #9 <ul><li>Self preservation and improvement </li></ul><ul><ul><li>You cannot fly your business alone </li></ul></ul><ul><ul><li>Take the credit, take the blame, and know when to say when </li></ul></ul>
  46. 46. The 9 Piece Toolbox <ul><li>Are all of the tools in your toolbox? </li></ul><ul><li>Are they kept in top condition for peak performance? </li></ul>
  47. 47. A wise man will make more opportunities than he finds . - Francis Bacon
  48. 48. Final Note <ul><li>This presentation will be specialized to your industry and your attendees’ specific needs. </li></ul><ul><li>For more information about having Tom present for you, contact us at (727)464-2182 or visit our website: www.profitsplus.org </li></ul>

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