Local

Vs. Amazon/Walmart

From Business North Carolina:

“I’ve always thought that one way to boost the economic prospects of the less populated parts of the Old North State is to encourage folks to shop at only locally owned stores. Sure, it costs a little bit more, but look at the benefits, from celebrating entrepreneurs to enhancing local culture.

National retailers take far more from our local communities than they ever give back (and the digital ones are even worse). They rarely donate to the local United Way, sponsor a baseball team or buy an ad in the high-school football program. We allow them to get away with being detached from our towns.”

Many people buy from Amazon….it is easy and quick….and often the best price….though not always.

Successful local business….make themselves….unique and different….in many cases a destination. Our experience proved also that local business had to be a part of the community.

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Making Money

From Seth Godin (5.4.2019)

Seth Godin wrote:

When your project is not making money.

It might be that you’re losing money on every sale

(Which means that each and every item you sell, every service you perform, costs you money. Bigger won’t make you better…)

  • Because you’re not charging enough.

(Low price is the last refuge of leadership that doesn’t have the guts to make a great product and tell a true story to the right people)

  • Because you’re selling to the wrong people…Choose your customers, choose your future.

(Some customers want to pay more than others, and some customers want to get more—of something—than others)

  • Because it costs you too much to make what you sell.

(Your factory processes may be unsophisticated)

Are you aware of work in process, cash flow and cycle times? Are you doing custom work in a batch business, or vice versa?

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Often business decisions are difficult decisions. Businesses are invested in a product or process and are reluctant to terminate a product line.

In our business, we decided not to carry case goods (wood bedroom furniture). While the sources were available….the turnover was minimal….so the space was allocated to sleeper sofas with a much greater turnover rate….and profit margin.

Pizza Cost

Profit Margins + Overhead

How much does a pizza cost?….with thousands of pizza shops from local to chains….there must be good profit in the pizza business.

https://thetakeout.com/the-cost-breakdown-of-a-pizza-1835340201?rev=1560441791133

“The overhead cost for one large cheese pizza at our independent pizzeria is $11.16, which leaves a $5.34 profit. Keep in mind, though, the one variable a restaurant owner can’t control is how many orders they will get in a given day.”

Several factors play into the price of a $16.50 pie….of course if a successful independent pizzeria…it’s better ingredients….better preparation….excellent service. 

As indicated….the overhead costs are the same whether the shop sells 10 pies and hour or 1 pie and hour. As in any business there will be good days and not so good days.

In our business….one very wintry January….sales were only 25% of projected budget. The month was a disaster….none-the-less….our doors were open every day….ready for business. The overhead still needed to be covered.

Fired

Tarnished Leadership

From:  https://www.airforcetimes.com/news/2019/06/10/two-star-fired-from-running-top-secret-program-office-under-multiple-ig-investigations/

Toxic leaderships seems always to crop up from time to time and perhaps always will. Most 2-star generals are in major leadership positions. And for most, it is an honor and privilege….yet also carries a great deal of responsibility. However it seems that Maj Gen. Dunlop missed that part of leadership class at the academy.

There are several issues regarding this story- the general

  • Is an Air force Academy graduate
  • Was in a highly sensitive position (classified programs)
  • Is under multiple Inspector General (IG) investigations

The most telling aspect of the story –  “and Lord walked over to the SAPCO office and removed Dunlop.”

Maj. Gen. Dunlop will more than likely retire….and that will be good for the Air Force. Sadly, somewhere along the way, the general’s Officer Efficiency Reports (OERs) may have missed the lack of some important leadership skills.

Carpet Industry

Revitalized

From:  https://time.com/5602251/carpet-industry-hardwood-floors/

“After dominating for decades, wall-to-wall carpet’s share of the floor-covering market has plummeted since the millennium—from about 60% of sales to roughly one third, according to Catalina Research. Blame Americans’ ardor for hardwood and tile—and the perception that carpet is so 1970s, ’80s or ’90s—pick your decade. Bedrooms still have lots of it, but carpet is disappearing from the center of the home—living, dining and family rooms.”

In our business, carpet was a significant part of the business….though we were limited by space. We could have done more….selling carpet was somewhat more extensive process….measuring….determining style & color and coordinating installation.

Installation pricing was always a challenge. No matter how it was figured….our final cost was always more than the estimate. Thus the profit margin on carpet never seemed to work out right.

The article wasn’t quite clear on why wall-to-wall carpet was so dominant in the 60’s, 70’s & 80’s. The reason at least in our market….hardwood floors were seen as a basic low-end floor surface. As people improved their economic status to  middle class….wall-to-wall carpet was perceived as a luxury item that would substantially improve their standard of living.