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Being a retail consultant, there is a comment many business owners used. It is “I’m not giving away my inventory”. It is most common among store owners that business is in bad shape. It is too bad that most retail owners don’t understand about inventory. Inventory does two things. It eithers makes you money or costs you money.

You need to have sufficient inventory to be profitable. However, having too much inventory is a larger problem than too little inventory.

Too much inventory ties up critical cash for your business. It can also result in more damages to your merchandise. The key is to find the right price to move your merchandise. Slow moving items take up space and cash that could be used for more profitable items.

There are times you have to adjust your pricing strategy. For example, let’s assume your retail price is double your cost. In this example, you pay $10 and it retails for $20. If it is a slow mover or discontinued item, what should be the new price? I would take 20% off for 1-3 months, 50% off and then 75% off. If you have to sell at 75% off, you will sell below cost. Cost should never be a factored in marking down an item.

I can hear you yelling now. I’m not giving away my inventory. You are looking at your inventory from the wrong perspective. Your product is worth what a customer will pay for it.

Using my example, let’s say you sold your product at 75% off. How much did you make on that item?Your answer most likely was a loss of $5.This was based on a $10 cost and $5 retail. That answer is partially correct. The more correct answer is that you made $5.

You took an item that was producing zero and turned it into $5 cash. You can take that cash and space and use it for a profitable item. Many times a business does not have enough cash to buy the needed quantities of the best-selling products. If you take the cash from the poor sellers and use it for good sellers, you will more than make your money- back.

No matter how good a buyer you are, there will be items that don’t sell. The key is to realize this and react before it ties up too much cash and profit.

An added benefit of taking care of your problem inventory is increased sales. You will get customers who will shop your store regularly looking for your markdowns. Many of them will buy your high gross items also. If you take care of your problem inventory regularly, your markdowns dollars will be less.

Inventory is critical to your business success. The key is to take action on the slow moving and discontinued. This will make your bottom line better in the long run.

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I work for a large insurance firm in the northwest, in an office with over 500 other employees. Management recently decided to replace our existing phone system as the old system was no longer meeting our needs. I and my co-workers were under the impression that they were going to update the system, as in “make an improvement”, and that we would have late model phones with technological advancements galore. Boy, were we in for a surprise.

One day a few weeks ago, we all came in to find new phones on our desks. These were not the state-of-the-art communication devices we had in mind. Instead of the sleek, sophisticated, caller IDing, multi-line handling, LCD displaying wonders of the modern age we all dreamed of, there was a simple phone with a keypad on the receiver…not unlike what you might have had at home 15 years ago. In addition to the new phone, there was a sheet which explained in graphically painful detail exactly which series of buttons one would have to push in order to make this thing function properly. We had to now enter a digit to put someone on hold, enter a three digit code to transfer someone (one digit, dial tone, two digits) and enter a ridiculously long series of numbers to access our voicemail.

Needless to say, we were in shock. I knew it wouldn’t take long before the roars of complaining would drown out the usual office din. Sure enough, by lunchtime our office manager came in to tell everyone that we were simply going to “try it out for a while” and that the company had saved thousands by choosing this option. I and the other employees were fairly certain that we had already lost thousands in reduced productivity that morning alone. Oh, well…it’s their company, we just bring in the money for them.

For the next few days, we tried to get used to saying “hold, please, while I transfer you”, removing the receiver from our faces and trying not to curse as we made a lame-duck attempt at pressing keys, listening and pressing more keys. It was a nightmare. We were getting pretty fed up with it, but just assumed that this was what we would have to deal with. Then, out of the blue, we came in one day to find real phones with real features at our desks. No more looking at the receiver while we frantically tried to key in numbers fast enough not to drop the call. No more ten digit voicemail “pins”. No more of having no idea who was calling or where the call came from. Ahhhh, relief at last.

Later the same day, we heard a rumor circulating around the office that the VP of operations had returned from a two week trip to New York. His words, upon seeing one of the phones management had originally purchased on his desk were, “get rid of them”. All it took were those four words from a higher-up to set things right. Unbelievable.

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Product choice is one of the most important decisions that must be made when starting a food concession business. While many components of the concession business are important, choosing the type of food you will sell is the main component of your money-making potential. Choosing the wrong type of food can be detrimental to your business while choosing the right type of food can make you the talk of the neighborhood. There are several ways to choose food. First, choose a food you are experienced with. Second choose a food that is from your heritage. Third you can choose a food that is not in the area you plan to set up. Fourth you can choose a food to that is popular only if you can make the best of it. Finally, listen to your potential customers and what they want.

First and foremost, a great idea for trying to choose what foods you will sell in your concession business is to choose a food you are comfortable with cooking. If you don’t know how to cook lobster, unless you practice lots and learn how to make it very well, don’t choose to cook lobster. If you are a great burger cook, use that to your advantage. Experience is one of the most important traits you can draw upon in this business. If you have any type of food preparation experience and you choose to sell the type of food you are used to, you already have a leg up on the competition.

Secondly, a good idea to help inspire your food choice is to use your heritage. If you are Mexican, you may choose to sell Mexican foods. If you are Polish, you may choose to serve a fast-food form of Polish food. Using things that are in your background is similar to using food that you are experienced making. Many people who choose to let their heritage be a food guide feel more attached to what they are doing. You may feel like you are paying tribute to your history.

Another way to choose your food type is to choose something that is not currently in the area that you plan to set up in. For example, if the place you are going to set up is known as Hamburger Alley, you may want to pick chicken sandwiches for your signature item. Giving potential customers a choice between what is the norm and something unique is always a good way to get them to stop by. They may enjoy a taco now and then.
Do something that is going to make you stand out. This will help your potential customers remember you more easily.

Conversely, the very bold person can try another tactic. You may choose to do something that is very popular where you set up. However, if you choose to make hamburgers on Hamburger Alley, you MUST be the very best at it. If you can make a phenomenal burger, based on other people’s opinion, by the way, you can make a name for yourself as the best burger from burger alley. This is, I must warn you, much more difficult than figuring out something unique to sell.

A final idea about how to choose your menu is to listen to the people that are going to be your customers. Go to a neighborhood hang out or a local shopping district or business plaza near where you are planning to set up. Ask locals about what they think is needed in the neighborhood. Listening to your potential customers, you will start a relationship before you even open your restaurant.

No matter how you choose the type of food that you will sell, you must remember how truly important it is. Placing the utmost of care and consideration on this type of decision is very important. Above every other piece of advice on how to choose your food, be comfortable with what you choose. Going to work terrified everyday that you won’t turn things out right, or worse, not turning things out right is not the way to make a good impression.