The WSJ Reports On McDonalds. My Report On The Key Success Factors

McDonald’s is doing well in the current economic climate as reported by the WSJ and a lot of credit is given to the leadership of Ralph Averez, President.  Readers have a number of reactions to this story including some not so flattering.

However the are a number of principles being followed by Mr. Alverez that are well worth paying attention to. These include:

“I love numbers,” Mr. Alvarez says. “I think data used well really tells a story.”  He acts to create a continually improving story.  For example, modifying  menu offering and prices almost in real time. That is a great lesson.

He uses a baseball cap and sunglasses to disguise himself when visiting stores and testing food and service against the standards. There are two lessons here: one stay close to your customer’s experience and two, for awhile people who wear ballcaps and sunglasses and look like Mr. Alverez in disguise, may get outstanding service. 🙂

You don’t win and maintain customer loyalty by cutting the size of the serving. You eliminate all unnecessary costs and them some and keep focusing on increasing the value of the customer’s experience.

For the complete article Click Here.

My comments posted to this article on the site of the WSJ are republished now:

This is an excellent presentation by Janet Adamy. I really appreciate the statement “I love numbers,” Mr. Alvarez says. “I think data used well really tells a story.” He acts to create a continually improving story. That is a great lesson.

There is a huge opportunity for McDonald’s and others in using social media to increase sales and profits. I suspect that the large companies will turn to their marketing executives who will turn to their ad agencies and say let’s invest in social media. I recommend new thinking as social media is new landscape.

Steve Pohlit
http://stevereports.com

One reader suggests McDonald’s has got it all right.  I think they are not in step with on line social media treads. This represents a huge opportunity for them.

Sharing with all my readers the energy of peace, happiness and abundance

Steve Pohlit
The Profit Expert

Email Steve to schedule A No Obligation Consultation On Building Your Business Profits.  Let’s discuss how to use cutting edge Social Media Marketing, Internet Marketing and Direct Response Marketing in the revenue building cycle of your business to drive your profits sky high.

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How To Increase Business Profits by 30% or More in 90 Days or Less

The Exact Steps Required To Turnaround A Business That Is Cash Flow Negative (In Trouble)

I have led companies in the retail, real estate, transportation and restaurant industries from  near catastrophe to stability and profitable growth. Companies find themselves in a dire straits position for a multiple of reasons when the economy is strong as well as weak … more so when weak.

The current business climate is tenuous and an increasing number of businesses find themselves in a profit and cash flow crunch. If you or someone you know is in that position, time is of the essence. Literally every hour that passes is critical when a company’s profit and cash flow are on a downward trend. The faster action is taken to restore the business to a positive cash flow position, the more likely it can be further strengthened to renewed profitable growth.

The following steps are the major ones that I have guided clients through who have been in this situation:

1. Stop issuing checks until Step 2 and Step 3 are completed. The exception would be payroll and any utilities if you are at the point of being shut off if the bill is not paid. If you have a trucking company you have to buy fuel. If you are a restaurant you have to buy food. If you don’t have the funds to pay “life support costs and expenses” there are still options but they would have to be addressed on a case by case basis. You want to avoid getting to the point of not being able to pay the must have expenses.  There is a wide variation of the definition of must have items. The clients I have helped were very surprised at the literal definition of “must haves” but they thanked me later.

2. Be certain as to your exact cash and liquidity position. You need a very accurate snapshot of the free cash in your bank account, the quality of accounts receivables and a precise accounts payable listing that includes all invoices. You would be surprised as to how many companies do not know their actual cash position, ignore problems in their accounts receivable balances and forget that oftentimes there are bills sitting in unopened mail and desk drawers.

3. Develop an eight week cash receipts and disbursements forecast and don’t leave one cent off of the disbursements list. If you are not sure how to do this, there is an example at 10 Minute MBA This is a core schedule that I implement with all clients and is very valuable when used properly.

4. Document an organization chart with each person’s position and compensation.

5. If the business sells a physical product, it is important to evaluate the inventory. You cannot sell what you don’t have and you can’t replenish inventory if vendors have shut you off.

6. If there are debt agreements in place understand all debt compliance covenants.

7. Identify all critical support functions. For example, the company’s internet connection, maintenance agreements on machinery and equipment and key licensing agreements if any.

The goal is to have an accurate picture of all the facts no matter how dismal they are. I can’t tell you how many times I have been blind sided by additional pieces of information that were very important in finalizing the turnaround plan.

What Actions Are Typically Taken Once There Is An Accurate Picture of Situation?

1. Cut all non- essential spending and payroll.

2. Implement a temporary reduction in pay for as many people as possible. That is always difficult and may be impractical if there is a union or a large hourly workforce. Every situation is different but normally payroll has to be cut and it is often delegated to the outside consultant to handle.

Note: many of these steps are implemented quickly. Even while the entire picture is still being developed. That is where experience with these situations is very valuable. Experts with turnaround experience know how and where to act fast.

3. With people you want to take the action one time and then meet with those that remain and explain to them what is going on and how it is going to be fixed.

4. Vendors on the accounts payable list will need to be called and given a date when they can expect a workout plan. This is not fun work even for an expert consultant. However, whatever needs to be done to save the business and restore profitability should be addressed.

5. If there is a sales staff, look to move those people to full commission status and if possible add to the staff with full commission as the compensation package. Be careful if out of pocket expenses are paid. They have to be limited and per diems in place.

6. Assign clear accountability for collecting receivables and put in place a three step collection process. In certain cases discounts are negotiated for paying early.

Notice all the emphasis at this point is on cutting expenses and build cash once that process is in place then

Work on your building business and profits plan. Make sure it is realistic and focused on the next 90-180 days. When that is drafted including the financial projections you are now in a position to negotiate with bank debt holders, capital equipment lease venders and other long term lease agreements in place.

Some clients may need to file for chapter 11 reorganization. This should be avoided at all costs since it is very expensive, time consuming and a major distraction. However sometimes it is the only available option other than shutting your doors. Chapter 11 is usually the best answer where selling assets, selling the business or parts of the business is part of the the turnaround plan.

I hope this helps and while it addresses many points there are always more depending on the business. The following is right from my Turnaround Consulting Site

Do you worry about running out of cash?
Do most of your key vendors have you on COD?
Have checks issued by your business bounced?
Are revenue trends decreasing and accounts payable increasing?
Have any of your valued employees left for a “better opportunity”?
Are you spending all of your time fighting fires?
Do you wake up at night fearing you will be out of business?
Do you fear you will not have enough cash to meet your next payroll? What about the next?
Are you thinking or have been advised that a reorganization of your business under Chapter 11 of the US Bankruptcy code may be the answer?

“If You Answered Yes To More Than One of These Questions, Then You Need To Call Steve Pohlit at 727-587-7871 Right Now. That Is My Direct Line. I Will Personally Determine If I Can Help You Solve Your Business Problems or Refer You To Someone Who Can. This Call Will Cost You Nothing and May Well Save Your Company.”

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There are two reasons why companies ask me for business consulting assistance:
1. They know what to do but want an independent third party experienced business development consultant to drive the process as that approach demonstrates management’s commitment to achieving the goals.
2. Management understands the need for improved performance and understands they do not have the experience to implement what is required.
3. There is actually a third reason and that is where a business is in a crises situation and turnaround business consulting procedures need to be implemented fast. Nobody likes that situation, even the consultant. However, many companies can be salvaged with the right action. Think of the what goes into action when a person has a heart attack. Timing and action are the differences between life and death.

Be Well and Prosper,
Steve Pohlit
Business Development Consulting

Steve Pohlit has more than 20 years experience running very large and medium sized companies. Steve consults with clients to design and implement processes that will deliver improved business performance for the long term. Learn more about the process of Increasing Profits by 30% or More In 90 Days or Less by visiting 10 Minute MBA or you can call 727-587-7871 and speak with Steve directly. Have a question? Click Here To Visit Ask The Consultant

Best Buy’s Results Only Work Environment Deserves High Marks. Here’s Why

Best Buy’s Results Only Work Environment Deserves High Marks. Here’s Why

Huge cuts in turnover.
Huge increases in productivity.

Those are the results reported by the departments of Best Buy that have focused on having people achieve work milestones rather than caring where the employees are when they get the work done. Many hardly ever show up for work.

The focus is on results and for many of the tasks needed completed at the home offices of Best Buy and now they are not.

With the change, employees love working for Best Buy. How do they know? Well when high turnover rates plummet to near 0 that is a pretty good indicator.

I can’t tell you how many times I have counseled CEO’s and Presidents moaning about otherwise outstanding employees not being able to consistently get to work at a prescribed time.My advice always is have clear definition of what needs to be done and when and then leave them alone.

Best Buy’s new rules are:
Don’t waste my time.
Don’t waste your time.
Don’t waste the company’s money.

Good rules!

Does the ultimate flexible schedule work for everyone? Well there are a few jobs where I have not figured it out. For example, I am writing this 40,000 feet in the air and I don’t think airlines can operate with pilots, flight attendants, mechanics and airport support showing up when they feel like it or not at all.

If you have abused your lifestyle and are scheduled for bypass surgery at 7AM in the morning, I don’t think you want to be prepped and then find your doctor decided to sleep in or go play golf.

Buying food at a grocery store or restaurant could be a challenge if the place is not open because people who operate those stores decide to go fishing.

But maybe there is more flexibiliy than what we think. What if there were an extra number of people employed and the staff worked it out. For example: Hey Judy I don’t feel like working this evening could you help me out? Judy says sure and the staffing for the restaurant is fine. The employees worked it out. Now if you are a store manager and you want some coverage the day after Thanksgiving, maybe your thinking is not in sync with the goal.

Before you start with the “but we cannot afford any extra staff” argument I ask you what does your turnover cost you?

I was in a long line at an “Oh My God” fast food restaurant (OK it was Burger King where they suck me in with their purported Angus steak burger that I like – hey Warren Buffet and Bill Gates like the value meal so back off.) To the point! The line was long and since I frequent this particular Burger King while working with a client near there, I cannot help it but I simply ask – what the hell is wrong here? The answer is always the same. This location like a multitude of other locations just like it pay their employees near minimum wage, their turnover is about 3000% a year and their lost sales are about $2,000 per day. By the way that is three quarters of a million dollars. I estimate one location leaves about $200,000 of profit on the table because of turnover and lost sales. I am I right – absolutely.

So Best Buy understand the cost of turnover and they apparently understand the importance of no comprise to achieving defined performance goals. I hope Best Buy continues to have huge success with this program. My only question is from a competitve advantage point of view, I have no idea why they let this program be published by Business Week and others. I would have advised leaving their competitor in a bigger cloud of dust before acknowledging the success of this program.

Be well and prosper,

Steve Pohlit
Business Development Consulting

Steve Pohlit has more than 20 years experience running very large and medium sized companies. Steve now consults personally with clients to design and implement processes that will deliver improved business performance for the long term. Most projects are self-funding within 90 days. The client then experiences a very high return on investment. Learn more about the process of Increasing Profits by 30% or More In 90 Days or Less by visiting http://www.stevepohlit.com or you can call 727-587-7871 and speak with Steve directly.

John Reese Exposes The Truth of Multiple Sources of Income and Steve Pohlit Reveals How John’s Advice Works Off Line

John Reese Exposes The Truth of Multiple Sources of Income and Steve Pohlit Reveals How John’s Advice Works Off Line

I have been a subscriber of The Reese Report since it’s first issue. John offers sound advice on building on line based businesses including web sites that attract traffic that buys what you have to sell. John is one in a small group of people I have paid close attention too and who have helped me learn and bring value to my business development clients. I always recommend The Reese Report.

John has just released a video commentary that encourages you to focus on one targeted market as your primary source of income. If you are in business or want to be you should listen to his message. Click Here to watch this video. It is about 10 minutes and worth it.

Most of my work is with traditional offline businesses. This year I have worked with several contractors and retailers. In the past I have worked with manufacturing companies, trucking companies, companies operating multiple restaurants, drug stores, convenient stores and more. In each case a primary focus of my work with those companies has been A, B, C management. A, B, C management is simply defining those customers that represent 80% or more of your current and future income and the critical path tasks required to build and serve those customers profitably.

Not every project achieves the goals set out at the start. The single biggest reason a company optimizes performance and profits over time is that they consistently stay focused and execute on the A priority tasks that result in meeting and exceeding the expectations of their customers. The kind of focus John Reese is advocating in his video.

If A,B,C Management is the formula for success then why do companies hire a business development consultant? Good question and here is one example that illustrates the answer. Currently I am working with a very qualified and bright group of people in charge of developing and running their business. They know they are working hard and should be making more money. They also know what they should be doing and are not. They hired me to help them change the way they work. This company like every business I have worked with already has a full agenda when I walk in the door. The are finding the direction provided by the consulting process helps them modify their work to focus on what will make the biggest positive differences in their business long term. In the first week they agreed to several major actions that they have been procrastinating on for quite some time.

I am preparing a special report that addresses the key questions every business should ask when considering if they need a consultant and how to proceed in hiring one. In the meantime if you have questions you are encouraged to contact me by email or phone. All my contact information can be found at http://www.stevepohlit.com or in my resource box below.

Be well and prosper,
Steve Pohlit
Business Development Consulting

Steve Pohlit has more than 20 years experience running very large and medium sized companies. Steve now consults personally with clients to design and implement processes that will deliver improved business performance for the long term. Most projects are self-funding within 90 days. The client then experiences a very high return on investment. Learn more about the process of Increasing Profits by 30% or More In 90 Days or Less by visiting http://www.stevepohlit.com or you can call 727-587-7871 and speak with Steve directly.

Converting Ideas Into Business Revenue and Profits

The following article by my friend Allyn Cutts offers excellent advise and is a courtesy of Steve Pohlit, Business Development Consultant who helps companies develop and implement business building marketing programs and organizational processes to optimize profit growth.

Are You Top Of Consciousness

How many great ideas have you had that fizzled and evaporated into thin air? Heck, they were darned good ideas too! The problem wasn’t the ideas, it was implementing them… making them work.

We’ve been talking about Top of Consciousness Marketing, one of the greatest marketing tools I’ve come across. Now it’s time to do a little strategizing about ways to make it work for you. There’s no sense in letting another brilliant idea vanish!

How often and how many ways could you contact a potential customer outside of normal visits to you place of business? Quick! Make a list…

Here are a few to get you going:

* Seasonal greetings
* Post cards
* Birthday cards
* Newsletters
* Catalogs
* Flyers
* Special sale notices
* Telephones calls
* Emails
* Thank you’s

Listen up, here’s the secret to effectively obtaining Top of Conscious positioning in the mind of your customers… finding 10 to twelve ways to contact them every year.

Newsletters are probably one of the easiest ways to implement a regular contact system with your customers and potential customers. A monthly newsletter written in an informative and entertaining style is something your customers and potential customers will look forward to. It’ll also go a long way in establishing your credibility as an expert in your field of business.

Who doesn’t appreciate a personalized “Thank You?” It doesn’t really matter if it’s a phone call, and email, a card or a bouquet. It’s the thought that counts.

Remember the pleasant surprise of an unexpected birthday card? Hey, it always feels good to have someone remember your special day.

The key to staying on at the top of peoples minds is simply getting their attention on a regular basis. Pick one or 10 of these methods and start using them to get the attention of your potential customers and to keep loyal customers feeling appreciated.

Stick around for some more great ideas on implementing Top of Consciousness strategies.

Dedicated To Your Further Success.

All the best,

Allyn Cutts

About the Author

Allyn has spent over 24 years helping businesses like yours find new customers and increase sales to current customers.

Allyn consults personally with clients to design and deliver offline and online direct marketing strategies that focus on metrics and measurable results. You can learn more about Allyn Cutts at http://AmazingMarketingStrategy.com or you can call 610.437.4106 between 10 AM and 4 PM Eastern Time Tuesdays and Thursdays
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Steve Pohlit develops and implements processes and procedures that grow revenue, maximize gross margin and optimize net profit. This approach is detailed in the free course “How To Increase Profits by 30% or More in 90 Days or Less” which can be found at by click here and “Blogging for Profits” which is another free series that can be found here at Steve Reports.

May Your Profits Grow and You Have Fun With The Journey

Steve Pohlit, Business Development Consultant

How Advertising Promotions Backfire

How often have you been attracted to a hot promotion only to discover the product is out of stock? This is one of the fastest ways to weaken customer loyalty and completely defeats the purpose of attracting new customers.

Boston Market has been running a family dinner promotion. The price point is $19.95. While I was not stopping for that special, I noticed a steady stream of customers ordering that special. And while I was there – they ran out. The manager was apologizing and letting people know another location nearby was still in stock. She also said the other location had a line of customers and only four dinners left. That was not a good suggestion.

A friendly crowd soon became quite irritable. Goodwill and the credibility of any future promotion was compromised. Now this was not the only issue in that location when I was there. The wait time was quite long. Boston Market is a fast food restaurant. The food is already prepared and simply needs to be served or packed for take out. The people working there moved as if the store was empty. It’s not their fault. The pay is low, the labor pool of people who will work for low pay is small and so you get what you pay for. This is systemic problem in the service industry and will not be solved until management recognizes the huge
opportunity for increased profits that will be realized when they have people working who will give customers customer service. This is not just about the pay scale, it is about having the right number of people available to provide customer service.

Now back to the advertising and more specifically the advertising process. Most retail companies have an advertising calendar because time is required to finalize a campaign including any print or electronic media that will be used. For a business the size of Boston Market, this is not small task nor is it cheap. So now all this work goes into a advertising campaign and what happens. first there is no customer contact information required on any of the coupons. Nobody asks you to fill out a satisfaction survey. So all these people come into your business to spend money and you have no idea who they are and no system in place to invite them back. Next you proceed to run out of product that you are promoting. In defense of Boston Market there are only so many whole chickens you can roast at one time and if customer traffic blips I can see where running out of product can happen. Every effort should be made to minimize out of stocks and when they do happen, have a substitute product lined up and a generous bounce back coupon – FREE would be good. Yes I am suggesting that if you are promoting a $19.95 family dinner and if you run out, give them a bounce back coupon for $19.95. It will cost the restaurant less than $8.00 and you will probably win a customer for life.

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Steve Pohlit is a business consultant helping companies achieve extraordinary increases in revenue and profits. "How To Increase Profits by 30% or More In 90 Days or Less" is a free course found at www.stevepohlit.com  "Blogging for Profits" is another free mini series Steve has developed and is offered at his blog www.stevereports.com  Steve’s newest service, www.successtips.com  offers others to contribute articles and advice as well as promote their business. CEOs of companies with revenue exceeding $10 million annually are invited to contact Steve for a complimentary consultation.

Google, Yahoo Expand Local Search: Ignore This And Your Business Profits Will Suffer

Business Development Consultant, Steve Pohlit, advises all companies to have a website with local search information now. The trends are clear. Conduct this experiment on your own. Simply ask 10 people how they would locate an apparel store, car wash, CPA, shoe repair shop, dry cleaner, attorney, etc. Even if they know the name of the business but do not know the address, ask them how they would find the address. There is a good chance 70% or more of the people you ask will say they search on-line.

The Wall Street Journal reports that Google and Yahoo are making major investments in local search “rushing to add more consumer information about local businesses”. Yahoo has www.local.yahoo.com and Google recently changed from Local to Maps which can be found at www.maps.google.com

Yahoo is building local town squares where users share information about local businesses. Google is accumulating local business information that is already posted elsewhere on line.

If you have a business, you must have domain name and at least one page that provides information on the type of business, products and services offered, location and contact information. Information about your business is going to be available on-line soon, if it is not already there. It is better for you to be in the driver seat as to what is published.

The cost of having an on line presence is no longer an excuse. The entire process can be accomplished for much less than the cost of a yellow page listing. In fact, I am registering domain names for $8.00 a year and hosting a web site can be done for $100 a year or less plus most hosting packages include an email and the ability to set up a blog. Essential design can be done less than $100 assuming the business owner gives the designer basic information. If you need additional information on setting up websites or hosting websites, email me and I will help you.

I have discussed the major opportunity for most companies is previous articles, but here it is again: use your website to provide detailed information about your business, offer visitors a reason to register with your business and then develop a communication strategy with your subscribers. This process will increase revenue and profits. It will dramatically increase revenue and profits when you also capture the contact information of people physically visiting your business and people buying from you. That is the entire basis for the business model presented at www.localretailmarketing.com The principle applies to national companies as most market to their customers in local communities.

Here is one example of a national restaurant business headquartered in Tampa, Florida. Most people are familiar with the name Outback Steakhouse. You may not know the names of their other divisions which include: Carrabba’s Italian Grill, Bonefish Grill, Roy’s and more. The St. Petersburg Times reported that Outback was concerned about the performance trends of their flagship business, Outback Steakhouse. To further understand the basis for these trends, the company hired a consulting firm to study trends and evaluate customer perception of the business. It was not reported how long this study took or cost. It simply said it was conducted in 2005 and the results are being reported in 2006.

You can monitor customer reaction to your business daily without any special studies when you have a communication program in place. For example, in the restaurant business you could offer an incentive to come in and eat. That incentive can be tracked. When the customer who received the incentive in their email, redeems it you can link it to a survey. The survey can be conducted while they are in the restaurant or afterwards with a follow-up message that includes a big, warm thank you for your visit. This is not hard to do. What must be in place is a culture that reacts to what the your customers are telling you. They will spend money with you when they know you care.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource information.

The A, B, C’s of Inventory Management

The A,B,C’s of Inventory Management

One might think the books have not been written, the software not developed and the knowledge base empty when reading some of the recent headlines. When the largest retailer in the world announces they are reducing the amount of inventory in their stores because they have too much, it crowds the isles, confuses the customer and delivers the wrong message, one might wonder why they have this problem. After all the best and brightest work there and they has not held back on investments in technology. So how does the largest retailer in the world get themselves in a position where inventory levels are excessive?

Inventory management is an art not a science. The levels of inventory are a judgment call based on the available information. Let’s review how it is supposed to work. Before we start, this brief lesson applies to every company that has inventory no matter what industry and no matter what size the company. If you think this does not apply to you then I submit you are exactly the person I was thinking of when I wrote this article.

The primary reason for any inventory is to use it or sell it to make money. If you have an inventory of spare parts for a machine that is 20 years old, you are carrying that inventory to make sure you can repair the machine if it fails. If you dispose of the machine you no longer need the spare parts inventory. If you are a restaurant that specializes in prime cut steaks, you need the inventory to match the projected customers for today and maybe tomorrow. If your projections are wrong, then you either run out of steaks or have an excess. In the restaurant business, there rarely is any need to carry more than a couple days supply of inventory. Restaurant suppliers generally deliver more than once a week. In the fashion apparel industry, inventory is seasonal. In the early Spring merchandise is already in the pipeline for Fall and Winter. If apparel merchants misjudge the style, color, or fashion trend of their customer, they will be left with merchandise taking up valuable retail space. Blowout sales are then used to get rid of it.

Good systems will tell you the quantities on hand, on order, days of supply, gross profit in inventory, inventory turnover in total, by category, by vendor, by item and a lot more. Good systems will automatically process replenishment orders for item that are considered basic or staples. However, people makes policy decisions. Policy decisions are ones like inventory turnover will be at least 4 or we will now carry a higher mix of higher priced items to attract a more upscale customer. Inventory policy decisions drive the organization to action to achieve the goals of those policies.

In my experience, effective inventory policies are a result of business strategy linked to business financial performance and liquidity goals. When there is no clear definition of the goals then how do you evaluate actual results? Actual performance is always relative to the targeted goal.

The following is a brief summary of the impact of less than optimal inventory management:

Sales goals can not be met if you have nothing to sell. Forecasted demand along with replenishment modeling are key.

Gross margin goals cannot be achieved if your actual inventory mix does not match your gross margin goal or your customer demand patterns do not match what you have to offer.

Liquidity goals cannot be achieved if inventory turnover is less than target.

A,B,C Inventory Management Plan

1.Establish clear sales and gross margin goals.
2.Develop the same goals by line of business, product category
3.Identify the A items in each category. A items are the ones that make up 80% of the sales volume for that category.
4.Calculate the gross margin for the A items by category. Calculate the variance of actual gross margin for the A items vs. goal. If the result is the same, your goals are likely too low.
5. Repeat steps 1-4 for inventory turnover. Be sure the turnover goals tie into you liquidity forecast.
6. Develop detailed action plans to improve the performance of the A items. Assign a time line to those action plans along with specific accountability for implementation.
7. Extend steps 1-7 to the B items. Include in your action plan a goal of identifying which B items should move into the A category. This is normally done based on buying trends and gross margin opportunity.
8. Calculate the total investment for each level of inventory (A, B, and C’s) Evaluate the actual return on investment vs. target. You do have a targeted ROI, correct?

Project Manager: Make inventory a priority. Many people can be involved but one person should be accountable. If you have concerns about status or progress, hire an outside professional.

Complexities usually flow into the picture when people begin to spend a lot of their time on what they view are needed support tools. Those can include staff, systems and procedures. While tools are necessary to achieve your goals, a consistent focus on actual vs. targeted performance of A items should yield enormous benefits.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource information.

Dunkin Donuts vs. Starbucks

Dunkin Donuts wanted to know. To find out they offered to send their customers to Starbucks and paid them to go there and drink and eat. But they also paid Starbuck customers to come to Dunkin Donuts to eat and drink. In exchange, the people involved agreed to answer Dunkin Donut’s questions.

This test was reported by the WSJ and what Dunkin Donuts discovered was that there are very loyal people to both businesses and they are not interested in the competitor. The Starbucks Tribe will continue to go to Starbucks and the Dunkin Donuts tribe will continue to go to Dunkin Donuts. That was the conclusion.

Why did Dunkin Donuts conduct this test? The business of Dunkin Donuts has a strategy of growing and attracting more customers. So they want to know more about what appeals to people. Of course they could have their customers in a data base and communicate with them regularly and offer them incentives for answering surveys but that is all the subject of my rant in other articles at www.stevereports.com

Duncan Donuts used a traditional focus group approach. Duncan Donuts is to be commended on testing. They are to be commended on wanting to know what changes, upgrades, new product offerings will appeal to their customer. When you review their history, you may conclude they should have done this more often. The facts are most companies fall into the trap of not reinventing themselves. Why is this important to do? Well, look at Kmart. Do you recall when they were in Chapter 11? How about Delta airlines and General Motors? Do you think Microsoft can be in trouble? Interesting to look at history and then ask the hard questions?

There are lessons to be learned from the work done by Duncan Donuts. I remember working with the leaders of The Limited when they were the premier retailer in America. The culture was amazing. New fashion ideas, new store formats, new promotions were always being tested. Merchandise managers were expected to bring their insights of what the competition was doing to the famous weekly Monday meetings where performance was scrutinized.

The point is every company has a development history and at a point in time if you become a champion, a challenger emerges. This is the like playing the game king of the hill kid as a kid. Whenever you are winning someone will be out to take your place.

How do you sustain revenue and profit growth long term? How do you do that when as soon as you are on top there is a challenger? In The Profit System I teach how to track information that tells you how you are doing. Initially, the information is developed for you to track actual vs. plan and the plan is your own performance improvement plan. This evolves to where you are confident in your ability to achieve internal targets, then you set your site on local, regional, national or international champions. At that point your goal is to be the champion. The Profit System is free.

Why is that? Why do I offer something that I promote as being so valuable for FREE when I should be selling it for a million dollars or 10 million dollars or more? Simple, I know this works, and as Joel Bauer says (www.joellive.com) my life does not change at all if you use what I teach. But yours is likely to change a lot. If I can be a catalyst of positive change for you and your company, I am delighted to offer these principles and The Profit System to you at no charge.

Wait there is one more thing. There is a major price to pay for using this system. This price is your time, attention and action to implement. My material is FREE. Even if I were to charge $50,000 for the this material and I am considering that, it is a small sum in comparison to the time you and your company will invest to apply the principles of The Profit System. Return on investment is off the charts. So if you want to make a lot more money go to The Profit System and register for the FREE course.

Will Ducan Donuts™ latest testing mean new store formats will be hugely successful? I don’t know. I do know this if they keep monitoring and keep testing they will figure it out. You can also solve the issues facing your business with a rational management system. I have given you one source for a management system roadmap.

Sending you energy of health, happiness, prosperity

Steve Pohlit

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About: Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies.  Steve is a business owner and an expert business consultant focused on building profits and net asset value. He is very experienced with Internet marketing and social media marketing.  All articles published by Steve unless specifically restricted may be freely published with this resource information.