Happy Christmas

Seasons greetings to all. I have been working on the next fortune – only it is nothing I can share until everything clicks. Hopefully I’ll blog about it afterwards.

Between now and 5 Jan 2004 I hope to do nothing related to business or investing. Well except for some reading, planning and thinking. The aim of this time off is life balance. By deliberately taking a break I want to return refreshed and enthusiastic for the huge challenges 2004 is offering.

Will my business survive? Will my investments work? Will my personal life grow and be energised? Questions for next year.

As usual email or comment any questions.

Hopefully in the hiatus I’ll have a chance to fix things around here. But not if it starts feeling like “work”. The mantra is life balance.

Winning Business

As expected, the traffic to the warehouse sale has dropped off over the last six weeks. Two weeks ago, I asked our advertising sales rep at Fairfax Community Newspapers to radically change the look of our ads. We really liked the first design they produced for us, but it was time for a change.

We did consider using an advertising agency in the beginning but thought we’d give Fairfax a go first.

Sadly, Fairfax acted as if they were a one trick pony. We got variations on a theme. The same font, the same photo style, the same copy. Then we told Fairfax the same thing. They asked us to produce some ideas. Now these were the guys who said they were the professionals and had designed all these ads they showed us! Call me naive, but I got the sense that now they’d won the business they wanted to do as little work as possible.

Eventually one of our staff sat down at with a publishing program and knocked up a brand new layout in 10 minutes using a clip-art Santa and default fonts. We emailed and faxed it to Fairfax with radical change!!! on it.

Fairfax used a different clip-art Santa (more traditional in my opinion), redimensioned the ad to fit the space. They used almost the exact same colour scheme. I now have one extremely annoyed staffer, “they’re supposed to be the experts?” she cries.

So this week sales are up 45% week on week. The weather is a factor – the rain stopped bucketing down. Christmas is factor: second last weekend before Christmas – early shoppers are finished, late shoppers haven’t started so some make the trek out to a warehouse sale instead of a mall. That this is our seventh weekend open lead to strong repeat business. But mainly I put it down to the changed ad. We saw a lot of new customers.

I believe the original ad design drew one subset of customers. It couldn’t draw people who didn’t notice it. Playing with subtle design changes could not attract customers who skimmed over it the first 4 times.

I discuss this with our Fairfax rep, reminding him that they claimed to be experts and had done all these designs. He offered that it was a busy time of year and the design team didn’t have the time for it. Not the answer I was looking for.

Anyway I talked to a supervisor at Fairfax. She said that sending a layout is often interpreted by the designers as an instruction. Fairfax are preparing 5 new layouts this weekend for our 2004 sale. We’ll pick the 3 best and roll them through changing every 3 weeks.

The cynic in me says Fairfax want to do as little as possible to keep the business. After all they won it in the first place without a lot of effort. Realistically I think it is another case of finding how to communicate with another business. We know our business, they know theirs. Once we both understand how we do things it will go smoother.

So I’m going to spend time educating Fairfax on what we do value and what don’t care about. But I think I’ll only give them one more chance before I take my business elsewhere.

Business Software Blues

I’ve decided I cannot run the company for another year using our dumb software. We use MYOB for financials and a custom written stock control system that doesn’t integrate to anything. Because we run multiple warehouses and supply consignment stock to distributors, MYOB can’t handle it.

We can go for a proprietary solution. But that would require extensive customisation and the entry price on these advanced ERP/Financials packages is shocking. Paying $500 to $2,000 for a Bank Reconciliation module is crazy. I’d still need modules for at least General Ledger, Accounts Receivable, Accounts Payable, Inventory.

We’re a small growing company so I’m looking for some open source solutions. We’ll probably put the customisation out to tender on the internet. That should be interesting.

In the meantime I’m evaluating Compiere ERP+CRM. If anybody has any suggestions I’d appreciate it.

Shutting down WA

I shut down my Perth warehouse last week. The week before they had reported sales of $74.55. For that I paid rent on a warehouse and a retainer for the Manager. The bloke over there seemed more interested in getting toner for the photocopier than generating sales or distributors.

The warehouse sale in Sydney keeps me busy. We’ve just started a warehouse sale in Brisbane. Neither I nor Sam (my National Sales Manager) had time to fly over to Perth to shut it down. But it needed closing before December 1.

Sam thought it would take at least a week (he’d closed the Victorian Warehouse three years ago). A friend had long ago suggested I hire Forstaff to send a bunch of casuals in to do it.

I called Mick, Forstaff’s WA manager, who sent Gordon around to estimate the job on the sly. Gordon figured 3 guys would take no more than 3 days to pack it all up and load it on trucks to the east coast. Gordon also had a chat with my WA manager, who didn’t know what was coming but made an unenthusiastic impression anyway.

Wednesday morning local time I got on the phone and broke the news to my WA manager. We just couldn’t afford to run that office anymore. I sent Gordon and the three casual storemen and packers in on the other line and asked my WA manager to hand him the keys, gather any personal effects and go home.

I’d never fired anyone by phone before, it didn’t feel good, but it had to happen to save the whole company.

The Forstaff gang managed to empty the warehouse onto 73 pallets in three days. Great work and at a lower price than me flying over to supervise.

Get a lawyer son

I was in court on Friday for the Geezer’s assault on me. The staff who were witnesses were also subpoenaed to appear.

He denied punching me or hitting me with an office chair, but admitted only pushing and shoving me.

However they argued he was a fine citizen an a pillar of the community. They handed up references to support that claim.

His lawyer claimed he lost control of his company after 20 successful years through some machiavelian means. His laywer also said I took control of the company when he suffered a debilitating stroke two years ago.

Successful company? Please explain the three company liquidations since 1995.

The stroke was news to me and his siblings. It’s a pretty amazing recovery to assault me 12 months later and stand in court unaided after 2 years.

Anyway, he deeply regretted losing his cool and pled guilty to common assault.

The court accepted the guilty plea, did not record a conviction and put him on a six month good behaviour bond. A great result for him and I’m actually very happy as well. So win-win for all. 😉

Then we dealt with my request for an Apprehended Violence Order. They didn’t want a bar of it and offered to extend their undertaking to not contact me without our lawyers being present. After some discussion we’re in court in February next year on the AVO. In the meantime his undertaking is part of his bond.

The next round is over 10 years of long service leave he and The Wicked Step-Mother claim I owe them.

But it goes to show that if you ever get into trouble with the police, You better get a lawyer, son, you better get a real good one.

Making tough decisions

My Western Australian operation is a mess.

The manager I have over there was a fantastic sales rep and a all round good bloke. Unfortunately he isn’t generating the results I am after. I don’t think it is his fault as such, but he obviously isn’t the right guy for the difficult job of turning that state around.

So I have choices:

1. Coach him through a turn around
2. Find a new manager
3. Shut down the operation and liquidate the stock over there
4. Shut down the operation and freight the inventory to the east coast

I haven’t decided what to do yet, but I need a decision before the end of November. Whatever happens I also need to decide whether to do it myself or get my sales manager to fix it – it was his idea to hire the WA manager in the first place. Not that it absolves me of responsibility for WA, it is my company after all. This is time neither of us can spare in the Christmas selling season.

I’ve been hoping it would turn around into Christmas, but it doesn’t seem to be the case. I’ve never fired anyone for not making something happen before.

New Name Needed

I’ll need to rebrand the book, toy and gift company in the new year for two reasons. I’m not talking about WealthEsteem.org or Wealth Esteem brands here.

Firstly I cannot get a good trademark on our current brand names. That means that any brand equity I build is at risk to similar named companies or to new entrants with more money to spend.

Secondly the warehouse sale has shaken me and my staff up. We have renewed passion for our business. Staying enthusiastic in the face of bad market conditions has been tough. We’re celebrating our wins at the moment. So our current name does not go with warehouse sales, retailing or the growth strategies we are developing.

Branding theory or fashion falls in two camps at the moment. One camp says to choose a descriptive name that tells customers exactly what they’re getting. We Buy Houses is a good example. Any doubts about what they do? This allows a company to rapidy capture immense mind-share in a crowded market space.

The alternate view is to create a name that is evocative but made up. That lets you build real brand equity. Looking at the world’s most valuable brands shows Coca-cola at number one, the rest of the top 10 being similarly fictional or family names (like Disney and Ford. Possibly IBM as the only descriptive brand brand in the top 10 but how many people know what it stands for?

So while the biggest play is to invent an evocative name, it takes money, time and luck to build it to the top. But once that brand grows beyond it’s home town its value rises exponentially.

What do you all think?

Warehouse sale continued

Last weekend’s sale was 60% better than I’d hoped. At 11am on Saturday people were lined up nine deep at the cash register.

As a result, I’ve rebooked the ads and we’re on again over the next two weekends. The ad booking got messed up for this weekend so we are only in one local paper at 75% of the size. We’re getting that insertion free. Next week I’ve extended to the Bankstown Torch and back to bigger ads.

This weekend may be a bigger drop in sales due to the smaller ad and circulation. It will be interesting to track that.

I have the cash register dockets to analyse now, hopefully I’ll integrate that info with future data. But I had an ancient cash register which only allows 4 departments and no detailed sales analysis. That is no way to re-design a business model, so I was looking at a better (expensive) point-of-sale system when we found one in a box in the back of the warehouse!

Hoo-boy we were excited to get that working. It’s a 486 running Windows 95 linked to a barcode scanner and a cash-drawer. The software is a DOS program called Quixale 2.6 from about 1995! Anyway I changed the company name for the printout and now it is unregistered. Dumb move especially as I had backed up the wrong directory. So now the software wont work and I can’t find the original spelling.

Anyway I’ve spent this evening looking for open-source POS software and have found a couple of canditates.

In a way it’s a good thing as I was worried about the 486’s stability. So now it will be driven by a newer PC running software we can get data out of.

Warehouse Sale

This weekend (1st and 2nd November) we’re having a warehouse sale. It’s at 20 Stennett Road Ingleburn NSW. Take the Ingleburn Industrial Estate exit off the M5 and we’re 3 km from there. I’m clearing all the ceramics and lots of books and toys. Mostly below cost. Drop by if you can.

I signed off the local newspaper ads yesterday. We’re running slightly larger than quarter page full-colour ads in two Fairfax community newspapers. The circulation is about 110,000. I’m not too impressed with the placement. Pages 35 and 48 but we’re new at that too. The cost was just under $1,500.00.

I’ll post a copy once I get the colour proof or scan of the actual ad in today’s papers.

I decided to skip the letterbox drop this time. Last year it cost us about $3,000 to letterbox 55,000 homes for a six week warehouse sale.

This year it’s a two-day event. Boy I hope it works. I’d like to do another before Christmas.