I have been fascinated by business since I was young. My dad loved to go to dinner with his customers, and for some reason; I always went along. I was never very quiet, but my dad didn’t mind my chatter. One time after looking at the menu I was overwhelmed by the prices. (As a six-year-old, they seemed very high.) “Dad, I said, they must make a lot of money here. Look at the prices on the menu.” My dad laughed and said there are lots of things to consider when making money. You can’t sell just one dinner; you have to sell lots of them. It also depends on how many people can sit in the restaurant, and how much they ate. I was fascinated and began counting the chairs.
I asked for a pencil, so I could figure out how much money would come from fifty chairs. By the way, I was a math wizard; to me, it was a game. The more questions I asked, the more dad answered. I wondered, was it really as simple as dad said? The most important thing he said, which I’ve never forgotten is that ‘you have to take in more money that you pay out.’ That made sense to me since I was selling seeds to pay for my baseball glove! Of course, there are things that get in the way of ‘money in money out.’
Some retailers don’t subscribe to the theory of “taking in more than they give out.” Simply put, business is about numbers; how you get the numbers isn’t that simple. If you don’t know your numbers, eventually you will have a problem. Forget all the things between ‘money in money out,’ this is about money.
- Does your staff give away things to make customers happy? (Things you need to charge for?)
- If a customer is short, do you just forget it? (It’s just a few bucks.)
- Do you waive a service charge because you forget to put it on the bill? (Who’s moving the furniture?)
- Do you forget to bill a customer because it’s only a few bucks?
- Are your employees embarrassed to tell the customer she added wrong? (It was only a couple of bucks.)
- Are your employees embarrassed to tell the customer they added wrong? (It was only a couple of bucks.)
- The customer decided to take the discount despite the bill was over 30 days.
- Do you give out supplies and don’t bother collecting? (It was only a couple of bucks.)
When was the last time you checked out your piggy bank where you throw your change?
Taken from Lisbeth’s book, “101=1 Ways to Heat up Your Bottom line.” Available at Amazon. To have Lisbeth speak at your business or schedule a consultation; reach her at 518-495-5380 or Lcalandrino@nycap.rr.com.