How Every Serious Retailer Can And Should Maximize Their Offline Sales Funnel! Part Two
As you previously discovered in part one of this ongoing series,about maximizing profits no matter whether you have an on or offline sales funnel, it’s imperative that you consistently take whatever steps that are totally necessary to maximize your short and long term profits, don’t you agree?
And having a successful sales funnel in place, obviously is not just a major concern for online marketers,right? In part two of this series, let’s take a look at another long term small business marketing strategy, that will definitely help any serious (although) mildly to severely cash strapped small business owner and or service provider systematically increase their market share, for literally pennies on the dollar.
For sure you can grow your business, and increase your overall gross sales as much as you want , but (until) or unless the term profit accompanies that entire process, you’re really not going to be any better off.
And one of the best ways to ensure that happens, is by maximizing both the short and long term profits in your sales funnel. Now just in case you’re curious to know how that it is realistically possible, to in fact dramatically increase your overall daily, weekly or monthly gross sales revenue, but still not actually earn a nickel in real gross net profit? By all means, please do read on….
How Every Serious Retailer Can Actually Maximize Their Sales Funnel Revenue Without Going Broke In The Process!
Quickly picking up where the last paragraph left off. One of the most glaringly obvious offline industries, where you constantly see this potential deadly phenomenon playing out. That being a business that consistently grosses anywhere from $7,500 -$10,000 per week (based on an actual seven business day week), and still somehow miraculously, doesn’t earn a dime in real bankable gross profit.
Believe it or not cadets, it’s the restaurant business. Say what? Yep, that’s correct. No way you say. Stop and consider this rather brief overview. Let’s say they do some type of advertising/marketing promotion that gets 100 ( and let’s further say) they’re brand new first time customers to come in. And on average, they each spend $8 dollars apiece.
(Totally unrealistic, I know! But it’s just to keep the math really simple and to cut to the chase of this hypothetical example!) So 100 new first time customers, spend on average $8 dollars apiece. That means the restaurateur grossed at least $800 dollars for the night! So far anyway.Yippee!
Hold it, not so fast. Now let’s have a look of some of their steady (fixed) and variable ongoing costs of doing business. Things such as typical (nothing fancy) food & beverage cost and their weekly rent or lease payments.
Their labor cost. Insurance premiums, always variable gas & electric cost etc. Because your customers won’t eat cold food or sit in a restaurant that’s either too cold or too hot, right? Nope!
You’ve also gotta constantly be mindful of the weekly interest payments on your outstanding business loan and your ongoing other fixed cost such as your monthly workers compensation costs.And extremely variable health Insurance premiums.
Then there’s always your variable expenses for employee theft (aka) shrinkage and there’s other ongoing maintenance and or other unforeseen repairs, such as one of your main ovens suddenly going out! Oops!
Some Expenses You Can Trim Others You Can’t!
Typically, when you tally all this and other expenses up, you know what you’ll quickly discover? That on average, the restaurateur/entrepreneur (would be extremely) lucky if they ended up with a gross profit of just 3% or three dollars cleared out of every $100 dollars they grossed?
That’s right! This is called “real world 101” BTW! Hold it, because we’re not quite to the really bad part yet? Huh? So two of your waiters, rushing to get their orders out to that couple that’s has been more than patient!
Or may be it was one of your experienced dishwashers! But at any event, somehow during the course of the night, two of your $6 dollar wine glasses got broken and had to be thrown out! Whoops!
Which means entrepreneur, you’ll need to gross an additional $200 dollars for the entire night, just in order to get back to hopefully your previous gross profit of a measly $6 dollars off the last $200 dollars of gross profit! Say what? That’s correct!
So hopefully you’re beginning to see how and why in most cases, you’re far better off, either eating in or working in, but not personally investing in a restaurant!
Because more than likely, the inexperienced owner (in the long run) is going to probably fail! Now that the stage has been properly set! In part three, we’re finally ready to explore how any serious retailer can and should maximize their must have sales funnel. Are you ready
Please list at least two simple spin off concepts (in the comments section below) that you can apply to your business, product or service in the next 30 days or less!
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Hi Mark,
Great Post as always with lots to think about.
We get into business thinking it is only the initial cost that will get us started, but a little while into it, we discover all the variables one by one.
There are lots of costs that goes into a business but people just think about what they see at the front end which in your example it is the food and they don’t think about all what goes behind the scenes at the other end.
I am glad I saw and read this post as my husband was going to buy a restaurant and I guess now I should warn him to look into its details before going any further. lol
Thanks Mark for a great share as always. Enjoy the rest of your week.
Be Blessed,
Neamat
Neamat Tawadrous recently posted…Why Ask Questions? And Who Is The Most Important Person To Ask Questions??
Absolutely Neamat!!
It’s just like you said, it’s what’s just underneath the surface that
often drives new business owners out of business!LOL!
Because just like you pointed out, until we learn any different,
we often concentrate far too much on the (surface) front end of the business
expenses only!
And it’s that un-examined back end plethora of ongoing expenses that can and will do us in if we’re not
extremely prudent!
So glad you got value Neamat and always glad to have you share your incredibly valuable
insights as well!
As always thanks for your extremely words of encouragement and for your continuous support!
Both are greatly appreciated!
Hi Mark,
There are so many variables that go into any business off line or on line. I like the restaurant example you have given. When I talk to my clients I like to use the pizza store he he he.
It is so true, there are so many things to consider and people usually take for granted. They don’t take in mind all the cost that goes into this business. Their mind is focused on the food. But what about the other details? Creating an ambiance for one to enjoy..that is a pretty hefty price.
As a marketer, you can clearly “see” these things because you have developed a marketer’s mindset.
Now when we take our online businesses seriously, there are plenty of things that we need to purchase, just like an off line business.
I’ve been on both sides of the fence Mark, so I do “see” things all the time like that lol.
-Donna
Donna Merrill recently posted…Build Your Brand
Awesome Donna thanks!
Yea, I guess it really doesn’t start to hit home until
you have to write the checks!LOL!
Because like you so wisely pointed out, there is just so much that either gets overlooked
or neglected altogether!
And I imagine that having been successful (both) on and offline has really given you
a very keen and unique perspective!
Which is extremely helpful to both you & your customers/clients!
Thank you as always for sharing your unique perspective and
for your continuous support! I truly appreciate both!
A long time ago I used to make small pill boxes from exotic hardwoods and sell them at exhibitions and fairs. The wood was costly, but the amount needed per box was very small.
They sold because the wood was beautiful and enhanced the product. And that’s where the ‘magic’ of the appearance of quality works.
So for the restaurant – if its presentation and attention to detail were top notch – then they could charge more.
Small fixed and variable costs with a large margins is good.
As for offline promotion, I passed a restaurant today in the centre of Edinburgh. A man at the door almost put some desert into my mouth as I walked by 🙂
David recently posted…Photographing With A Purpose, Framing To Add Text Later
That’s great point and masterful insight David!
Far too many small business owners and or service providers rarely seizes the opportunity
to exploit the natural spread between fixed or fairly predictable variable costs
and increasing potential gross profit margins, by simply improving
their overall presentation!
And charging more because of it!
That’s a fabulous and far too often overlooked and untapped money
making opportunity!
Thanks so much for sharing it!
I had no idea the about all the variables working against a restaurant owner. I’ll think about that next time I’m complaining to myself about the price of a hamburger.
Zach recently posted…Abuse of Process and Frivolous Lawsuits Part III: Abuse of Process
Absolutely Zach!
It’s like anything else, once you actually take a look
at the real numbers, often an entirely new picture starts to emerge.
Don’t you agree?And your industry is certainly no exception to the rule either.
Money in and money out. If what comes in (over time) doesn’t eventually exceed what
goes out. Ultimately we both know how the story will end.
Thanks for stopping by and sharing your insights! I really appreciate it!