Monthly Archives: October 2011

Recipe for Profit

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The familiar phrase of “’You can’t cut your way to profit’” doesn’t true anymore, at least not for small business, as posted by the Globe and Mail.

The 5 steps listed are:

1. Develop a Spend Strategy
The importance of an effective strategy proves to be able to reduce spending, and with reduced costs, the break-even point will be lowered.

2. Just One is Never Enough
You would have a higher risk if you put your money all on one thing.

3. Consolidate and Leverage
Suppliers will tend to give a lower price, if you order the large quantity (Ex. Costco), thus, reducing your costs. However, what if your business doesn’t need a large quantity, how would you obtain that reduced cost? By inviting other retailers to orders together, everyone can benefit from the lower price.

4. Manage Relationships
Maintaining a close relationship with the supplier is important because you depend on them to deliver the products in a timely manner. Furthermore, it never hurts to have a strong and trustworthy network.

5. Monitor Progress
Last, but not least, monitoring the progress of the business is always important. Since the economy is volatile, anything can happen!

Profit Growth

On the topic of food…

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As I chanced upon Stephen He’s post about “The Horrors of Dining Out in China“, I recalled my own personal trip to China and the restaurants I visited there.

I completely agree with Stephen that eating out is unavoidable as a visitor. Additionally, the statistic that one in ten times we dine out we will come across “gutter oil” is truly frightening.

I understand that competition within the restaurant industry is ruthless and that price and taste are important factors in determining the success of a business. However, cutting price by using the cheaper (and more disgusting substitute) “gutter oil”,is unacceptable.

Not only is it bad press if the restaurant is found out, but it can also harm customers’ health. Even if a specific restaurant isn’t found out, as Stephen said, “[customers’] willingness to dine out decreases”. After all, your health is worth more than the little bit of money you save when you purchase a dish. To the restaurant owner, it is also a better choice to not use “gutter oil” as it would show that you care about the customer, which will help build customer loyalty in these greasy times.

Your food has arrived!

What’s in a name?

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Names are what we use to identify a firm or individual.

Hence, a name change is an action that requires a lot of thinking on and a decision that shouldn’t be made hastily. Why give up what has been established for something brand new? Specifically, “‘why would a company change its name’”?

The company, Achiever Inc., formerly known as, I Love Rewards Inc., did exactly that; they changed their name.

Name changes are often an effective way to remarket the brand or to better reflect what the brand represents. There are also cases where a name change occurs due to copyright infringements. However, once a company has successfully changed its name and perhaps its image as well, it can lead to a change in the brand’s position. In this way, the brand may be relabelled in the consumers’ views as a new product catering to a different consumer group. Difficulties with a new change includes: rebuilding the brand to the previous level and regaining consumer recognition.

*Ring Ring*

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Landlines vs. Cellphones

From what I gathered in the article, “Low wireless rates lure more Canadians into cutting cord on landline”, more and more Canadians are opting for wireless phone service only.  By 2016, studies show that one-third of Canadians will cut their landline phones and just have cellphones.

So why would people do that?

The article states that competition from the many phone companies have been driving wireless rates downward. I feel that as more and more people are always on the go, cell phones become more and more useful, since people can be in contact with others at all times. Furthermore, a cell phone offers more functions than a landline, such as data and apps. Cellphones also add benefits to people by offering convenience and greater privacy, unlike landlines where others can unintentionally eavesdrop on your phone call.

However, on the negative side of things, there is the controversy about cellphones and radiation. So, until the day when cellphones emit miniscule amounts of radiation even for long periods of talking, landlines will still be in existence.

*ka-ching*

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In the U.S., some stores are considering “phasing out self-service checkouts”.

From my experience with self-checkout counters at grocery stores, I found them to be confusing.  The line-ups were long and didn’t move any faster than those with cashiers were.  Often, I would find myself in need of help from an employee when operating the machine; hence, I would rather go to a counter with a cashier. At least with a cashier, the only things I really have to pay attention to are just the prices and the balance.

Self Serve Checkouts

The concept of self-service seems like a good idea; after all, we have self-serve gas stations, which people enjoy using. So, why wouldn’t the concept work for grocery stores? Furthermore, the grocery store can hire fewer cashiers, reducing its expenses. It also adds value to some customers by offering them another checkout option.

Unfortunately, a grocery store contains more items to process compared to a gas station, which means that the self-service checkout has a higher chance of making pricing errors. Pricing errors happen, even with a human cashier; however the cashier being already familiar with the cash register can easily fix the problem.