Three Focus Levels
Are we talking about money or time? The answer is obviously "both" or "either." Ask the same question about the money you are about to spend or the time you are getting ready to spend on a project.
You and Your Employees
Not only should you ask this of yourself but before giving an order to an employee consider the same question:
Direct Activities
There are three levels of activity to observe when considering what counts most toward increasing sales or improving profit. The first level is action on the selling process. This includes:
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buying
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displaying
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cashiering
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stocking shelves
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pricing
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cleanliness
These are the actions that support direct action. The relationship between support and direct action is obvious but may be different from store to store. Support activities and expenses include:
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advertising
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planning
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client relations
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purchasing equipment directly related to merchandise
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employee morale and training
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profit & loss statements
There are other activities and expenses that are necessary but do not directly affect the sales process. They include:
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supplies
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telephone
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utilities
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insurance
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daily sales reports
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dues and subscriptions
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Money and time spent on direct sales activity is the highest use of that time and money.
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Money and time spent on support is a good use of that time and money but make sure it really is support.
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Money and time spent on secondary support is the least desirable.
Too often we put too much emphasis on efficiency. Even as a society we act as though efficiency is some sort of work ethic virtue. I have noticed that too often the efficiency about which one boasts is at the secondary support level where the efficiency is usually not very effective.
A familiar example of efficiency vs effectiveness is a store that through careful pricing strategies has the beer gross profit percentage up to 28% instead of the usual 25%. However, sales in this example are $2,000 a month while the inventory is several times too large at $10,000.
Another version of the question above is: I do what I am about to do very efficiently, but does it affect sales or profitability? The Burden of Government
I propose two ideas concerning the relationship between government and business:
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Local government and business are natural enemies because they seek the same resources.
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The economy of the United States is strong because of the people of the United States despite the government.
The comments I wrote above may seem as though I suggest you ignore these expenses altogether. I urge not letting secondary support expenses and activities take away from direct sales activities, but secondary support should not be ignored. In fact, doing so can be very expensive. The more you can reduce time and money spent in this area, the more time and money you have to spend in direct sales. When you consider that it takes about $3 in sales to produce $1 gross profit, then reducing an expense by $1 has the same effect as adding $3 in sales. If you are making an effort to control secondary support time and expense, you are actually performing "planning" which is a support activity. Taking the time to read this article was "planning" activity.