I didn't make the best The UPS Store owner from the start. No one had ever told me, and it never dawned on me in the first year, that I should go through my weekly UPS invoice to review the adjustments and other fees that seem to pop up.
If the charges weren't valid, a simple phone call (or click of the mouse) and the expense would be taken back off the invoice, no problem.
Around this same time, it also dawned on me that if the packages arrived late, I was entitled to a Guaranteed Service Refund from UPS. I asked my day manager to track each of the packages that had been shipped in the prior week to see if any had arrived late. She found very few and it took her more than half a day as she was constantly interrupted by having to work the counter. To this day, I'm sure many potential GSR's slipped through the cracks simply because the work was so tedious and she was multi-tasking.
A few years later another store owner steered me toward a software company that had a software application that allowed me to upload the previous week's shipping information and it would automatically track all the packages and find the packages that were eligible for GSRs. It worked OK and it didn't take too long to run. Maybe 10 minutes a week.
Call me old school, but something rubbed me wrong about the company from the start. Their approach to selling the software was "let me run a few of your past invoices to see what you would have saved." Nothing wrong with a free run at the software I thought.
They ran my invoices and found some substantial savings. The cost for the software? $500 per year. Based on my shipping volume and refunds it found, it paid for itself but not dramatically so. More on that in a minute.
About a year later, I turned the day to day management of the store over to a manager and took an executive position at another company. This company happens to be a very large franchisee in a different industry altogether, but with similar economics.
It so happens that my new employer spent nearly three times as much on their weekly shipping invoice as I did. All for their own account! (Yes, I had dreams of somehow figuring out how to run my employer's business through my account or hell, even just grabbing the drop-off business!)
And as a good employee, I had an idea on how to save the company money. Surely they have packages that are eligible for GSRs. I happen to know a software package they can buy. I dutifully gave them the saleman's name and had them call. I already told them the price would probably be around $500/year.
A week later, I had a chance to speak to the mailroom associate. Same story as mine. He got a few past invoices, showed them their savings, and then shot them a price based on the shipping volume he saw. Same software, same everything, but a dramatically different price. Unfortunately for the salesman, he didn't know this prospective customer had been referred by me and knew the price I was paying.
When my annual renewal fee came due, I declined to renew my software. But now I was out software to check for GSRs.
The solution? I decided to work with a development team and create my own software for finding GSRs.
It's taken two years of work with web site designers and programmers, but I was finally able to get the application where I wanted it and am proud to say we use it weekly to shave money off our shipping bill. (Yes two years. Software development from the ground up is similar to remodeling a house. "While we have this torn out, why don't we go ahead and just add another room to the house.")
=> Shameless Plug Alert
After realizing I couldn't be the only UPS Store owner with this issue, I had the application re-designed so that other store owners could use it to find GSRs for their own account. I took out the crap I hated, like pricing based on how much money it could save you, the big up-front fee, and having to download software to my computer, and reconfigured it to be a simple, easy to use online application. You can try it for free for two weeks at Haystacksonline.com
Thursday, June 9, 2011
Monday, May 23, 2011
Nordstroms
For years, Nordstrom’s Employee Handbook was a single 5×8” gray card containing these 75 words:
" Welcome to Nordstrom
We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them.During this time, Nordstrom had the highest sales per square foot performance in the retail industry – by almost double. (credit to 37Signals.com)
Nordstrom Rules: Rule #1: Use best judgment in all situations. There will be no additional rules.
Please feel free to ask your department manager, store manager, or division general manager any question at any time."
Friday, May 20, 2011
Tony DeSio - Founder of Mail Boxes Etc.
(FORTUNE Magazine) – Tony DeSio didn't set out to build the biggest nonfood franchise ever. As with many entrepreneurial ventures, it just sort of happened that way. Turn back the clock to 1980. DeSio, then 50 years old, was newly retired from 20 years in the aerospace industry, and his main priority was to hone his golf swing. Sure, he had always wanted to start his own business, but he had no ideas, and life at the 19th hole was much too comfortable.
FORTUNE talked with DeSio about what every small-business owner can learn from MBE, about squabbles with his former company, and about the prospects for his new franchise business. Here are some edited excerpts:
I'll never forget the day when....
I'm interested in hearing your stories about memorable events that have happened in your store. E-mail your stories to me (michaelhjoel@gmail.com) and let me post or just write it in the comments below. Let me get it started.
I'll never forget the day when...I was covering a day shift for an employee of the store when two Federal agents came in to speak with me. The agents, a man and a woman both in their early 30's, were wearing sidearms and had a look of business about them that indicated they weren't customers.
They explained that one of our mailbox customers was suspected of passport fraud and they were there in an attempt to arrest him. I didn't know this particular mailbox customer as I hadn't opened the box for him and had never met him. Nevertheless, they asked me to call him and let him know he had a package arrive at the store for him. After I made the call, it was just a game of waiting.
The agents decided to sit out in the parking lot in their car awaiting their man. That must have been one long day for them because he didn't show all day. Can you imagine anything more boring? At the end of the day, they came in to let me know they planned on coming back the next day and do it all over again.
The next day, around mid-morning, a scraggly looking customer walked through my front door with a smile on his face. He looked up at me as if I was a long lost friend and was making his way toward the mailboxes. Without missing a beat, he said, "I think I have a package here."
Now, I couldn't be sure this was the guy. I had never met him. But I was facing the parking lot and could see the two agents making their way to the store very quickly. There was no doubt they thought this was their man.
Before he made his way clear to the mailboxes, the agents stormed into the store, guns drawn!
"John Smith! Hands Up! Federal Officers! On your knees! On your knees!"
It sure didn't feel like it looks in the movies. They were using their loud voices. You know; the voices they must learn in the academy that just scares the living bejeesus out of anyone not ready for it. And it didn't dawn on me they would have their guns drawn, advancing on him.
One thing I immediately did was move to the opposite side of the store. I sure has hell didn't want to get caught by a stray bullet.
In hindsight, the thing I found funny was that the female officer was all of 5'2" and maybe 130 pounds. Pretty cute if I'm completely honest. But in that moment, with her loud girl voice and gun drawn, I think I would rather have wrestled a grizzly.
Once they cuffed him and processed him in the parking lot, I never heard from the agents or Mailbox customer again.
Not just another day at the office.
I'll never forget the day when...I was covering a day shift for an employee of the store when two Federal agents came in to speak with me. The agents, a man and a woman both in their early 30's, were wearing sidearms and had a look of business about them that indicated they weren't customers.
They explained that one of our mailbox customers was suspected of passport fraud and they were there in an attempt to arrest him. I didn't know this particular mailbox customer as I hadn't opened the box for him and had never met him. Nevertheless, they asked me to call him and let him know he had a package arrive at the store for him. After I made the call, it was just a game of waiting.
The agents decided to sit out in the parking lot in their car awaiting their man. That must have been one long day for them because he didn't show all day. Can you imagine anything more boring? At the end of the day, they came in to let me know they planned on coming back the next day and do it all over again.
The next day, around mid-morning, a scraggly looking customer walked through my front door with a smile on his face. He looked up at me as if I was a long lost friend and was making his way toward the mailboxes. Without missing a beat, he said, "I think I have a package here."
Now, I couldn't be sure this was the guy. I had never met him. But I was facing the parking lot and could see the two agents making their way to the store very quickly. There was no doubt they thought this was their man.
Before he made his way clear to the mailboxes, the agents stormed into the store, guns drawn!
"John Smith! Hands Up! Federal Officers! On your knees! On your knees!"
It sure didn't feel like it looks in the movies. They were using their loud voices. You know; the voices they must learn in the academy that just scares the living bejeesus out of anyone not ready for it. And it didn't dawn on me they would have their guns drawn, advancing on him.
One thing I immediately did was move to the opposite side of the store. I sure has hell didn't want to get caught by a stray bullet.
In hindsight, the thing I found funny was that the female officer was all of 5'2" and maybe 130 pounds. Pretty cute if I'm completely honest. But in that moment, with her loud girl voice and gun drawn, I think I would rather have wrestled a grizzly.
Once they cuffed him and processed him in the parking lot, I never heard from the agents or Mailbox customer again.
Not just another day at the office.
Thursday, May 19, 2011
(Reuters) - The U.S. Postal Service is in such bad financial condition that it may not be able to make a payment for future retiree health benefits due September 30, Postmaster General Patrick Donahoe said on Tuesday.
The U.S. agency has lost business to electronic mail and to private sector competitors like FedEx (FDX.N) and United Parcel Service (UPS.N).
http://www.reuters.com/article/2011/05/18/uk-usa-postal-idUSLNE74H00T20110518
The U.S. agency has lost business to electronic mail and to private sector competitors like FedEx (FDX.N) and United Parcel Service (UPS.N).
http://www.reuters.com/article/2011/05/18/uk-usa-postal-idUSLNE74H00T20110518
" They are not new lessons. Never owe any money you can’t pay tomorrow morning. Never let the markets dictate your actions. Always be in a position to play your own game. Never take on more risks than you can handle…Good businesses, good management, plenty of liquidity, always having a loaded gun; if you play by those principles you will do fine no matter what happens. And you don’t ever know what’s going to happen…
I mean, when times are good, it is kind of like Cinderella at the ball. She knew at midnight that everything was going to turn into pumpkins and mice, but it was just so much damn fun, dancing there, the guys looked better and the drinks got more frequent and there were no clocks on the wall.
And that’s what happened with capitalism. We have a lot of fun as the bubble blows up, and we all think we are going to get out five minutes before midnight, but there are no clocks on the wall. "
—
Warren Buffett’s answer to “What are the key lessons you took from the financial crisis?”
3 Steps to Better Managing Cash Flow
A friend of mine, who is a construction contractor, was able to share an interesting story with me recently. In his marriage, he and his wife keep completely separate checking accounts. They are each responsible for part of the household expenses, but money rarely flows between the two checking accounts. Right or wrong, this is how they've done it for years.
One day, my friend comes home to find his wife had "accidentally" opened up his bank statement showing a large amount of cash in his savings. She was irate. She was scraping by and having to use her credit cards when there was more month left than money.
The reason for the large savings balance, though, was that he was a contractor and small business owner. He had employees. He had equipment to buy. He had invoices from the lumber yard that needed paid. In short, this was his working capital for the business and it wasn't money he could just go spend.
I've been fortunate enough to work in other businesses that are substantial in size and see first hand how they manage their cash flows. What I've learned:
1. Working Capital is a must for our business. Or as I explained it to my contractor friend, Grease Money. Having some money in the checking account greases the wheels of the business. When sales are slow for 2 or 3 days in a row and then Royalties and the weekly UPS Invoice get pulled on the same day, it can cause temporary cash flow issues in the business. I would think at minimum, one weeks worth of sales in the checking account at all times would be needed. Another large franchisee I worked with maintained, between cash and an open line of credit, 4 weeks worth of sales.
2. Managing your house accounts. When I first opened for business, I tried to open as many house accounts as I could, thinking that with open lines of credit at my store, we'd be the first stop instead of the post office or another shipping location. In many cases, that worked. In many other cases, the customer took up to 60 days to pay me while I had to pay the shipping invoice from his packages almost immediately. Good for reported sales, horrible for cash flow. I've since had to cancel some of those late paying accounts and limit the opening of new accounts to established businesses.
3. Forecasting sales. Stores that are three years or past have a decent historical record of their sales. Our Admin System tools allow us to download those sales and/or slice and dice the information extremely well. I've started forecasting sales using a spreadsheet that allows me to predict and then compare sales from the same month last year. You can download it here. It may need tweaked a little bit depending on your particular profit centers, but it's proven very useful.
A friend of mine, who is a construction contractor, was able to share an interesting story with me recently. In his marriage, he and his wife keep completely separate checking accounts. They are each responsible for part of the household expenses, but money rarely flows between the two checking accounts. Right or wrong, this is how they've done it for years.
One day, my friend comes home to find his wife had "accidentally" opened up his bank statement showing a large amount of cash in his savings. She was irate. She was scraping by and having to use her credit cards when there was more month left than money.
The reason for the large savings balance, though, was that he was a contractor and small business owner. He had employees. He had equipment to buy. He had invoices from the lumber yard that needed paid. In short, this was his working capital for the business and it wasn't money he could just go spend.
I've been fortunate enough to work in other businesses that are substantial in size and see first hand how they manage their cash flows. What I've learned:
1. Working Capital is a must for our business. Or as I explained it to my contractor friend, Grease Money. Having some money in the checking account greases the wheels of the business. When sales are slow for 2 or 3 days in a row and then Royalties and the weekly UPS Invoice get pulled on the same day, it can cause temporary cash flow issues in the business. I would think at minimum, one weeks worth of sales in the checking account at all times would be needed. Another large franchisee I worked with maintained, between cash and an open line of credit, 4 weeks worth of sales.
2. Managing your house accounts. When I first opened for business, I tried to open as many house accounts as I could, thinking that with open lines of credit at my store, we'd be the first stop instead of the post office or another shipping location. In many cases, that worked. In many other cases, the customer took up to 60 days to pay me while I had to pay the shipping invoice from his packages almost immediately. Good for reported sales, horrible for cash flow. I've since had to cancel some of those late paying accounts and limit the opening of new accounts to established businesses.
3. Forecasting sales. Stores that are three years or past have a decent historical record of their sales. Our Admin System tools allow us to download those sales and/or slice and dice the information extremely well. I've started forecasting sales using a spreadsheet that allows me to predict and then compare sales from the same month last year. You can download it here. It may need tweaked a little bit depending on your particular profit centers, but it's proven very useful.
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