Title: New Year, new profits
Sub-title: Now is the perfect time to take stock of your achievements during 2011 and to prepare for an even better 2012.
It’s no secret that C-Store personnel have busy workloads. Just managing day-to-day activities can be overwhelming. Running registers, ordering product, stocking shelves, keeping stores clean and other daily chores, leaves little free time for planning for the future. That’s particularly true for owner-operators, whose workdays often run ten and even twelve hours.
However the changing of the calendar presents a perfect time for industry stakeholders to reflect on what they learnt from their successes and failures during the year, so that they can boost profits in 2012. We have prepared a totally arbitrary list of ten suggestions to help do just that.
1. Produce accurate financial statements, and use them!
If you don’t know where you are, it’s hard to figure where you are going. Business-wise that means producing accurate financial statements. All businesses are required to do this by law anyways, for tax purposes.
However far too few managers take full advantage of the information compiled within their financial statements and the systems that they put in place to produce them. For example reviewing data such as total gross profit margins and individual margins for various products categories, the statement of changes in financial position, expenses by category, and so on, can provide invaluable insights into where you need to look to streamline operations.
2. Get your record-keeping in order
While large C-Store chains have sophisticated information collection systems, few independent C-Store professionals take even basic bookkeeping seriously enough. For example many fail to keep proper receipts for all of their business purchases. This can lead to overstatement of profits earned and the taxes owed. Conversely, owners who don’t record the business inventory they take home for personal use (such as food, soap, etc…), or who lose track of cash sales, may understate how much money they earn. When compiling information for financial statement preparation make sure that all revenues and expenses are included.
3. Take the time to take stock
Properly assessing how to boost profits in the New Year, starts with figuring out what you did right or wrong in the previous one. One good way to do that is to use the information compiled within your financial statements (see above) to do a self-SWOT analysis. SWOT means detailing a business’s Strengths and Weaknesses, the Opportunities it has and the Threats it faces.
Most business owners and managers will tell you that they do SWOT analyses sub-consciously all the time. However taking the time to formally write it all down, is an excellent tool to help jog your memory as to how you can use this information.
4. Listen to your employees
Don’t forget to ask employees for their input. Your people know far more about your business than you think. However many are reluctant to tell you what they know because “suggestions” are too often interpreted by management as criticism. Managers often exacerbate the communications gap by getting stuck in “interaction patterns,” that consist of them talking and employees listening. This can be fatal to effective exchanges.
To overcome this, try to get your people together once a year for an off-site business brainstorming session. Do this after a friendly meal, to try and remove employee shyness and break down communication barriers. Let employees know about your plans a couple of days in advance so they have time to prepare their thoughts. Then, after the meal is over, pour a drink or two, and sit back and listen. You will be pleasantly surprised at the free ideas you get.
5. Invest in your employees
Ask any successful executive why the company he works for performs well, and he will almost always start by praising its “people.” Much of this is just PR talk. (A business with good management and lousy people has a better chance of success than one with good people and lousy management). That said, C-Store employees form the primary point of contact with customers. As a result, investments in helping staff do their jobs better, whether these be providing sales or language courses, clean uniforms, more flexible schedules, comfortable working conditions or even opportunities for advancement, often flow directly to the bottom line.
6. Listen to customers
Making life easy for customers is the only reason that convenience stores exist. However most store owners and managers, even those that have ongoing contact with customers, rarely ask them what they think. Big chains, which have standard store layouts used in all communities, despite regional demand differences, are no better. Customers are your bosses and they know what they need from you better than anyone. If you take the time, when traffic is slow, establish a rapport and ask their thoughts, they will tell you. No need to hire a management consultant.
Your faithful correspondent has been shopping in convenience stores all of his life, and not once has a store owner employee asked: “Did you find everything that you were looking for today?” Try it.
7. Learn English! (And French)
This one is a little touchy. However to talk and listen to customers and employees, you need to be able to speak their language. Yet a surprisingly large number of convenience store industry owners and employees, are first generation immigrants, who have not yet mastered English (and/or French) as well as they could.
There are no official statistics, however anecdotal evidence, reveals that a significant number of industry stakeholders, do not have the skills required to answer even basic questions in either of Canada’s two official languages, without significant prompting.
In a competitive industry, in which customers need to be served quickly and effectively, that can be fatal. Mastering English, French, or even both, should be a priority for anyone who wants to improve profitability in dealings with a public clientele. That’s especially true in the C-Store industry.
8. Stand up for your rights and interests
Convenience store owners, managers and employees deal daily with a slew of common issues that affect them as a group. Yet many are far too reluctant to stand up for their rights and interests. For example on the legislative front, inefficient taxation and regulation of tobacco products and oversight of contraband tobacco, significantly hurts convenience store sales.
Likewise, restrictions on the sale of beer, wine and other alcohol products in convenience stores, cause considerable damage to the industry. Lottery boards too often play favourites, giving access to their products to some stores, while leaving others out in the cold.
To be heard on these and many other issues, C-Store owners need to stand up for their rights, to build support for their interests at a grass roots level, to lobby politicians and to work together in industry associations.
9. Tailor your demand for seasonal changes
Creating customer convenience means staying ahead of the curve. As a result, most C-Store owners have long learnt to tailor their offerings to seasonal demand during the Christmas, Halloween, Easter, Back-to-School, Mother’s and Father’s Day periods. Less easy is to tailor seasonal demand for local changes. For example stores located beside a soccer field, ski hill, elementary high school or other locales with seasonal traffic, are faced constantly with shifting demand patterns. Learn what they are and how to adjust.
10. Get involved in your community
If you don’t reach down and pull those around you up, those around you will reach up and pull you down. That plays out in spades for C-Store owners, who can win big-time by getting involved in their communities, whether it be by joining local associations, sponsoring sports teams, or just attending regional events. Community action provides an excellent way for C-Store owners to interact with customers in a less formal way, gage seasonal demand changes, and yes, to give back a bit to the area that supplies store traffic.
11. Find a way to stand out
C-Store customers are generally slaves to location. As a result your store will often draw the vast majority of its clientele from traffic that passes by on a regular basis. However much of your clientele, particularly for those stores located in busy areas, passes by several competitor and other retail establishments that offer similar wares. To overcome this hurdle, try to find a way to stand out from the crowd, either by carrying a special line of products (say by stocking fruits and vegetables, specialty magazines, foodservice wares or imported beers), or by offering ancillary services, such as a gas bar, or an adjoining restaurant.
12. Forge great supplier relationships
Suppliers form a crucial part of C-Store supply chains. So learning to work well with them provides innumerable opportunities for stakeholders to boost industry profits.
If you are on good terms with your suppliers, they’ll be happy to let you know about discounts, point of purchase promotions and so, all of which will help to move merchandise. So keep the communications channels open with your suppliers and try to make life easier for them by bundling purchases to take advantage of volume discounts and to meet industry minimum order requirements.
13. Think long term
Rome wasn’t built in a day and your business won’t be either. Sure it is hard for many C-Store stakeholders to navigate daily challenges, even to meet weekly payrolls on occasion. Yet shrewd operators have learnt to walk and chew gun at the same time, by running the store while simultaneously keeping the long-term view in mind; implementing changes slowly, but consistently.
Major adjustments such as changing the store layout, installing new bathroom fixtures, supplying a new product offering, starting up employee training programs and many of the other suggestions in this article take time and cost money. As a result, in most cases, these and other changes cannot all be done at once. So think long-term. The Japanese have a term they use called “Kansei,” which means “continuous improvement.” That’s the way to go.
14. Visit and get to know your competition
In today’s competitive business environment, you only stand a chance if you are as good as your toughest competitor, or you offer customers a value proposition that he cannot. But the only way you can do that, is if you know what your competitors are up to, and to do that you need to visit them.
If you are especially bold, introduce yourself, and explain what you are doing and maybe exchange tips.
C-Stores’ biggest competition is often not from other C-Stores, but rather from alternate distribution channels, such as grocers and pharmacies, liquor monopolies, casinos, restaurants and so on. In the vast majority of Canadian markets, C-Store owners have more to gain from working together than they do by flying solo.
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Peter Diekmeyer Communications Inc.