I recently moved to another neighbourhood. As excited as I was about the move, the daunting task of packing put a damper on my good spirits. In what only proved to elevate the mood kill, I realized something alarming. I have a serious candle problem.
After going from room to room collecting an armload or two of various wax balls, pillars and jars, I placed them on the coffee table next to a stack of packing paper and an empty box. Once I had all of my candles on the table, I counted them out slowly, slightly alarmed at the growing collection. Hmm, twenty candles, that’s not too bad, right? Then I realized I’d only gathered all the candles from the first floor.
We all have our little quirks when it comes to collections, be it candles, refrigerator magnets, or, in the case of my husband, tacky shot glasses. But what happens when our impulse or slightly obsessive purchases spill over into our business?
As a college student, I worked at the book store on campus. Our manager/buyer had a slight obsession with writing instruments, especially pens. We had a huge double-sided, multi level shelf that ran the length of the first section of the book store parallel to the checkouts, shaping the line for our customers during busy periods. One side of this shelf was filled to overflowing with highlighters, mechanical pencils, every other type of pencil you can imagine, as well as those plastic encased eraser sticks. The other side of the shelf? Yep, you guessed it. Pens. A wall of every kind of pen you could possibly think of.
Obviously, demand did not keep up with supply. Each week, staff would go through boxes of pens and highlighters, checking to see if the ink had run dry. I could spend an hour or more scribbling on scrap paper, tossing useless pens into a cardboard box. And as our manager continued to bring in new shipments, we would look for older to pens to discount, always at less than cost. The discounted products would be thrown haphazardly into bins at the front of the store, as close to the entrance as possible. Not only was this a huge waste of money in terms of dollars spent on merchandise and man hours, but also in terms of opportunity lost.
Imagine how much the book store could’ve earned if the shelf had been lined with a variety of merchandise that would contribute to the impulse purchase decisions while people were bored in line. And those same old bargain bins filled with the same old stuff every time a customer walked in? I always wondered why we wouldn’t place newer stock that would entice students to come in to the book store when they weren’t in the need for a new text book.
The manager of the book store was not bad at her job. Other areas were organized and profitable, and she ran a tight ship. She simply let her personal shopping preferences cloud her judgment in this particular instance. As entrepreneurs, we’re definitely not immune to allowing our personal habits spill into our business habits. But it’s important to recognize when it is happening and what the implications might be.
So this week, why not look for clues or signs that this might be happening to you: Is your office overloaded with company branded thumb tacks or other quirky merchandise that never seems to make it into the hands of your customers? Are your business cards made out of stainless steel even though metal has no connection to what you actually do? Do you only have one employee, perhaps a summer intern, who you welcome with a basket full of company branded merchandise? If so, it’s possible that you’re letting your love of style and/or your logo creep into your marketing budget.
And if your back room is filled with spiffy new binders even though your business is pretty much paperless or you spent your entire lighting budget on a chandelier, you may be letting your personal preferences get in the way of making money.
Once you’ve recognized a problem area, do the math. Add up how much have you spent in terms of dollars and man hours. Determine how you could have spent that money to help your business grow. Just don’t beat yourself up about it. You might not be able to recoup your cost but you’ve learned a valuable lesson and you’ve already figured out how to tighten up your budget. Congrats!
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Darcia Armstrong is a marketing communications professional with an entrepreneurial spirit. With over a decade’s worth of progressive experience managing marketing initiatives for startups and seasoned business owners, Darcia focuses on promoting the interests of small business. She loves serving small- and medium-sized enterprises in her role as Digital Marketing Manager for the Canadian Federation Independent Business (CFIB) and CFIB’s My Startup Program.
CFIB is a non-profit organization that supports, promotes and advocates on behalf of Canada’s entrepreneurial landscape. With over 109,000 members across Canada from every sector of the economy, CFIB offers access to powerful advocacy, sound business advice and assistance, and major savings and benefits.