Business in a Slump? Try a Proven Method to Boost Sales

Empty CartDebbie has seen a decline in her business after some profitable years She struggled to find an answer for the downturn so she hired a business consultant to analyse her business and offer suggestions.

One thing became very clear after a few questions from the business consultant. Debbie was asked the following questions:

How many customers walk through your doors each week, month?

How many of those customers walk away without making a purchase?

What is the average monthly purchase for each customer?

Debbie did not have definitive answers for the questions. She took her customers for granted when things were going well. She assumed great prices, an ideal location and good service were enough to sustain her business. As she later found out, that was not the case.

Her business consultant told her, “Think of your customers as the engine that keeps your business going.” He also emphasized the need to put a higher value on each customer.

A survey done over a few weeks found that some customers were leaving because they could not find someone to help with their purchases. So Debbie agreed to hire one more person and focus more on top class customer service. Items in her store were also rearranged to make shopping easier for customers and to help sales agents upsell each customer.

The consultant then outlined a specific plan of actions that would improve sales. The strategy for improved sales included the following:

1. Get more customers through the door.

2. Increase the average sale per customer.

3. Give incentives to encourage repeat business.

This is how this strategy works: Assume that 100 customers make a purchase each week. Assume that each customer spends on average Ja$100,000. So in a week the sales total would be:

100 x $100,000 = $10,000,000

If the number of customers increase by only 5% and the average sale increases by 5% per customer, the new weekly sales figure would be:

105 x $105,000 = $11,025,000

This represents an increase of $1,025,000 in weekly sales.

There is also the matter of repeat business. The plan of actions included offering incentives to capture customers names, home addresses and email addresses. From a carefully managed list, a few would be invited to “Private Only” sales events. Also some of the “bigger” spenders would periodically get discount coupons to encourage repeat business.

This is a proven strategy that has succeeded in different line of businesses. Capturing customers information, creating a list, managing that list and treating each customer like gold will increase sales.

It is easier to retain an existing customer than it is to gain a new customer.

VALUE YOUR EXISTING CUSTOMERS!

Successful Entrepreneur: Gordon “Butch” Stewart

butch Jamaica, a country of nearly 3 million inhabitants and over 2 million expatriates has produced many successful business men and women. The Honorable Gordon “Butch” Stewart OJ, CD, Hon. LLD, is arguably the most notable of these successful entrepreneurs. In 1968, at the startup of his first company, Stewart set in motion an entrepreneurial revolution, the result of which led to a deepening transformation and renewal of Jamaica’s economy, even to this day. While this is indeed an outstanding achievement, there is much more depth and insight to Gordon Stewart, a spin-off from his early struggles in Jamaica. Through Stewart’s life, we can learn that adversities do make us stronger.

In Stewart’s early life, his school priests pegged him as the “least likely to succeed”, a judgment possibly made because of Stewart’s renowned robust personality and unusual temerity. He is nicknamed after Disney’s cartoon where Butch, the bulldog, would constantly defend his territory and his bone. It would be these telltale characteristics that would form the impetus for Gordon’s rise to greatness and him eventually becoming the undisputed “King of All-Inclusive” in Jamaica and the Caribbean.

It is often said that the measure of a man’s success is in the difficulties that he is able to overcome. Stewart came from very humble beginnings, the first child of Gordon and Jean Stewart. Certainly, one might argue that his ancestry dates back to colonial England, but Stewart knows what it feels like to be taken out of school because his parents could not afford the fees. In fact, he was sent to a school where he had to learn to be tough. As early as 12 years of age, Stewart had to begin working and indeed, ‘hustling’ to support his family. In 1953, when the James Bond film, Dr. No, started filming in Jamaica, the young Stewart viewed this as an opportunity to hustle and as such, he offered his skills to the film crew. He borrowed his father’s fishing boat and convinced the crew members daily to transport the movie stars to their anchored yachts and back to the harbor front. Unlike his other white counterparts, he had no inheritance to acquire and certainly no ancestry to bequeath wealth upon him. It is this need of having to fend for himself that would signal Stewart’s ultimate rise to success. Stewart’s adversities greatly helped him to develop his power of persuasion and taught him the golden rule of success: provide immediate gratification to customers.

Stewart worked on several stints before hitting it big in 1968. He had worked at a trading company, managing the appliance department. After five years, Stewart was able to save $5,000. With that, he bought an airplane ticket and flew to Edison, New Jersey where he met with the nephew of Fedders’ president to discuss going into partnership together. This would be the turning point of Stewart’s success. He rented an old doctor’s office and was able to buy 27 room air conditioners, which he installed quickly, leaving his customers satisfied and happy. That company, ATL Group Limited, grew proportionally over the years and was able to garner much success in the business community. Stewart also owns The Jamaica Observer, one of the leading newspaper companies in Jamaica.

What really gives Stewart the right to be called an entrepreneurial mogul, though, is that he has the leading chains of hotels in the Caribbean. In 1981, a time when the Jamaican economy rose out of its coma, Stewart purchased two broken-down hotels in Montego Bay, one overlooking the Sangster International Airport. He claimed that he had Pandora’s boxes with these two purchases; he knew not what he had gotten himself into. Nonetheless, his early struggles in life prepared him for this. Stewart now boasts 16 hotels, 12 couples-only and four Beaches resorts for families. Stewart, winner of “the Cupid of the Caribbean” and “the master of marketing and world travel awards”, sums up his ability to reach the top in these few words: “The winning formula is to find out what people want, give it to them and in doing so exceed their expectations.”

We are truly living in the Golden Age of entrepreneurship with many entrepreneurs creating rifts in rather dismal economies. From his beginnings as a salesman of air conditioners to his rise into fame, Gordon Stewart remains a powerhouse in entrepreneurial legacy. For sure we need an army of entrepreneurs like Stewart who are willing and capable to seize the commercial opportunities and use their intellectual capabilities to create products that will not only meet the needs of people but products that will also cater for the “small people”.

©Tony Thomas
(Do not reproduce in any form without expressed permission from the author.)

Advice for Your Jamaican Business from Scotiabank

The Sunday edition of the Observer reported that “SCOTIA Group Jamaica reported net income of $10.6 billion for the year ending October 31, 2012, $43 million less than the same period last year.” The supporting data in the article showed that Scotiabank did well in a climate of economic hardships.

Scotiabank supports small businesses and offers online resources to help Jamaican entrepreneurs start, maintain and grow their business. Here are some articles worth looking at:

Thinking About Starting Your Own Business? – Some of the things to consider if you are thinking of being an entrepreneur are: Are you willing to take risks? Have you done your market research? Have you determined your start-up costs?

Do You Have What it Takes to be an Entrepreneur? – Some of the questions to ask yourself:
Do you like making decisions?
Are you ambitious?
Are you motivated?
Do you have good people skills?
Are you organized?

What to Consider When Expanding Your Business? – ” Grow too quickly and you can take on costs your business may not be able to support. More importantly, grow too slowly and you may miss out on valuable opportunities. Make sure your plans fit with market conditions and with your personal goals.”

Interactive Tool to Help You Write a Business Plan -Take advantage of this interactive tool to help you chart the future of your business.

10 Ways to Improve Cash Flow of your Business – “In the business world, cash is king. You may anticipate large profits in the next six months, but if you don’t have enough cash coming in to cover your expenses during that time, you may not get a chance to realize those earnings. That’s why it’s important for all businesses to develop the right strategies to maintain a healthy cash flow. The following tips can help:”

Doing Business with Brazil

Brazil Jamaica Chamber of Commerce, Industry and Tourism

The Brazil-Jamaica Chamber of Commerce, Industry & Tourism (BJCC) was founded on July 1, 2008, in the city of São Paulo, Brazil. This was a historic event and one which marked the beginning of closer commercial, cultural, industrial and tourism relations between the two countries.

This non-profit organization was created with the fundamental statutory objective to incentivize, increase and maintain socio-economic ties, bi-lateral trade, cultural and tourism relations between the two countries. We also aim to assist companies and organizations in both countries establish and undertake joint action to stimulate investment and explore new avenues for trade.

Jamaica is one of Brazil’s strongest trading partners in the Caribbean with Brazilian exports to the Island reaching approximately US$247 million in 2007 and by the end of May, 2008, Brazil’s exports to Jamaica were estimated at over US$130 million. We can see a steady increase in trade between the two nations over the years, which is definitely a positive sign.

We would like to invite both Brazilian and Jamaican companies to participate in this lucrative venture by confirming your membership to the Brazil-Jamaica Chamber of Commerce.

SOURCE: BJCC (Brazil – Jamaica Chamber of Commerce)

Jamaica-Brazil Chamber of Commerce now official

GOJ endorses Jamaica-Brazil Chamber

Online Course: Microeconomics for Managers (Jan 2013)

Workload: 6-8 hours/week

About the Course

This course is designed to introduce students to basic microeconomic theory at a relatively rapid pace. The focus will be on fundamental economic principles that can be used by managers to think about business problems, including those inside the firm (relating to the problem of administering the firm’s resources in the most cost-effective way) and those outside the firm (relating to broader market and government forces that can affect the behavior of firms). The course will not deal directly with standard “managerial economics,” which tends to emphasize the mathematics and statistical techniques used in optimizing firm decisions. However, every effort will be made to apply basic principles to management problems, mainly
those relating to getting incentives right for customers, suppliers, workers, managers, and owners. Accordingly, this course will focus on an emerging subdiscipline within economics, organizational economics. It will stress methods of thinking, and students will be evaluated on their ability to recall, use, and extend the methods of thinking that are covered during the quarter.

About the Instructor(s)

Richard McKenzie is the Walter B. Gerken Professor Emeritus of Enterprise and Society in the Paul Merage School of Business at the University of California, Irvine. He retired from the University of California, Irvine at the end of June 2011, but only to pursue an array of academic and non-academic (business and services) ventures, including the development of this online video lecture course.

Course Syllabus

Week One: Economic Thinking. Topics include rational behavior and the law of demand and Maslow’s Hierarchy.

Week Two
: Property Rights and Trade. Topics include property right, markets, the prisoner’s dilemma, and comparative advantage.

Week Three
: Competitive Markets and Policies. Topics include supply and demand, market efficiency, labor markets, adding features to products, adding fringes to pay packages, and more.

Week Four
:  Competitive Markets – Prospects and Problems. Topics include incenttves, trust and welfare, external costs and pollution rights, external benefits, the logic of queues and others.

Week Five
: International Trade and Finance. Topics include international trade and protection and exchange rates.

Week Six
: The Theory of Demand and Applications. Topics include the elasticity of demand, rational addiction and network effects.Week Seven: The Theory of the Firm. Topics include principal-agent problems, firms and coordinating costs, opportunistic behavior, and make-or-buy decisions, franchising, and leverage and moral hazard.Week Eight: Cost Structures. Topics include short- and long-run cost structures.Week Nine: Market Structures. Topics include production under perfect competition, production and pricing under pure monopoly, taxation and regulation of monopoly, perfect and imperfect price discrimination, market segmentation, monopolistic competition, oligopoly and cartels, contestable markets, and natural monopoly.
Week Ten: Special Topics in Market Theory. Topics include problems with monopoly theory, the lemon problem, first-mover advantage, the innovator’s dilemma, competitive labor markets, monopsony labor markets, and executive pay.

Recommended Background

Some microeconomic courses are math-heavy. They require calculus as a prerequisite. In this course, the goal is to instill the economic way of thinking about business. Little math is used in the lectures (and Professor McKenzie’s textbook to which the lectures are tied), but that does not mean the analysis will not be sophisticated, challenging, and rewarding.  Indeed, on finishing this course, students will be impressed with how challenging and sophisticated business decisions can be and how useful the economic way of thinking can be in understanding business problems and in guiding business decisions.

Suggested Readings

The video lectures can be used with several microeconomics textbooks.  However, they work best with Professor McKenzie’s own textbook (written with Dwight Lee), Microeconomics for MBAs: The Economic Way of Thinking for Managers, which can be ordered by clicking on the title.  Although “MBAs” is in the title, the book is accessible to undergraduate students who are serious about learning how the economic way of thinking can be applied to business problems.

Students should also consider ordering the sixth edition of Richard McKenzie and Gordon Tullock’s The New World of Economics (Springer, 2012). Professor McKenzie will occasionally draw lecture topics from this book. This book also applies the economic way of thinking to an array of social and business problems, from the economics of marriage and obesity to why popcorn costs so much at the movies.  Because of the range of conventional and unconventional topics covered in every edition of The New World (with the first edition released in the mid-1970s), it might rightfully be considered a predecessor to Freakonomics, a widely read economics book (which is recommended for students who want to expand their coverage of applied topics beyond the content of this course).

Course Format

This is a complete college and MBA-level course in microeconomic theory, covering fifty-eight lectures, which range in length from twenty to thirty-five minutes. These lectures contain as much content as any college-length course in microeconomics.  Although the video lectures can work with several microeconomics textbooks, they work best with Professor McKenzie’s own textbook, Microeconomics for MBAs: The Economic Way of Thinking for Managers, 2nd ed. (Cambridge University Press, 2010).  While “MBAs” is in the title, the content is accessible to all students (undergraduate and graduate) who are serious about learning how economic principles can be applied to business.  Professor McKenzie has provided a longer video introduction to the course — which gives details on the course, shows how the lectures will appear, and provides a sample of his online approach to lecturing – on YouTube.

For those students who want to have the video lectures on their computers’ hard drives, a complete set of the video lectures can be ordered via email after January 1, 2013 from the DVD distributor (to be identified).

Entrepreneur Grace Foster-Reid and her Buzz Honey Wine

IT may seem a stretch that bees can make wine, but honey sure can.

Mandeville-based entrepreneur Grace Foster-Reid started selling three flavours of her Buzz Honey Wine in Kingston and Mandeville supermarkets this month.

Her product has also ended up on the shelves of stores in the Norman Manley Inter-national and the Sangster International airports

The alcholic beverages were produced by fermenting a solution of honey and water, which were flavoured by fruits such as sorrel, star fruit and otaheite apple.

It takes in excess of a year for the fermentation process to be completed, according to Foster-Reid, but if the mixture isn’t put under the right conditions, it could turn into vinegar.

And while honey wine is not a new concept — it is regarded as the ancestor of all fermented drinks — Foster-Reid, a Massachusetts Institute of Technology-trained engineer, stumbled upon it while working in the factory where she has been making confectionary.

“It was an accident,” she said. “It took a series of tests, in the laboratory before I perfected the drink.”

In addition to “getting some friends a little drunk” and conducting market research, the entrepreneur, who turned to her family’s bee-keeping business when she lost her job at one of the closed bauxite companies, spent the past three years tweaking the product.

Last year, her company named EcoFarms started making and selling a confectionary called Honey Stix. Foster-Reid said that the sweets, which have 10 different flavours, have been doing well in the local market.

She currently employs seven workers in her business, and has five suppliers. The fruits she uses to make her products come from local farmers.

The sorrel is from St Elizabeth, the star fruits are sourced in Clarendon, and the apples are from Foster-Reid’s farm. Continue

SOURCE: Jamaica Observer

 

Review of Jamaica’s Economic Performance July – September 2012

The Planning Institute of Jamaica published a report dated November 20, 2012. This report covered the performances of different sectors of the economy such as agriculture, forestry & fishing, manufacture, construction and tourism.

Here are some of what you will find in the report:

“For July – September 2012 inflation was 2.1%. For January – September 2012 inflation rate was 5.3%.”

“For July-September 2012, real GDP is estimated to have contracted by 0.6% relative to July-September 2011.”

“The Agriculture, Forestry & Fishing industry contracted by an estimated 0.5%, reflecting: Traditional Export crops, down 6.1%…Animal Farming, up 3.3%”

“Contraction in Building Construction due to slowing in residential and non-residential construction projects – Housing Starts, down 57.0%; Decrease in the volume and value of mortgages by 45.0% and 12.8% respectively.”

Regarding Tourism the Planning Institute of Jamaica reported “Real Value Added for Hotels & Restaurants grew by 2.3%. This reflected: Total arrivals, up 5.0%, Stopover arrivals, up by 3.0%, Cruise passenger arrivals, up 9.4%.”

Regarding the Exchange Rate the Planning Institute of Jamaica reported “The average nominal exchange rate at the end of September 2012 was $89.93 per US$1.00, representing 1.4% nominal depreciation compared with end of June 2012.”

See the full report here.

How Pinterest Can Help Your Jamaican Business

WHAT IS PINTEREST

Pinterest is an online bulletin board or as Pinterest calls it, “a virtual pinboard.”

“Pinterest lets you organize and share all the beautiful things you find on the web. People use pinboards to plan their weddings, decorate their homes, and organize their favorite recipes.”

Basically, Pinterest allows you to put or “pin” photographs/images on a “board.” These photographs/images can be your own or those of others. There is usually a theme that identifies the photos. Take a look at the pinboards below that show images related to food and clothing:

pinterest.com/pillsburyideas/

pinterest.com/wholefoods/

pinterest.com/nordstrom/

Pinterest can be an asset to your business if photographs or images of your products can greatly influence customers’ buying decision. If your company bakes and sells cakes and pasteries, Pinterest can improve your business. If you sell arts, clothing, shoes, furniture or sporting goods, Pinterest is a great way to promote your business.

Pinterest Now Allows Business Accounts

Recently Pinterest Product Manager Cat Lee, announced on her blog that it is now possible to create a Pinterest business account. “We want to help more businesses provide great content on Pinterest and make it easy to pin from their websites. Today, we’re taking a first step toward that goal with some free tools and resources.”

Cat Lee also stated “We now have two sets of terms—one for people and one for businesses. The business terms help guide businesses on how to use Pinterest. They also enable us to separate the provisions meant for businesses from those meant for regular people. As a result, we updated our user terms to be half as long. We also took the opportunity to simplify the language as much as possible.”

If you don’t have an account with Pinterest, you can sign up on Pinterest for a business account. Existing personal accounts on Pinterest can be easily converted by following the steps on the business site.

Think of Pinterest as an online bulletin board where photographs can be pinned. If your business can be helped by displaying images of your products, then Pinterest is a great marketing tool. Take a look at the following Pinterest accounts to see how photographs/images can enhance your business:

http://pinterest.com/kraftrecipes/

http://pinterest.com/pillsburyideas/

http://pinterest.com/wholefoods/

http://pinterest.com/williamssonoma/

http://pinterest.com/thomasvillefurn/

http://pinterest.com/nordstrom/

http://pinterest.com/zalesjewelers/

http://pinterest.com/cowboyboots/

http://pinterest.com/neimanmarcus/

http://pinterest.com/homedepot/

http://pinterest.com/anthropologie/

http://pinterest.com/organizedint/

How Easy is it to do Busines in Jamaica?

The Jamaica Gleaner carried an articles yesterday entitled “Doing business just got harder.” In this article Jamaica is compared with countries like Greece, Uruguay and Sri Lanka on things like taxation, imports, getting permits etc. This article is worth reading.

Here are excerpts from the article:

“The result was that the number of tax filings and payments a company makes on average fell from 72 per year to 36, and the number of hours spent filing tax returns each year was reduced from 414 to 368, although it was still higher in 2012 than the six countries to overtake it on that measure.”

“Moreover, the time it took to import goods to Jamaica fell from 22 days to 17 days, while the time to export fell from 21 to 20 days.”

“In Jamaica, the number of days and procedures to start a business remained among the best, but there was no improvement in dealing with construction permits, while the cost of electricity per company, compared to income per capita, increased from 355 per cent to 557 per cent.”

Read the complete article here.