Last week I challenged you to get inspired and then begin working on your 2016 plans. The video here is of Bert Jacobs, co-founder of Life is Good, and co-author of Life is Good, the Book that I recommended to you last week.  If you failed to order the book CLICK HERE to do it now. I hope you'll invest 13.5 minutes to watch the video (click on image on left), and that you'll invest in others by watching it with them.

If watching the video didn't get you inspired - well I guess we tried. To fix that you'll need to watch the video again. If you didn't watch the video then you'll have to watch it. I don't give up easy.

Crystalizing to one central idea has the power of a laser beam to cut through minutia and matters that don't matter much at all so we can accomplish greater purposes. Good business is not at all about being bigger, it is about being better. Life has become progressively more complicated and time-consuming yet no one on earth has found more time to run an ever-increasing and ever more complicated business.

When the Life is Good guys found that their central idea is to spread optimism their company just clicked in and went from a 6-year result of less than $100k in sales to over $3 million in the next 6 years. Today their sales are over $100 million still based on that one simple idea of spreading optimism. Bert makes an excellent point in this statement:

"The people who buy things have taken control from the people who sell things." - Bert Jacobs

The biggest problem with selling things is that it is a tough sell if they don't work well.

Companies that aren't focused on where they're going, why they're going there, and how they're going to get there are not working well and trying to sell their products and services is an uphill battle today. The customer's control is mostly about their Internet enabled choice to do so, or not to do so.

Now to Streamlining

If you want to have a great 2016 I can tell you that it is going to be even more complicated if you don't find your focus and streamline what you're doing in every way you can possibly do so. This starts by eliminating unnecessary distractions so you can focus and concentrate your mind and other resources on the main central idea of what you want to do.

Start by streamlining your product selection. Look first at what is not selling. If you want to gain financial success at all the first thing to do is to increase your product turnover. Low inventory turnover is a silent strangler of your finances. That is a very simple statement. It is also the simple truth. Cost of goods sold takes the most money out of your bank account. Somewhere between 40 and 60 percent of all of your income goes to buying stuff. But the problem isn't that you're buying stuff. The problem is that too much of it isn't turning over quickly enough to not lose money.

Run a report of the items you sell during each season of the year. Columns for the item name, quantity sold, margin percent, margin dollars, and sales dollars provide the information you need to decide what to eliminate. Sort this first by the items sold column. Go to the bottom of that list and count up 20 rows and draw a line across it. Now eliminate every item below that line that you possibly can. Count up another 20 rows and draw another line and eliminate another set of items. Count up another 20 rows and repeat the process until you have eliminated as many items as you can.

Burn the Boats

Once you've eliminated items from inventory take another step to make sure they don't come back to haunt you. Take that report and go to your computer and enter a DO NOT REORDER note for each of the eliminated items. Come up with a liquidation plan for the items remaining in your inventory. If you don't buy other items from those companies call those vendors and close your accounts.

Once you've streamlined your inventory you have to deal with the underlying issue of how it got out of hand. There is a lot of irrational thinking that goes into buying inventory. It is far too easy for buying decisions to be made in most companies. Buying is too much fun. Science shows that good-feeling endorphins are released in our bodies when we buy. That's why some customers are shopaholics. Unfortunately though some retail store buyers become shopaholics.

I'm not trying to kill all your fun. The real fun comes later when you've made more money (not just sold more stuff) and you get to receive a Best Practices or High Achievers Award at the 2017 Fall Event. You'll also have profit to improve your store and save some for a rainy day. You may even be able to accomplish other goals. Last week a client I have worked with to streamline their inventory told me that when they went to their distributor show this year it was not as much fun. Mission accomplished.

Now for a touchy subject. One of the boats you may need to burn may have a person in it. This might be the "rogue buyer", the person who doesn't get it and keeps buying stuff without regard to good business practice. This person may be a family member, or maybe even closer than that. It may be you. If it is you, it may be necessary to fire yourself from buying and that may be the most profitable decision you'll ever make.

Never-Ins

You've probably heard of Never-Out's but you may not have heard of Never-In merchandise. Never Outs are items you should never run out of during a particular selling season. Never-In's are items you should never have in stock during a particular selling season. A Never-In is simply something that should never have been bought in the first place. Never-In's may be an entire category or an individual item. Sometimes a Never-In is something you decided previously didn't sell and you already decided that you wouldn't buy it again but you didn't burn the boat it was in.

Repeat after me (out loud please) the following words "forms are my friends." Then CLICK HERE FOR PDF, CLICK HERE FOR MSWord DOC to download a Never-In form. Put it to good use.

Your friend,

Sid