Skip to main content

A quick and fantastic guide to making profits

Bob Gorton's book Boosting Sales  (Bloomsbury, £9.99) available on Amazon, gives the owner of every business a lasting insight into the simple rules that will help you make more money than you are today. The success of the book is not because it is full of new ideas but because it presents simple business rules in a way that is easy to grasp and easy to follow.

"I once tried sport parachuting," Bob writes, "and when I had stopped trembling for long enough to listen to him, the jump master taught me a very important lesson. He said: 'Once you are out there, look at the white cross on the ground, because people generally hit what they are staring at.' So those people who look hard and constantly at the competition...seem to find a lot of it. Look hardest at your customers, you will better understand their wants and needs and find more customers."

The book is organised logically. Bob is an engineer and he is sharing the rules for business success, rules that he has used in his own companies. In his introduction, he demonstrates an empathy with small business owners that underpins the whole book and notes three issues that most operators face:
  • lack of cash
  • profit margins under pressure
  • not knowing where the next order is coming from.
His book sets out to identify the underlying relationships between growth, risk and profitability that "impact on the imperative for a business to grow". And he provides practical techniques that "will deliver that growth in a low-risk affordable way".

The first question he deals with is do you want to grow. "So why do owners want to take on increased risk in exchange for growth, especially since the chances of failure seem heavily weighted against them?" he asks.

"Frankly, some don't," he answers. Most UK businesses (74.1 per cent) don't employ anyone and the owners are content "just to earn a living that maintains their lifestyle". If that is you, then this review is not for you and this book is not for you.

However, if you want to grow then this book will help you work out how to do it. You will have to get out a calculator and do some sums but Bob shows you how to work out the margin that you need to make in order to be successful. Armed with this number, Bob shows you how to focus your sales efforts profitably. He shows you how loss leaders work. He shows you how to identify the right customers for your business.

Every business has at least one critical resource limitation that controls the amount of trade that you can undertake and the amount of money that can be made. Identifying this is essential if you don't want to sell too much of the wrong stuff.

For small shops, Bob says the critical resource limitation is the amount of linear feet of shelving. I disagree with him, suggesting it is the footfall that you can generate. I called him up to argue this point and he said that he could see my point of view but pushed back: and thinking about linear feet of shelving is higher on my agenda. Is it high enough on the agenda of local retailers? Looking at assortment selection through this prism changes the way I think about retail success. It may do this for you too.

Like many business books, this one demands that you spend some time with it. Bob has developed many of the themes promoted by the late Brian Warnes, who believed that most company owners and senior managers have a poorer understanding of how their businesses work than a barrow boy. The rules are simple but working them out may be hard work. It is hard work that will give you an edge and Boosting Sales is a very helpful book for this.

Comments

Popular posts from this blog

Digital disruption in the UK wholesale space

“Twenty years ago I was driving boxes to the post office in my Chevy Blazer and dreaming of a forklift,” says Jeff Bezos in his most recent letter to shareholders. A blink later and he points out that the company has grown from 30,000 employees in 2010 to 230,000 now. But his ambition is the same. “We want to be a large company that’s also an invention machine. We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness and risk-acceptance mentality that is normally associated with entrepreneurial start-ups.” Amazon is great at disruption because of its customers focus and the fact that the internet means it needs none (or very few) people between its warehouses and the shopper. The threat of Prime, its membership service, is the biggest challenge facing the UK retail market and the wholesale market by extension. It is both a direct threat and an indirect threat in that is inspiring countless numbers of othe...

Traffic lights: a fuss about nothing

I am sure that FT columnist Michael Skapinker has written about traffic lights food labelling before and his latest article is provocatively called: The food companies that make people fat. He criticises Coca-Cola and Unilever for sticking with guideline daily amounts (GDAs) when traffic lights work much better. Former Walmart Europe public affairs head Bernard Hughes wrote in to support Skapinker. He said: "There isn't ever a perfect information system flowing with beautiful logic. But traffic lights give powerful direction to the busy consumer." But in this age of smart phones surely this debate over the labelling on the packaging is easily overcome. The government can simply issue an app that when held over a bar code provides shoppers with a traffic light system. The supermarkets could do this on their websites. Surely the whole point about the future is that the internet and limitless data storage means that the shopper is being empowered with the informatio...

Sunday trading consultation: fair or fixed? You decide.

My local council, South Oxfordshire, asked me to complete a survey on Sunday trading as a local resident. The deadline is next week. The first question was about the current arrangements and what I thought. There were five options: large shops shouldn’t open six hours is already too long current restrictions are about right large shops should be allowed open for longer no restrictions. My answer was the current restrictions are about right. The next question was about what would happen if the council allowed large stores to open for longer. The menu included 10 options and a space for other. The options were that it would: encourage me to shop more in my local town give me more flexibility impact on my religious or cultural beliefs have a positive impact on my business have a negative impact on my business increase footfall to my business reduce footfall to my business provide more employment opportunities open to me in the local area mean that I need to...