December is just frantic!  Right?  The (usually) brief respite over the Christmas and New Year break is a welcome relief from the outright pressure of that frantic rush. Taking some of that rest time to reflect on business for the coming six months can pay handsome dividends.  You have just six interrupted months to go to achieve your goals for this year.  You can make June 2007 an absolute triumph with outstanding profit results.

The general pattern of trading in the New Year is pretty well known.  The summer holidays, followed by 'back-to-school", then it's down to business until Easter.  Autumn, the ANZAC holiday, and school holidays soon follow, then winter - and it's finally all over for another financial year!  It is a demanding time for owners and managers, but the opportunity to make really food sales comes only to those who make a special effort.  You will need to do three things!

1.    Sell from Stock
In the second half of the year, you will be carrying stock you bought in for summer or Christmas demand that just did not eventuate.  Lots of managers hope this stock will sell, but then don't take specific steps to clear it.  Nearly always, there is a fear of using discounts to clear stock, but often it is not a price issue - it is a "sales" issue.  Classic marketing theory is to have products designed to meet the customer's requirements.  No problem there, but in the real world, many customers don't really know.  A good sales person will try really hard to sell what you have.  That will reduce stock holding costs, increase stock turn, and increase customer satisfaction.  (Holding costs are important for every one now.  Details Here)

[Some time ago I went into a top rated cafe in the Victorian regional city of Mildura, and asked for a focaccia with prosciutto and sun-dried tomatoes.  I was offered one already pre-made with salami and fresh tomatoes - with sun dried tomatoes added.  It was ready right away - no waiting.  Then I paid, even paying extra for the additional filling.   That very perishable stock was cleared, there was no discount, and all because the sales person asked the question.  I kept going back again and again, because their food is terrific and the customer service is always exceptional.]

Most sales staff just don't get the idea of really selling.  So it's up to you to get some sales training for them, or at least give some pointers.  It is so easy to say "I can see why that might be appealing, but have you ever thought of ....." during the sales interview.  But if your staff have not been trained, the just won't know how to do it - and it is your profit that suffers.

Some customers are quite adamant about what they want, even if you can see it's wrong for them.  Then you might have to order in for them.  But in most cases, the salesperson is in the box seat to move stock at the full price.

2.    Make a Virtue out of Necessity
Every business has some parts of its operations that are not ideal.  That's just the way it is.  But you will probably find a customer benefit in there if you look hard.  Suddenly a disadvantage becomes an opportunity.  Look at this television advertisement.  (See it here!)  The ad, scripted by "The Red Zebra" and produced by a local television station, did  not cost a  "bomb" but has generated sales leads out of proportion to its overall importance.  The underlying business strategy is a classic example of making a virtue out of necessity.  To find out the underlying principles,  talk to us Here!  (This merchandising program is currently running, and is presented here with the Client's permission.  We thank Donehues Leisure for their permission.)

3.    Make the Sale
No, this is not a tautology!  Remember it is only "dollars" you can bank - not "percents".  Almost all business people feel "I couldn't sell it at that price!", fearful that they are not making "enough" on the sale.  In almost every case (but not every case!) it would be better to book the gross profit dollars,even though it's below the target percent, than lose the sale.

That's not desperation, it's simply recognizing that every dollar banked is another "click" towards reaching the target gross profit for the month.  Next month there will be another sales lead and another item to sell, but the sale you book now is already done and dusted.  Yes, your percentage gross might be down, but your dollars are up.  If you'd like to find out more about this point, you can  talk to us Here!  Remember, there is no charge or obligation, and you can get a whole hour's consultation free.


Tax Office Changes Stock Valuation Rules.

Stock valuation rules now require inclusion of "holding costs" in the valuation of closing stock for tax purposes.  This is great news!  Now good stock management practices will be enshrined in tax law.  It will be a nuisance, but you will win out of this.  

Check with your accountant for details of how this change will affect you.

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Microsoft Announces New "Windows Vista" and New "MS Office" software.

Microsoft has, at long last, begun the Australian launch of its long awaited update of the "Windows" operating system and "MSOffice" office productivity package.  Initial comments by IT industry analysts point to the limited new features of these new packages, despite the long delays in their release.   Overall reaction appears to be "let's wait and see", noting that the "Sharepoint" feature of the new "Office" package is its only advantage of this new program over its predecessor.  Even then, it is only of value to large corporate users rather than small and medium enterprises.

At present it seems that it will be next February before these offerings begin appearing for general users.  Most observers see no reason to update, and suggest just buying these systems when you buy a new computer.  They see no (or little) benefit in the cost of upgrading existing machines.

Meanwhile, the higher costs of the new "Office" package have caused some comment, with suggested prices being listed in the $800 - $1,200 region, per single user licence.  At that rate, "Open Office" which is a fully featured, open source, free download, seems a good proposition.  
Consider how much you could save on all your machines you are running!  "Open Office" is fully compatible with "MSOffice".  Look here to see Open Office now


Any advice, information or comment contained in this document is general in nature, and should not be relied on as the basis for any specific commercial, business, employment, or financial decision. Specific advice should always be obtained for each individual circumstance. Accordingly any advice, information or comment contained herein is for general guidance only.