Tower Blog

A blog about smart POS software for independent small businesses.

Category: Small business (page 9 of 13)

Deal or no deal for newsagents?

Is this a good deal or not? Access Pos, one of our competitors in the newsagent space, faxed newsagents yesterday with an offer which included the claim “MANY OF THESE PRICES ARE LESS THAN ONE THIRD OF OUR COMPETITORS.” It’s the same fax they sent early in October. Back then I emailed their Managing Director and advised (again) that the claim is untrue. Sure the hardware is cheap. However, you must buy their software. Once you do this and add some training and support, their price is higher than our price when compared to our most popular two package deals. They know this. I reminded them last month. Yet they again send out what is in my view, at best, a misleading statement. I have lodged a complaint with the ACCC.

Newsagents looking for a computer system ought to shop around and compare apples with apples. Choose the best system based on what it does for you. If you’re not sure, get two or three systems on the table next to each other and compare function by function. Check out the business reports and that they are designed to help you buiold a stronger business. Take your time. Then, compare price and not just price today but the price over, say, five years including support. Then, check out what free support services are available including user meetings, documentation and business help. Finally, get at least ten references and call every one of them. The more work you put into your decision the better the decision will be.

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New software for jewellers

Here is the front cover of our new brochure for jewellers. (Click on the image to download a copy of the full brochure.) We’re often asked if there is synergy between jewellers, our second biggest client base, and newsagents, our biggest. Our newsagency software is better for having jewellers making suggestions to us and vice versa. For example, jewellers are concerned about changes in stock movement patterns. We have built some reporting and alert tools to address this and they apply, unexpectedly, in a retail newsagency. Working with jewellers is one reason our newsagency software continues to deliver outside the field.

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Fast 3 Awards – rewarding small business

fast3.JPGWe have announced our 2006 Fast 3 Awards where our customers compete with themselves to be recognised as one of the three fastest growing users of our software. To enter they print a report which compared sales over a ten month period in 2006 with the same period in 2005. We measure on unit sales and the three with the most growth win.

The Fast 3 Awards get our users interacting with their software, underscores the importance of competing with yourself and rewards growth regardless of the size of the business.

Entrants are vying for prestige more than a financially rewarding prize as this is more about the process than anything else.

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Let them eat cake

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This cake shop, in the back streets of Vienna, is a perfect example of what local businesses do best. Their window is full of unique cakes – cakes one would not see in the window of an outlet from a chain of bake houses. In Vienna cakes tell local stories. Pastry cooks from different areas preserve their traditions in their recipes and designs. They compete to showcase their profession, working by hand to create works of art. It’s part of the charm of exploring the city, a charm I would like to see continue.

Back home in Victoria, thanks to tougher food regulations and the success of some chains we’re losing local cake shops. When they close we are left with supermarkets and chain outlets where the products are, often, less natural and certainly less local. While this will not necessarily shorten our lives, it takes away the delight of walking into the bake house to explore today’s delights.

I don’t see the sense in this kind of progress, replacing a local bake house with a chain store. However, I would not legislate to stop it. The answer, of course, is to eat cake, from an independent bake house, at every opportunity.

I am a fervent believer in small businesses. We uphold traditions. We employ locally. Our profits remain in the local area. We care more about our people and our community. We deliver better service.

A profitable small business profits many people. A profitable global giant, by comparison, profits few.

So, I eat cake and toast small business.

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Small businesses keeping local traditions alive

blog_kaffe.JPGThis is how coffee is served in Vienna coffee houses. It’s a tradition the independent businesses uphold. Small businesses are good like that, upholding traditions. Sure a coffee in a take-away cup is hand if you are on the go but sometimes sitting and taking time to reflect over a coffee can be more useful than forever being on the move.

While I was sitting at café Mozart looking at my second coffee the tradition of their service led my mind to wander about the difference between this experience and that of a less traditional coffee house like Starbucks, or Cafe Nero in London or Hudson’s back in Melbourne. While those corporate coffee houses clearly provide a worthwhile service – you only have to see how busy they are – it’s more about the community aspect, providing a comfortable place for conversation and identifying with the aspirations represented by the brands.

Café Mozart, Café Schwarzenberg and the many other similar cafes here in Vienna seem to me to be more about respecting their heritage of good coffee, good food (cakes) and good service. They have not, from what I can see, moved with the times. They don’t need to. They are proud keepers of tradition.

Many small businesses are equally proud keepers of tradition, in the face of competitor, media and peer pressure to move with the times and adopt the next big thing in their channel. We need to find ways to make it cool to preserve traditions, good traditions of course. We need to understand and uphold that change is not always necessary. We need to show our small businesses as being important for keeping our part of the world like we like it.

I’d hate to come back to Vienna and find fewer places serving coffee in this way. It’s part of the charm of the city for me. If the global brands win more business and close more independent coffee shops down then I’d have less of a reason to travel here. That may sound extreme but local experiences, like coffee served this way, is one reason I enjoy travel.

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Global giant Starbucks unwittingly helps a small retailer in Vienna

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I was shocked, when I rounded the corner just outside the Hofburg Palace in Vienna today, to find a Starbucks store next to Halder, the place I had come to visit. Halder is quintessentially Vienna, offering fine crafted products backed by perfect Viennese service. The quiet back-street has been disrupted by the coffee giant. Starbucks is the star and Halder the chorus. In this city of excellent coffee I could see no value in a Starbucks presence let along here next to the Halder store. I walked past the Starbucks and muttered something critical of globalisation.

The owner of the Halder store soon set me straight. I asked her what she thought about Starbucks, expecting some venting. She almost whispered how happy she was they were there. Even though they have only been open in this location for four months, business was up. Starbucks was proving to be an oasis for weary tourists – Vienna is a city where you walk most of the day to get around the key spots – and enough stopped in the Halder store to make Starbucks a welcome neighbor.

While business was steady before Starbucks, it was not showing great growth. Since Starbucks there has been good growth. New customers are finding Halder and as my own experience illustrates (three trips to Vienna and three trips to Halder) it’s a store you go back to. Their range is unique.

So, what does this mean for my views on globalisation? I cannot begrudge the owners of Halder the growth they have thanks to Starbucks. I also acknowledge that the coffee giant has created a store with some effort to fit in. Those points made, I have serious problems with globalisation: the bigger companies get, the more smaller competitors close; the more local customs are lost; the more service is a KPI and not something from within; and, the more a shrinking few control a growing bucket of global wealth.

It’s not all bad, as I found out in Vienna today.

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Globalisation has London in its paw

starbucks.JPGMy take-away from the last two days in London is that globalisation has London in its paw. Major high street real-estate is controlled by global brands. Even side streets are populated with global brands. Local, quintessentially English businesses, are fading fast. From the coffee chains to fast food to fashion, London is less London today than it was a year ago and less then than a year before that. Soon, we won’t need to travel because the local experience we used to travel for will be gone and everything else, if one can make money from it, will be on tour.

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CRM misstep

It took two weeks for us to find that the Sugar CRM solution was not appropriate to our needs. Once we discovered that our customisation would be lost with each new version of the software they load we knew Sugar was not for us. As it’s a hosted application we do not have the same control as locally run software. So, we have signed up for 30 days with SAGE. So far so good. Like most software companies, implementing internal systems has been a challenge for us. We’re approaching the CRM project differently – trying hard to treat ourselves as we would clients. If only it were that easy.

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A small business victory in the making

It’s been six months since I last blogged about how Woolworths was an unwelcome intruder in Maleny so it was good to catch up with the story on last night’s A Current Affair. Their Are Supermarkets Ripping You Off? story showed what a local community and a good local business can do to an unwelcome giant. Hopefully others will learn from the Maleny freedom fighters.

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Dumb and dumber

Some days our help desk team face extraordinarily frustrating situations. Take today. A user called with a problem. The old computer had fritzed. Since our update CDs have a full copy of the software, getting running on another computer is easy. The problem was the data. The user’s comments were “yeah, I was going to get around to that”. It’s in our printed monthly newsletter, our weekly email newsletter and covered in all of our user meetings. It took us a few hours to grab data from here and there and get him running again. We did it for free because we knew he would arc up if we talked about it being billable. In the meantime it took one of our team offline while we helped the dumb user.

We don’t know what to do to sort the minority of users out who ignore the need to backup. Nothing works including publicly shaming them. In the meantime they soak up resources which should be used for more responsible users.

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The CRM decision, finally

blogsugar.JPGWe have selected Sugar as our CRM solution. This decision has taken a year to make. Being slow about making the decision has afforded us an opportunity to see various solutions evolve. Sugar won because of the flexibility demonstrated to us and success stories in similar businesses. Now comes the fun part – implementation.

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Is the twenty something generation lost?

My retail business has been trying to fill two positions for six weeks. We have received more than 200 applications. After culling these to a shortlist of ten, six didn’t turn up for the interview or called the day of the interview with a lame excuse (my thumb hurts, I have to take my flat mate to the doctor etc) and three to whom we offered a position declined days later with a lame excuse (I forgot I have a family holiday or I forgot I have to fly to New Zealand to give evidence in a criminal trial).

We almost got to the point of saying that if they turn up for the interview and then for the first day of work we’ll give them whatever they want. Not really.

In retail with the pay good, $20 an hour for casual adult team members, prospective employees have options – especially good employees. It’s a sellers market and this is reflected in the excuses we get. Thankfully we have found someone but the experience made us realise that we have to do more to sell any vacancy in our retail business. The solution is a combination of money, flexibility and career options. Now, all we need is some candidates who actually turn up for an interview.

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Time for an investment allowance

It seems every day we read about the Federal Government slinging money at car makers, farmers, miners and other channels. Independent retailers are doing it tough and could benefit from an investment allowance – providing a tax break to help them fund capital investment in their business. The funding could be for shop fits, IT, equipment or maybe business coaching. The Fraser government provided a 40$ and then 20% investment allowance and this sure got businesses spending on their businesses. I’d like to see it again – not only because my company would benefit but also because I see many businesses in need of such investment and struggling because of all the other taxes and charged in their operation. This could be a short term way the government puts something back.

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Rules eliminate customer service

A friend was telling me about his Ikea shopping experience. He put his purchases on the conveyor belt but left three of the items with the barcode facing down. The sales clerk, rather than turning the items the right way up, reversed the conveyor belt and told my friend to turn them the right way up. The sales clerk would probably have been admonished for intervening and providing service beyond the impersonal everyone is a number Ikea experience.

This is why we need independent retailers. We need businesses where customer mistakes are corrected, where it does not matter which way you present an item at the counter it can be sold, where you get a smile and where you are a named person and not a number or a grunt. Shopping at places like Ikea drains the life out of you.

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When people move on…

One of the great things about small business is the opportunities they provide for people to cut their teeth in business – the first job or, in our case, the first job in IT. It is an important role companies the size of mine play, providing a place for people to navigate into their career and professional life. Some people move on and others stay. The balance usually occurs naturally. Occasionally it is sad to see someone leave before their time. Only rarely is it the other way, that they overstay.

Last night, past and present members of our team gathered to farewell someone who’s time with the company came to an end two weeks ago. While I could not make the drinks, it is surprising and pleasing to hear of former employees making the journey to ‘our pub’ for the farewell event. It makes you think that the friendships made on the job do count for something. Or, maybe, they come back for these events to see what’s changed.

It was at one of these events a few years back that a former employee pitched their case to re-join us – nothing wrong with that if they have the right skills for the position.

What is difficult in all this is the need to remain somewhat detached as the employer. It’s is a fine line as to how close you get. One the one hand friendship is to be embraced and on the other the ability to retain respect for difficult decisions means you have to pushback on the opportunity. Then there is the demand of work which keeps you away from things you’d like to do.

All of this is on my mind tonight because of a text message I received from the person being farewelled last night. He was angry I didn’t make it to his farewell drinks. While I called, it was not good enough. No excuse was acceptable – a view he is entitled to. His text ended with “Last time I speak to you.” It’s a wound I hope time heals.

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MYOB link ready to go

We’re about to release our third version of a link to the MYOB business acocunting software. We threw out the first several years ago as it was mediocre. We threw out our second just on a year ago because MYOB changed their softwasre link standards just as we completed the work (that’s another story). This link, our best, uses clever third party software as a kind of marriage brker is great. It allows us to deliver a seamless Point of Sale, back office and accounting solution all in the one package from a user perspective. The benefit to us of using a third party company is that we do not have to work with MYOB the company and that’s a heap of frustration taken from us.

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Shonky software sales tactics

We have been in a competitive situation against a company recently which reminded me of the 1980s. Their package deal price for the prospect started at $27,000. A day later it was $22,000. Two days later they found a $5,000 bonus discount to offer and their latest offer is $12,000 plus three days of extra time worth $1,500. While companies can and will discount as they see fit, such deep discounting makes a mockery of having a price list and a stated policy of not discounting. It helps them in that from our point of view we never know how they will price a deal. It also weakens them in that as word gets around people will know that you can screw them on price and in small business channels word does get around.

Our view on price is that it has to be fair for both sides since deep discounting hurts too much – if not today then in a year or two. The type of discounting from our competitor demonstrates a fear which will not help them build their business.

We won the sale. We also won by holding firm on price and focusing on the value proposition. Plus we won by seeing desperation in the eyes of a competitor.

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Woolworths in the coffee game

My local BWS (Beer Wine Spirits) bottle shop is now open early in the morning serving commuters coffee through their drive thru. I noticed because of the traffic impact of the line waiting to purchase lattes, cappucinos and espressos. In the right location and a half decent coffee this will help Woolworths suck revenue from the independent coffee outlets.

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Beware of support fees

One of our competitors list a client yesterday because their free software upgrade offer of a year ago did not disclose that the new version of software was free because they now charged an annual licence fee. Their former client switched to us because of the unexpected and high annual licence fee they were hit with. For a small business turning over under $600,000 a year a $3,000 licence/support fee is too high. Switching to us they can pay for a while new system and be ahead in three years. Their annual support fee is just on $1,000.

Given the nature of support and other annual fees I would like to see the software companies forced to disclose life of system ownership costs.

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We need to compete with ourselves

Independent and small retailers often complain about their big business competitors and the barrier they present to expansion when, in fact, the biggest barrier can be found within. This is why I recommend that small businesses spend more time competing with themselves. In my own retail business I have a single report I focus on most of the time. It is a following year to date and month to date comparison by department and category this year against the last. I compare unit sales and revenue. This one report drives most business decisions. So, instead of spending too much time worrying about the national chain store down the road is doing, I am competing, this year, with what I did last year.

Our Point of Sale software provides more than 70 reports but it is this one report which guides the business. It’s easy to follow, like any good report, and quick to get a grasp of.

The report lets me look at my business as a prospective purchaser would – purely based on numbers. Is there growth, if so, how to achieve more. Is there a fall away, if so, where and why.

Running a retail business is pretty straightforward if you have access to up to date accurate data and that is what this report provides.

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Can business software be sexy or erotic?

We sell software to hair salons. It’s a good marketplace for us. We enjoy working with salon owners and their people. They know about good customer service – they have to it’s such a personal business. We have been talking with some of our hair salon clients and they think we need to use sex to sell our software. What we have today is a great computer program for hair salons but it looks like a computer program. They want it sexed up so it looks like a fashion item. This, we are told, will make the computer system more useful. We have accepted the challenge and are off to the cosmetic surgeon to turn our software into something beautiful and, maybe, even erotic. Erotic hair salon software … now that’s an idea.

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Loyalty software

We try and educate our small business customers that a good loyalty program is much more than giving fake discounts off petrol or points which are hard to access. A good loyalty program is one which delivers genuine value to the consumer and which rewards the business with a measurable increase in sales. Smart small business operators, particularly those in regular traffic businesses like newsagents, chemists, card shops, gift shops and supermarkets can build a program which stays wholly within the business.

In our own retail shop, where we experiment with everything we put into our point of sale software, we run a loyalty program which resets every eight weeks. Customers get the card and have eight weeks to achieve the goal and the prize. I’d venture to say that this program is among the most successful loyalty programs in Australia.

Our software is built around similar principles – providing users the ability to drive sales in the store rather than pushing them outside to get some cents off inflated petrol prices. We use points and other rewards to help business owners to reward customers. So prefer to send a cheque – we can handle that too.

Like anything, a good loyalty program takes work. Good software is the first step. The business benefits from tight management and active promotion in all interactions with the customers.

Smart small businesses can compare their offering to Coles’ FlyBys and those from other big businesses and clearly demonstrate to customers that small is not only beautiful – it is also more valuable.

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Replacing generic POS software

We are finding that we take on considerable baggage when we replace a generic (non industry specific) POS system with ours in the newsagency, bike retailer, hair salon or jeweller market. We specialise in these four markets and know that a generic system is unlikely to suit long term yet local computer shops (especially) grab any sale they can without understanding industry specific needs. A year or two down the track, after losing too much time trying to bend the software to industry specific needs, the small business gives up. The challenge for us is to get them to believe that as a specialist software company in their market we understand their needs, that they can trust us. Often they think that all software companies are as bad as their last experience. Had they come to us or one our expert competitors first it is less likely there would be baggage. Instead, we are effectively on trial as they expect our software to fail just as the generic POS package did. While it will never happen, I wish that those selling generic POS software could be made to pay for their bad advice.

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Is the customer always right

We use email for customer newsletters and other important communication. It’s cost effective, efficient and green. While we occasionally send a snail mail newsletter, this is rare. This week one client complained that he was not aware he had to do a certain thing because he had not received an email. He uses email for personal matters but not business. Business communication should be in writing he said. I was taken aback. He demanded that we post him copies of all emails we send. When I reminded him that we had not increased our support fees in four years and that to do this we would need to revisit this he was not happy.

One way we have been able to maintain our software support fees at 2002 cost to our clients is by use of email and our website as a key means of communication. By establishing these operational rules we have been able to maintain good service levels without increasing our operational costs.

When he asked in the customer is always right I said than in this instance no – especially if the customer enjoys not being hit with annual cost increases.

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Yipee, we finally found the ideal candidate

The search for another person to join our Sydney office in an IT training and support role is over. The position has been accepted and our latest employee starts in a few weeks. This has been a very tough position to fill in part because we have been very specific in what we have looked for and in part because of the flood of wannabee candidates being pumped out of our universities. We ended uop interviewing 15 candidates and it was only on the last day when we found our person, or they found us.

Of the 100+ candidates who applied, more than half did not read the ad and did not follow application guidelines and were discarded. We asked for a personal cover letter more than a slick resume. More than half provided the résumé only. There was no sense that they had researched my company and what we were interested in. Their inability to follow a simple request i the ad meant we had to knock them out. Most of these candidates were recent IT graduates who have spent three years getting a degree in basic IT skills and looking for a company to teach them what they really need to know.

I appreciate that sounds harsh. The reality is that only a few IT degrees in this country prepare people for practical IT work right away.

Anyway, the search is over for now and we’re looking forward to having additional resources – we need then in NSW as sales are very strong. We’ll repeat this process next month with another candidate search in our next growth hot spot.

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