Category: Article Directory

Dunkin Donuts vs. Starbucks

Dunkin Donuts wanted to know. To find out they offered to send their customers to Starbucks and paid them to go there and drink and eat. But they also paid Starbuck customers to come to Dunkin Donuts to eat and drink. In exchange, the people involved agreed to answer Dunkin Donut’s questions.

This test was reported by the WSJ and what Dunkin Donuts discovered was that there are very loyal people to both businesses and they are not interested in the competitor. The Starbucks Tribe will continue to go to Starbucks and the Dunkin Donuts tribe will continue to go to Dunkin Donuts. That was the conclusion.

Why did Dunkin Donuts conduct this test? The business of Dunkin Donuts has a strategy of growing and attracting more customers. So they want to know more about what appeals to people. Of course they could have their customers in a data base and communicate with them regularly and offer them incentives for answering surveys but that is all the subject of my rant in other articles at www.stevereports.com

Duncan Donuts used a traditional focus group approach. Duncan Donuts is to be commended on testing. They are to be commended on wanting to know what changes, upgrades, new product offerings will appeal to their customer. When you review their history, you may conclude they should have done this more often. The facts are most companies fall into the trap of not reinventing themselves. Why is this important to do? Well, look at Kmart. Do you recall when they were in Chapter 11? How about Delta airlines and General Motors? Do you think Microsoft can be in trouble? Interesting to look at history and then ask the hard questions?

There are lessons to be learned from the work done by Duncan Donuts. I remember working with the leaders of The Limited when they were the premier retailer in America. The culture was amazing. New fashion ideas, new store formats, new promotions were always being tested. Merchandise managers were expected to bring their insights of what the competition was doing to the famous weekly Monday meetings where performance was scrutinized.

The point is every company has a development history and at a point in time if you become a champion, a challenger emerges. This is the like playing the game king of the hill kid as a kid. Whenever you are winning someone will be out to take your place.

How do you sustain revenue and profit growth long term? How do you do that when as soon as you are on top there is a challenger? In The Profit System I teach how to track information that tells you how you are doing. Initially, the information is developed for you to track actual vs. plan and the plan is your own performance improvement plan. This evolves to where you are confident in your ability to achieve internal targets, then you set your site on local, regional, national or international champions. At that point your goal is to be the champion. The Profit System is free.

Why is that? Why do I offer something that I promote as being so valuable for FREE when I should be selling it for a million dollars or 10 million dollars or more? Simple, I know this works, and as Joel Bauer says (www.joellive.com) my life does not change at all if you use what I teach. But yours is likely to change a lot. If I can be a catalyst of positive change for you and your company, I am delighted to offer these principles and The Profit System to you at no charge.

Wait there is one more thing. There is a major price to pay for using this system. This price is your time, attention and action to implement. My material is FREE. Even if I were to charge $50,000 for the this material and I am considering that, it is a small sum in comparison to the time you and your company will invest to apply the principles of The Profit System. Return on investment is off the charts. So if you want to make a lot more money go to The Profit System and register for the FREE course.

Will Ducan Donuts™ latest testing mean new store formats will be hugely successful? I don’t know. I do know this if they keep monitoring and keep testing they will figure it out. You can also solve the issues facing your business with a rational management system. I have given you one source for a management system roadmap.

Sending you energy of health, happiness, prosperity

Steve Pohlit

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About: Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies.  Steve is a business owner and an expert business consultant focused on building profits and net asset value. He is very experienced with Internet marketing and social media marketing.  All articles published by Steve unless specifically restricted may be freely published with this resource information.

How To Diffuse A Competing Ad Campaign

Calculating return on investment of brand advertising is an art. When a commercial is run on electronic media, whether it is TV or radio, the methods used to calculate return on investment include ratings that measure viewers or listeners vs. sales in the relevant period following the promotion. Since I work with companies on more objective ROI calculations based on direct response marketing techniques, you might imagine I question the effectiveness of brand marketing.

An ad agency executive would probably give me a dissertation on what I am missing and it is doubtful we would ever reconcile. I remember the discussion with the Vice Chairman of a major international retailer on the topic of decentralized organized structure vs. a centralized one for administrative services common to multiple companies operating under the same corporate umbrella. It is an issue that is never reconciled. You either have one point of view or the other. There is no middle ground on some issues. I think brand advertising vs. direct response marketing falls into the category of irreconcilable differences between marketers. Back to Coke.

I must admit the most recent ad campaign is awesome. The scenes make me want to go out and buy the product. Correction, they make me want to go out and live the scenes. This is particularly amazing, since I watch very little TV and rarely react to an ad in terms of thinking of making a purchase. One of the current ads being run by Coke is where a senior citizen is shown experiencing Coke for what is supposed to be the first time. The experience of drinking Coke for the first time motivated him to call a childhood idol for the first time and tell her he has always loved her. It also motivated him to run with the bulls for the first time. All first time acts for him. Very well done.

Congratulations to Coke. This is a campaign that links the emotional response to the product. If others have similar reaction to this as me, then the sales numbers should being increasing for Coke during the running of the ad campaign. On the other hand, if I am a competitor I would quickly mass out an end cap displays in my A category stores in A category markets, with pricing at about $1.00 less per 12 pack of Coke and diffuse their entire campaign. Of course I would also attach a bounce back coupon on that same display and link it to a customer contact page on line. When the contact information is filled out, the customer receives additional promotions and gifts on line. Once I have that contact information, I then know I have a person who bought my product and that is a customer whose loyalty I can now nurture and strengthen. This is a strategy that capitalizes on the media ad campaign of a competitor and turns it to your advantage.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource information.

Retailers Can Win Customers Without Struggle

Mark Albright, staff writer for the St. Petersburg Times published an article in the Sunday paper on retailers struggling to win back customers. He does an excellent job at identifying the key issues customers face when shopping in many stores. In summary, customers know what they want from their shopping experience and they don’t get what they want most of the time.

Two charts were provided in the article. One showed that 68.4% of those responding to a recent poll said knowledgeable, helpful, friendly staff was the most important criteria for a positive shopping experience. The other chart reported that 50% of the people surveyed reported retail service has gotten worse.

Shoppers have always wanted a friendly environment with knowledgeable staff. What is most alarming is how poorly retailers continue to meet the expectations of their customers. With almost 70% of the customers ranking knowledgeable, friendly staff as most important, why is it that so many retailers continue to be obsessed with having compelling price? Studies have consistently shown and Mark points this out in his article as well, that less than 10% of the shoppers name price as the most important reason they shop a store.

Let’s examine pricing and promotion a bit deeper. The paper that Mark Albright writes for has a daily circulation of 1.2 million. On Sunday, like all large metropolitan areas, the paper is thick. Most of it is advertising circulars. Most have between 4 – 20 or more color glossy pages and this format is used by most of the major retail chains. Stores attempt to show items attractive to the largest number of people and offer special buys or sale pricing. The goal is to drive traffic to the stores.

Normally on a store by store basis, retailers are able to tell how effective a particular circular was by measuring customer count (customers that actually buy), average sale and items sold. Most retailers have these statistics, but there is one critical piece of information they do not have. They do not know who it was that purchased something. They do not know their physical address, they do not know their email address and do not know their customer’s phone number. There are exceptions and I will address those shortly. However, in general, large and small retailers spend huge amounts of money on print advertising to drive customers into their stores and they don’t even know who their customer is. Consequently, they are unable to thank the buyers, hear their comments and suggestions and they are not able to personally invite them back.

Here is a brief summary of the issues so far: consumers want knowledgeable and friendly sales staff and over 90% of them place importance on knowledge and friendliness over price. On the other hand, retailers spend a lot of resources developing promotions based on price to drive traffic to their stores. When the customer gets there, not just the price shopper but the loyal customers as well, the retailer is not properly staffed and the staff that is working is not properly trained and managed. I call this a mismatch in expectations and delivery. The result of that formula is a high rate of retail business failure with stores that fail being replaced by new ones that operate the same way. You know what you get when you keep doing things the same way. What is the solution? Keep reading.

When the subject of price in retailing is mentioned, Wal-Mart’s name always comes up. Here are just a couple of things I noticed about Wal-Mart recently. First they are increasing the number of more upscale items offered. Why are they doing this? It is because they understand that appealing just to the low price crowd long term is a risky business model. No retail chain founded on the low price model has ever survived long term. None. What else have I noticed? The other day I noticed a Wal-Mart banner on the front page of Yahoo.com This particular ad was what is known in the Internet Marketing circles and Direct Response Marketing circles as a lead generation ad. I followed it through and noticed interesting “bribes” to get you to register for on line information. You could even categorize the information you were interested in receiving. Wal-Mart promised to give you advance notice of their best deals for the store closest to you. Notice I said store closest to you. When you entered your information they asked for your zip code so they could match you with relevant regional promotion.

Wal-Mart is taking the lead again in building their customer data base. I don’t think they have taken this to the store level, which where it really needs to be implemented. But they are headed in the right direction.

Do you need to have Wal-Mart’s system to implement a similar program? Last September I was testing the implementation of program with a small retailer in a small market. You can review more of the detail of this program at www.localretailmarketing.com We used incentives as a motivator to provide their contact information. This program was hugely successful in a short period of time and confirmed the value of capturing the contact information of your customers and communicating with them. That is the first step in bridging the gap between what customers want and what retailers deliver. Note: if you are a grocery store, restaurant, nightclub, shoe repair store, dry cleaner or any business that has customers, this applies to you.

If you are a local or regional chain of stores, outsourcing this customer contact program is the most cost effective approach. If you are not sure that is a true statement Email Me and I will prove it to you. National Chains should outsource this program in the test phase and then it is likely that in-house technology will be needed long term. Regardless, it is easy to build your customer list, easy to communicate with them and this communication builds loyalty and value. This communication process is the critical link that breaks down when this process is managed internally. In summary, outsource this entire program initially; bring the technology piece in house if and when that makes sense but keep the communication program outsourced.

Does all of this solve the problem of bridging the gap of what the customer wants and what the retailer delivers? Absolutely not! All of the fundamentals retailers are paying attention to today must continue. Having the right product in the right place at the right time is a good goal. Having staff properly trained and managed is a great goal. But this is the planet earth folks. When all the best logistical systems and human resource development processes fail .. and they will from time to time, a strong binding relationship with your customer will overcome any isolated execution failures.

Are there any examples of anyone doing this more right than wrong? I remember in 1996 when I was in my second year of operating an Internet Service Provider company that I founded. I was focusing on industries likely to benefit a lot quickly from using the tools of the Internet. One of them was mail order. I knew there would be huge benefits to catalogue retailers from using the internet. Of course when I contacted many of them and they had no idea in 1996 what I was talking about. So I let it slide instead of pursuing that idea along with a number of other billion dollar ideas I had in the early days of the commercial Internet.

Today there are numerous examples of catalogue retailers doing a great job of communicating with their customer base. Now the big gains are coming from the “brick and mortar” companies who are communicating like catalog retailers. Who are they? Well Circuit City gets my number one vote. Circuit City sends me wonderful emails in addition to their weekly print advertising circulars. Wal-Mart is doing a good job now that I am on their list. In the catalog retail business, the best is Fredericks of Hollywood. Don’t even ask me why I am on their list but they do a great job. There are other catalogue retailers that have an effective communication program in place. In fact if you order on line from any catalogue company and give them your email address, I would bet you start getting information from them. Even if you don’t order, sign up for some of these lists to see what they send you.

The biggest mistake made by companies that have you in their data base, is dropping your contact information when you have not purchased for awhile. I know of one very popular retailer with a huge mail order division that sends me tons of catalogues but not one email. When asked about this I was told I no longer receive emails because I am not a current buyer. But they continue sending me expensive to print and mail catalogues. Go figure! Recently I was talking about this issue with an author and speaker on retail industry issues and discovered the huge successes several companies are having by aggressively pursuing customers who have become inactive. However, you need to know your customer and have their contact information in your data base to execute any program including this one.

In summary, study the companies that are doing this well. Look at your own business. If you are not sure what I am advising you to do will work, call or email me and let’s “kick it around”. Click to email or go to Retail Profit System for phone contact information. I am so convinced that there is a great need for help in this area I have recently partnered with several business development experts and we have formed a new company that will provide the Internet marketing services retailers and others need. Look for a major announcement soon on this advanced service for helping your business dramatically improve revenue and profits.

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource information.

Problems Managing Corporate Sales Solved

The WSJ recently reported on the challenges Mike Hurd, the new CEO of HP, faced when he joined the company in 2005. In summary, there were 11 layers of management between him and a customer. In addition to slowing the sales development process, less than 60% of the 17,000 people in corporate sales were actually selling.

Candidly I was amazed to read this information. I always think that companies like Hewlitt Packard have the best and brightest in place along with a management system that results in maximum productivity. I often find such management controls lacking or missing all together in smaller companies but without having direct involvement in a business the size of HP, I just assumed they knew what to do.

Mark Hurd knew what to do. He restructured the organization, eliminated non performing staff and cut the buerocracy so that not only were people accountable for selling, they had the time to do it. He also selected one software product to track the sales pipeline. Is all well now? Changing culture the size of HP is not done on a dime. From experience, the fastest timeline occurs when information is used to motivate behavior. An international accounting and consulting firm that I was with for quite a while developed a complete product line named “Information for Motivation”. People do respond to what you inspect not what you expect.

Using the principles from Information for Motivation plus other resources, I developed The Profit System. The revenue module of The Profit System shows a company how to set up the sales management system for their company. Mark Hurd is using these principles with the software product he selected to track the sales process for HP. However, you don’t need a specific software product for most companies. I have successfully helped a number of large and smaller companies using Excel spreadsheets.

People have a tendency to spend a lot of time on which tools they should be using. This is a mistake in most cases. It is important to know when “good is good enough”. The goal of all of this meaning the sales management process is to drive revenue and profit. Compensation should be tied to the goal. When sales force compensation is tied to revenue you can expect higher revenue. But that does not mean you will book higher profits. For higher profits in the revenue model gross margin targets are what are key and don’t forget to account for the selling expense in the gross margin calculation.

ABC Management..I was fortunate to be trained in my first CFO position by a powerful business leader who taught simple but effective prioritization principles. To this day I think of most things in terms of A,B or C. Let’s apply that to sales force management. Who are your A customers and what are your A products? Now the goal that I have found to work the best is to have people spending 80% of their time on the A items and the rest their time moving B’s to A’s and C’s to B’s. In the C category if it doesn’t have the potential for being a B in a reasonable amount of time, often the best action is to drop the resources devoted to it.

Like many things in life this process is easy to write about and discuss, but harder to implement. But it is not that hard. With some effort on the front end there are big payoffs. In every case where I have helped a company install this process the benefits to revenue, gross margin and profit have been huge. There is more detail on this subject in my course which is free. Visit The Profit System if you want you company to make more money.

You know it the instant you see the person. It is apparent they have achieved an extraordinary measure of success and have the time to enjoy it. Steve Pohlit is an expert business consultant who developed The Profit System shows business owners how to achieve an extraordinary level of profit and the time to enjoy it. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box.

But Bill … My Business Is Different!

“If You Hang Out With Coconuts, You’re Going To Be A Coconut.” Rocky

You may not have been in Chicago but if you add this blog to your RSS feed reader you will not miss another article when it is issued. Why is that important to you? Here is one reason.

Recently I invested four days of my time and more than a few bucks with Dan Kennedy, Bill Glazier and over 600 of my closest friends all focused on further developing profit building skills. If you don’t know who Dan Kennedy is then go to this link. If you are in business you need to be reading Dan’s No B.S. marketing newsletter Click on this link for a three month FREE trial http://www.dk3monthspecial.com/your_freebie/

It’s too late to join me in Chicago, but add this blog to your RSS feeder by click on one of the links on the right hand side of this page because you will not miss another article. Since I will be giving you a number of valuable business building principles that came from the Chicago conference your are not going to want to miss any of it. Unless of course you are not interested in growing your revenue and profits.

There are conferences around the world every week. I attend on average 4-6 carefully picked ones every year. Conferences, resources I purchase from other experts and a growing network of very successful business owners form part of the foundation of my continuing professional development.

Now here are a couple very important points. You will benefit by making notes of these points. First: if you do not have a professional and personal development plan then you will have increasing difficulty, growing your business. The obvious answer is to have a professional and personal development plan based on you own strengths, weaknesses and interests. Second: while technology and global markets are advancing at lightning speed, the business and wealth building foundation principles are not changing, they are only being enhanced by different views.

The Profit System that I developed has business and profit building principles at its root. By the way, you can get most of this training absolutely FREE simply by subscribing to my six week course at www.stevepohlit.com The conference in Chicago reinforced this point as most of it centered on revenue building business principles that have been around for quite some time. So if they have been around for a long time, why is it that they still need to be taught? Well the facts are that these
principles are almost universally ignored.

What is the #1 foundation business building principle that we spent most of the 4 days in Chicago learning more about?

The Cow

Dan Kennedy told us that he has purchased a cow. Not just any cow but one that had long term value a measured by its ability to produce more cows and it has. So now one cow has produced more cows which are valuable and also produces embryos which are also valuable as they are implanted in other cows and the herd grows faster. The point is it starts with one and with the right action grows into a herd.

The Herd

This is the term used by Dan a lot in reference to the most valuable asset of just about every business. That asset of course is the customers of a business. Without exception, every successful business owner I have met or read about has achieved
success because they have developed a list of customers who trust them.

There are a number of ways to develop customers and in the next article I will cover the ones we spent of our time in Chicago discussing, why they work and what you can start doing now to make sure you are getting the highest return on you investment
in your marketing dollar.

P.S. If you are curious as to the reason behind the title to this article, I’ll tell you. Among the more than 12,000 members of Dan Kennedy and Bill Glazier’s Inner Circle, there is a small percentage of people who say to Bill “but my business is different.” The longer you read my articles and say to yourself “my business is different” the longer it will take for your business to realize its profit potential.

You know it the instant you see the person. It is apparent they have achieved an extraordinary measure of success and have the time to enjoy it. Steve Pohlit is an expert business consultant who developed The Profit System shows business owners how to achieve an extraordinary level of profit and the time to enjoy it. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box.

The Hidden Costs of Employee Turnover

Mike Ullman, the CEO of J.C. Penny since late 2004, estimates the company has saved over $400 million annually by implementing programs to reduce the turnover of valuable talent. Mike has further quantified this cost per employee leaving. Each one costs J.C. Penny about one third of that employee’s annual salary to replace.

If J.C. Penny only loses one third of the cost of an employee’s annual salary when they leave and need to be replaced, they are fortunate. I have seen huge costs associated with employee turnover including the cost of recruiting, training and relocation. There are also the less obvious costs of lost productivity, lost sales and a loss of control of assets.

J.C. Penny operates fairly large format stores supported by district and regional managers. In theory, if a person leaves there is a backup to cover the business while a replacement is found. The reality is that even in that situation productivity is compromised and customer service standards are at risk.

Consider a smaller format store with local or regional retail chain. Often the only backup is none or maybe the owner. I have seen many instances where a store cannot open because of inadequate staffing. When this happens too often, the customer base loses confidence and the profits decline to a point where a store may have to close. Look at the transportation industry where there continues to be an acute shortage of drivers. How many freight companies are losing revenue because they simply do not have enough drivers for their equipment?

In each of these examples, the cost of replacing an employee is far greater than 30% of the departing employee’s annual salary.

In one of the modules of my FREE course How To Increase Profits by 30% or More in 90 Days or Less, I cover key ways to minimize the turnover of valuable people. One is to make sure you do not retain and nurture mediocre performers. That is a major negative influence on talented staff. Another is to clearly define and communicate company performance goals in terms of how they relate to a person’s job and then answer the question “WIIFM” or What Is In It For Me?

Mike Ullman is right on point focusing on the company’s number 2 asset. Employees in retail and many other industries are key to developing a company’s number 1 asset which, of course, is it’s customers. If you know Mike, please compliment him on J.C. Penny’s vastly improved performance and please ask him to visit www.localretailmarketing.com which is a program that will definitely help him grow profits by customer.

A reminder: the FREE course including the module on human resource development is offered at www.stevepohlit.com I wrote the course and the human resource section based on my experience helping numerous clients across a number of key industries including retail, recruit and retain key people.

Steve Pohlit is a CPA has his MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.

Blogging Is An Essential Part of Business Development..Do It Right

Blogging is a communication tool that will help your business if you follow a couple basic guidelines.

The majority of blogs on the Internet are free services. The most popular one is Blogger by Google. I started blogging with a Blogger account and still have an active account. However, a number of blogs that I started were left alone for awhile and all of a sudden those blogs and content are gone. Fortunately, I have back-up on nearly everything I write, but the point is Google was in control and I was not.

Notice this blog: it sits on a distinct domain www.stevereports.com In this case I have chosen to use subject categories as a method of navigation. An alternative is to create separate blogs for each subject category. I have tried that and personally find it more difficult to manage over time. I recommend a distinct domain for your blog and a logical navigation based on the content you offering.

Every blog should have icons for the reader to add your blog to one of the popular RSS feeders. This will result in your blog entries being picked almost immediately by the news readers and people who want you content will receive it by way of their own news reader. There are a number of popular new readers including Yahoo, Pluck, Newsgator and more. As this is being written, the links for many of the popular news readers are being added to my blog.

In this article you will notice live links to a couple of my sites including www.stevereports.com and my main business consulting site www.stevepohlit.com You will also notice in my articles certain keywords being hyperlinked. Including these links is a very powerful feature of blogging since the RSS News Readers pick up your blog and the search engine spiders frequent blogs a lot especially when you are adding content regularly. This search engine news reader activity helps the flow of readers to your main web site and increases the back links to your sites which is an important search engine optimization tool.

You will find additional features being added to my blog over the next couple of weeks as I implement my blog development strategy. I developed a plan based on the objective I set out for the web sites I use to promote my consulting business. You should have a plan for your company’s blog that compliments your business development strategy. Of course you can develop a blog on a particular subject and use various techniques to monetize your blog. However, if monetization of content is your goal I continue to recommend a web site for that purpose and a blog designed to drive traffic to your web site.

It took some time to figure out some the features I wanted on my blog and I chose not to become a Word Press programming expert to achieve some of the goals of my blog. I have developed a team of people who can quickly set up a blog similar to this one. They can do it fast and economically. I recommend it and I am offering it because I had difficulty finding a one stop solution when I was starting. If you have an interest in this service, Email Me

Steve Pohlit, Business Consultant is the author of this article. This may be freely distributed intact and with this resource line.

The General Motors Financial Staff Skipped Accounting 101

Don’t Worry, The Multi-millions Spent On Accounting and Board of Director Leadership Are Undoubtedly Well Spent. I can’t wait for The New York Times Best Selling Book in the fiction category titled “How General Motors Did Not Know They Were Screwing Up Their Numbers” This began, according to the press, in 2000. What about a sequel: “Our Latest Late Filing With The SEC Where We Explain Nothing” . Maybe FOX will pick it up as a reality TV show Titled “The Accounting Apprentice”

But wait, surely there Is a mistake. After all, we now have Sarbanes Oxley. Our political leaders spent hundreds of millions of dollars to protect the investors in public companies with this legislation. Wait there’s more…remember there are the outside experts hired to make sure the Sarbanes Oxley Act is followed and the numbers are materially correct. Certainly there can be no mistake here because they have been paid millions upon millions.

Do you think there is an adequate explanation? Do you think this is an ordinary part of doing business? I think this is another disgrace to the process of accounting for business. It really is not that hard to account for business transactions, no matter how large the company.

Sarbanes-Oxley is now about three years old. The accounting and legal firms particularly since the passage of that law have been put on notice regarding their responsibility for “signing off” off on management’s responsibility for a sound system of internal controls. How did they come to their conclusions everything was fine?

The mistake in accounting for a certain company’s earnings which is owned by General Motors is symptomatic of a material weakness in internal accounting controls. This is a direct violation of accounting 101 and Sarbanes Oxley. This is further exacerbated by the disclosure of other accounting errors dating back to 2000 and the entire five year period from 2000 to 2005.

Accurate reporting the results of operations cannot be legislated. If one of the largest companies in the world can have a system in place that results in the material misstatement of results, then that is proof positive misstatements can and will happen anywhere. Let the buyer beware.

Steve Pohlit
Business Development Consulting
www.StevePohlit.com

PS. Do you think this mess stated in 2000? I am thinking it goes back a lot furher

Steve Pohlit is a CPA has his MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.

Cash Is King: If You Are Out of Cash, You Are Out of Business

Cash is the ultimate thermometer. The closer you get to $0.00, the more you sweat and the colder your business becomes. When you hit $0.00 for any length of time – you’re business is dead.

If your business is struggling, you are living the stressful impact of little or no liquidity. Even if you are in a more comfortable cash position, you never should take your eye of the cash position. It is the report card on how your business is doing.

Following well founded profit improvement business practices each day is difficult. It seems to go against the grain of most people’s nature. It is easy to “let the cash position analysis including the two month rolling cash flow position, forecast and financial flash slide today” and then before you realize it, a month has gone by, then more months.

One day you wake up and your business is in trouble. The successful companies follow a rationalized management system consistently. That is The Profit System. I work and coach you and your management team on the adoption of a management system for long term success. My six week course that you can receive for FREE gives you in-depth informaion and training on this process. Registration is easy – just visit The Profit System and registration is found on the main page.

You will find first module of The Profit System is the cash flow position, rolling two month forecast and financial flash. Start today with knowing your cash position. That means cash available to spend. Move onto this week’s cash receipts and disbursements forecast. Once you have that, take it out 8 weeks. What does it tell you? All of this detail and more is in the FREE Course.

All the best,
Steve Pohlit, Business Consultant
www.stevepohlit.com

Your Business Plan Could Be Worthless In A Second

Assuming You Have One, Your Business Plan Is Worthless Unless You Have Addressed This One Threat:

If you have an updated annual business plan and a management system in place to monitor the progress against that plan, you are in the top 10% of all companies operating today. Even if like most owners, the plan is largely in your head, what is your succession plan? More specifically, what person in your company is viewed as critical to your company’s viability? What happens if that person dies right now?

True Story:

In September 2004, on a bright sunny day in a fairly small southern town, a man who founded a business and grew it to more than $15 million in annual revenue was in his office following his normal routine. Then it happened. A sharp pain signaling a heart attack. 911 was called and in this town they actually answer the emergency line and the emergency squad was there shortly. He died within two hours.

He left the company to his wife. She is a very nice person, but she did not have the experience to manage a $15 million company with over 100 employees. Her life insurance proceeds were $1 million. During the next 10 months she infused most of that into the business. This included paying experts who told her they would help her make a lot of money. They wrote reports and made charts and graphs. One planned, while being paid to help her, on how he would take over the company.

She ended up selling what was left for almost no money and is ultimately left with very little. I worked with the buyer and about 50% of the original business was salvaged. All of the 35 people originally in the office are gone. The business has no resemblance to its former self. All of this could have been avoided with a sound contingency plan. The business developed by the founder was fairly sound and could have moved forward with the right leadership. The founder died suddenly at a relatively young age and most of his business died with him. His family who supported him during the business building years is left with nearly nothing.

Can this happen to you? Absolutely! Is this story uncommon? Absolutely not!! Two years ago I worked with another company assisting the surviving son in selling the business. His father had started and grew the business to more than $12 million in revenue. At the time I met the son, the business was doing about $6 million annually. The son had no interest in running the type of business his father started. In this instance the business was successfully sold.

Nearly every privately held company I have consulted with is at risk of being eliminated should the key person in the company no longer be able to work. They all agree a succession plan is needed. Have they done it? No!

In my last article, I addressed the issue of a contingency plan when the bird flu pandemic starts. This type of planning applies to a pandemic, terrorist attack or natural disaster and now I add the death of a key person to the list. Businesses generally ignore preparing contingency plans for these types of events. It is human nature to ignore the possibility of death, disease and destruction. If you are an owner, take action. This type of planning does not require a great deal of time, effort or money. However, this part of your business plan ultimately may be the most valuable. If you are a spouse of a business owner or an employee whose livelihood and retirement is dependent on the long term success of the company, you need to ask the questions:

  • What is our plan if you die today?
  • What is our plan when the bird flu pandemic starts spreading?
  • What is our plan if a terrorist attack disrupts major traffic lanes or destroys commerce centers where our customers do business?
  • Do we have adequate insurance coverage in the event of a catastrophe?
  • What exactly is the coverage and how long will the business survive should we need to use that insurance?
  • Do we have an effective backup and recovery process in place for our systems?
  • Are all passwords for our systems and pc’s documented and kept in a safe place? Are they changed and updated on a regular basis?
  • What do we do if our office burns down tonight?

Maybe you have additional questions to this list. You get the idea and yes a disaster can happen to you. You are now advised and you are accountable for getting this done. Your business, your family and employees are at risk without an effective plan in place. What are you going to do about it? When?

Be well and prosper,

Steve Pohlit

www.stevepohlit.com
Email Contact

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.

Discover Three Programs Convenience Stores Can Implement Right Now and Win The Market Wars With Specialty Product Stores Like Starbucks and New Format Stores.

The key to success is winning customer loyalty before your competition has a chance to change buying behavior. How do you do that? Every retailer reading this article already has the answers. This short report will review those answers and provide a roadmap for implementation.

Roadmap To Successfully Compete With Specialty Stores and New Competitors:

Standards

Nearly every retailer I have worked with has a basic set of store operating procedures. Rarely is there a consistent management system in place to confirm the standards are being followed. So step number one, make sure your operating standards reflect how you must operate to compete with your neighboring Starbucks, Home Depot Convenience Store or whoever is your biggest threat. (For more detail on having the right management system in place, register for the complimentary Roadmap Course)

Staff

First discard the traditional financial measurements of labor costs as a percentage of revenue. Those numbers are completely distorted by the real costs of not having trained and motivated staff. They are further distorted by the costs of high turnover and the impact of turnover on the costs training and costs of failing to follow the operating standards. The operating standards having the biggest impact on profits are those dealing with inventory control, sale transactions and customer service.

Interim Summary:Have the right operating standards first then hire, train and reward staff for following your plan on how to operate your businesss.

Have the right operating standards first then hire, train and reward staff for following your plan on how to operate your businesss. Your Hidden Asset

The balance sheet for every business includes items like cash, inventory, property, accounts payable and equity. Nowhere on any balance sheet that I have ever prepared or read is there a number for the most valuable asset of the business…your customer.If you have followed my articles, you already know I am fanatical about developing a customer data base and implementing an effective communication strategy with customers and visitors to your business. I have developed this view after working with possibly the most notable and successful consultant in the world – Jay Abraham. I have further imbedded this concept into my business soul by working with a number of the most successful Internet marketers and direct response marketers who universally state their only asset is their list.

There is an entire website devoted to this issue which is www.localretailmarketing.com So I will avoid the temptation to lecture here. However, before moving off this point, the following are important:

  • Have as one of your primary missions to develop your customer and visitor list beginning now. This next sentence will seem self serving because in some respects it is, but let me assure you that you will never regret outsourcing this program. Of course you should hire me to get it done for you because I know how and I can do it much more economically than you can. And one more thing: if you say you are going to get it done, you won’t and you will be leaving tons of money on the table.
  • Do not attempt to implement a communication strategy using email with your own servers.
  • Integrate membership programs, email autoresponders, email broadcast and eCommerce at the same time.
  • Have a website and blog as a foundation for your customer and visitor list development program.
  • Have multiple secure backup points for your list – your most valuable asset.

Practical Examples:

My business is based on the theme “no reports…just results”. So let’s look at a couple topical items based on what seems to be a hot topic in the trade journals.

First Example: Can a C-Store successfully compete With Starbucks?

Answer: yes

Second Example: Can an older C-Store successfully compete with a new format store like those being opened by Rally’s or Home Depot?

Answer: yes

In each case the answer is in your people, your offer and your management of your customer list. Attempting to win on price won’t work. In the Starbucks’ example, their target audiance is not that price sensitive. So you have to offer a competing or even better product (not hard to do) with a higher perceived value. How do you know what to do? You test your ideas. In the case of Home Depot or some of the other major players coming out with new and exciting formats, you cannot compete on price because they have deeper pockets. You have to be prepared to take a bit of a hit when a new store opens and then win back your traffic plus add new customers with your service level, your product offer and your customer communication strategy. The big players will have a tough time competing with your local retail marketing strategy. They won’t be as nimble as you can be.

Now if you are a national chain leader reading this then you need to be implementing local retail marketing because the facts are most of the local merchants will not take action on this and when you do you will take major market share.

Let the games begin and remember the game is always won in the details.

Steve Pohlit, Business Consultant
www.stevepohlit.com

PS. This article and a growing list of all articles developed by Steve Pohlit can be found at www.stevereports.com

Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue and profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.

 

Increase Restaurant Revenue With Controversial Ads: CKE Filmed Paris Hilton

Have you seen the Paris Hilton ad for Carl Jr’s Too Hot BBQ $6.00 burger? I have and I received it as a link in an email from my brother. Did I watch it? Yes and in addition to the very nice visuals I noticed there is a link for a screen saver, photos you can save, coupons for $1.00 off the burger (nice tracking device) and an easy to use link for forwarding the commercial to anyone you want. That commercial is already speeding around the Internet getting more exposure than if the networks ran it. Plus the fact it is being banned on commercial TV makes the ad that much hotter.

There are many lessons to take from this campaign and no you don’t need to produce something near pornographic.

Now look at the sales results of their advertising strategy: a 40% increase in sales and 25 consecutive quarters of same store sales increases.

Here are several excerpts from the news story:

CKE Restaurants, which has a reputation for politically incorrect advertising, tapped the sexy socialite for a new Carl’s Jr. TV spot. The problem, according to a source, is the spot is meeting with some resistance from network executives. “It couldn’t be more pornographic,” said the source. “It’s about as racy as I’ve seen.” …..

Set to the song “I Love Paris in the Springtime,” the 30-second spot, via Mendelsohn/Zien in Los Angeles, shows Hilton washing a car “with hoses shooting everywhere and her soaping everything up,” said the source. Touting the BBQ Six Dollar Burger, it plays off her catch phrase, “That’s hot.”

“We liken our advertising to more of what the beer brands do,” said Brad Haley, evp of marketing at Carl’s Jr. (which targets men 18-34) in an interview with Brandweek earlier this year. “There’s a lot of male attitude, personality and edge. Sometimes sex appeal enters into it on occasion. It’s something younger guys are interested in.”

The strategy appears to be working. The 959-unit chain rang up $1.4 billion in sales last year, up from $1 billion, per Technomic, Chicago. It also has reported 25 consecutive months of same-store sales increases.

Developing Effective Marketing Programs and Tracking Return on Investment Is A Key Part of The Retail Profit System (www.retailprofitsystem.com)

Aricle Comments and Compilation by Steve Pohlit www.stevepohlit.com This article may be republished in its entirety with the inclusion of all information to this point.

Section 404 of Sarbanes-Oxley Should Not Be Exempt For Smaller Companies

Section 404 of Sarbanes-Oxley Should Not Be Exempt For Smaller Companies

Section 404 should be expanded to include privately held companies with bank debt.

Section 4040 should be modified for smaller companies to delete the requirement for external auditors to attest to management’s report.

Background: What Is Section 404?
 From the SEC’s Final Report: “SUMMARY: As directed by Section 404 of the Sarbanes-Oxley Act of 2002, we are adopting rules requiring companies subject to the reporting requirements of the Securities Exchange Act of 1934, other than registered investment companies, to include in their annual reports a report of management on the company’s internal control over financial reporting. The internal control report must include: a statement of management’s responsibility for establishing and maintaining adequate internal control over financial reporting for the company; management’s assessment of the effectiveness of the company’s internal control over financial reporting as of the end of the company’s most recent fiscal year; a statement identifying the framework used by management to evaluate the effectiveness of the company’s internal control over financial reporting; and a statement that the registered public accounting firm that audited the company’s financial statements included in the annual report has issued an attestation report on management’s assessment of the company’s internal control over financial reporting….”

When I was studying internal controls first for the Certified Internal Auditors exam and then for the CPA exam (both certificates earned) I learned the fundamental principles of internal control. One of the key tenants of an effective system of internal controls is management’s (owner’s) attitude toward how business is to be conducted. I also learned that if two or more people colluded, most systems of internal control could be successfully violated.

Bob Greifield, president of Nasdaq, in an editorial published in the Wall Street Journal on Monday March 6, 2006, discussing the anguish continuing over the burden of complying with SOX. He states:” when it comes to SOX, …the burden of compliance is onerous, the cost is significant and it falls disproportionately on smaller companies that are least able to pay.”

Mr. Greifield does not advocate abandoning SOX but agrees their should be and exemption for smaller companies. I completely disagree with any movement to allow and exemption. The core reason for an escalating cost of SOX compliance is the interpretation of outside experts including accounting firms and lawyers as to what is required to support their attestation opinion. Now before the public accountants and lawyers conclude that I am saying the cost of SOX is their fault, I am not at all. The accountants and lawyers are responding appropriately in a best effort to avoid litigation. Remove their responsibilities for Section 404 and place sole responsibility for the report with management where it belongs.

SOX legislation is fundamental internal controls practice. It is unfortunate that our government had to implement this legislation. From a practical point of view it has no choice considering the corporate scandals and huge financial losses from those scandals. However I have maintained for years that SOX should be a contributor to increased profits and not increased costs. Few agree but that is OK. Now I go further and advocate the expansion of SOX to privately held companies with material third party debt. I advocate SOX be amended to remove the outside auditor’s and outside lawyer’s responsibility for attestation for companies below a certain size if they are public.

Steve Pohlit is a CPA has his MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.

Develop A Customer Data Base, Communicate With Them And Beat 85% of Your Competition!

Maybe you don’t want to work that hard, or maybe you have been burned by consultants or maybe you already have a measure of success. No matter what position you are in, if you Do This One Thing you will beat 85% of your competition. If you are in the 15% category already, please email me with a sentence or two confirming how well this works for you. 

What we are about to discuss applies to every business large or small and in every industry. Next, this is easy to do, but it does require some work. Finally, when you do this consistently, you will make more money than you ever imagined. This action is at the core of what makes people happy.

OK, here it is: every business has customers. if you are a professional service business, your customers may be called clients or patients. At the transaction level they are customers. They buy something from you. Some people cross the path of your business and don’t buy. Others you call on and some buy and some don’t. With each action there is a contact and when you have contact you have an opportunity to make a record of that customer or prospect’ s contact information. That record can be as simple as a first name and email address. It may be comprehensive including complete contact information, biographical sketch, business history and so on.

The one thing you must do if you are in business is obtain the contact information of people doing business with you and people who visit with you but have not yet purchased. You must then use this information and let them know you are thankful and you are sincerely interested in continuing the business relationship. Yes, this applies to every business.

One of the questions I consistently receive is the concern of contacting customers using email. Think of it this way, for most people they are going to business to buy something they want. They will welcome properly positioned messages from you. When you communicate with them regularly with messages containing valuable information and offers, they will continue to support your business and tell all their friends about you.

In assisting clients with implementing a customer development plan I have confirmed the importance of a couple very important points: First you must have a clear privacy policy, next you must use a registration process that confirms their interest in receiving information from you (opt-in) and finally they must be able to easily unsubscribe from your mailing list at anytime. I do not recommend telemarketing to your customers. However, an email alerting them to be listening for an important voice mail broadcast can work and should be tested. Email should not be relied upon exclusively. It should be part of a comprehensive marketing strategy.

I offer all potential clients a complimentary call for up to one hour and most prospective clients walk away with five or more ideas they can use right now to grow their business profits. I highly recommend you take advantage of this offer before time constraints make it impossible to continue.

Be well and prosper,

Steve Pohlit

www.stevepohlit.com  

 

P.S. For more information visit www.localretailmarketing.com

Steve Pohlit is a CPA has his MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com  All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.