The first type of investment we talked about in the last post was a
one-time investment but most of these will have already been made when you meet the business owner, so there isn’t much opportunity to be of help in this area. However, one item which would be a great help is a touch screen point of sales solution. Many owners want a POS System but don’t want to invest the thousands of dollars necessary to secure one. Depending on the size and number of locations of a business, they might spend from $4,000 to $10,000 or more.The
fixed cost of the business doesn’t apply to our solutions specifically. However, if you understand this philosophy of the cost per hour to operate a business, you can really be a help to your clients. If the business owner analyzes the amount of money to run the business per hour, this will drastically change the perception of financial performance. Just that one insight might help you get your foot in the door with the business owner. Ask if the hourly costs has been analyzed, does the business owner know how much it costs to operate their business each hour? The next question is whether changing hours of operation has been considered based on hourly cost analysis.Example: If open 9 to 6, are there hours during that time when there is no profit? Perhaps opening from 11 to 8 might offer more profitable hours and less unprofitable hours. Encourage the retail business owner to be creative with hours of operation to maximize return on investments. In offering truly helpful insights you are creating greater possibility of selling the small business owner.
Lets talk about payroll costs. Here again this needs careful analysis. The point of sales system will give reports by hour, by employee, based on costs of goods sold, all highly valuable information. Payroll is the biggest investment a small business owner will make. The business owner needs to carefully study where the payroll dollars are being placed for biggest return on investment. In a retail business, owners need reports more than anything else to determine where to place payroll dollars to maximize the investment. The data available on a point of sales system is absolutely crucial to making important business decisions. If they learn that they do most of their revenue between the hours of 6 and 8pm, they may want to take payroll dollars that they are investing in the morning from 9 to 11 and add more people to the evening shift to provide better service.
I hope you are enjoying these short posts on how to become a true small business expert! Watch for the next post where we’ll discuss revenue generation and some other exciting topics which will help you talk to your clients and create the best custom solution for them.
James Shepherd
Read previous post: How to Sell Small Business Owners – Retail Part #1
How to Sell Small Business Owners – Retail Part #1
Read next post: How to Start and Run a Merchant Services Business
How to Start and Run a Merchant Services Business