Information and the growing importance of 1%

POS SOFTWARE

What is driving retail today is information. A few days ago, I talked of the 1% rule. Let me show you another example. 

Taking from the ATO benchmark study they give what I consider the best benchmarking figures for typical businesses in Australia today, so I picked a stationery shop just because it is something most of us can quickly get our head around.

Putting in typical figures for their figures, I made this chart.

ATO benchmark figures for a typical stationery shop

So here what I am saying is that on the first column So on 150,000 turnover a business from the chart would have about 78% expenses leaving it with about $33,000 profit and I did the same on the other rows.

Okay now let us say that these businesses make a 1% improvement, so they sell 1% more and they reduce expenses by 1%. What do you think the effect will be? I think you are going to be surprised.

Stationery shop with a 1% improvement

Look at 1% did?

What is clear is that you do not need much to do dramatically better. All you need is 1% better.

So how do you get 1%? 

    Information, here are some ideas in no order
  • Speed up the queues by making your point of sale faster by increasing your POS sale scanning.
  • Find out your best sellers and move them into your best selling locations.
  • Better and more accurate buying.
  • Getting a better loyalty program going just using a simple customer birthday marketing offer helps a lot.
  • Monitor your theft rate
  • Speed up your computer processing by getting your suppliers to automate 
  • Controlling your debtors better.

All this is available from your computer system now.

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