Sunday, August 30, 2015

Trinidad and Tobago Retail Merchants - Preparing To Face The Oil Crisis

Common Sense Proactive Tips

Lean times are certainly in our future.  A few of us can feel the ripple effect as the economy shrinks.  One vendor who operated for years in Mayaro shared the reason she no longer goes there with her goods, sales are too unpredictable there. She left when gross sales went from $6000 a weekend to about $2000. 

After deducting the cost of transportation and the time it took to setup she took advantage of one of the characteristics of her trade; mobility.  She moved her business to Tunapuna.

 Every small business owner in Trinidad and Tobago knows that the drop in oil prices will eventually affect their business.  Most know that soon they will begin to feel the economic pinch.  In the back of the minds of most business owners are expecting the economic pinch while contemplating two questions:
  1. What effect will the low oil prices have on my business?
  2. What can I do to prepare for whatever is coming?
Let’s answer the first question.  Low oil prices means a lot less foreign exchange is coming into the country’s monetary system.  It means the first signs the country will experience is a lack of foreign exchange.  This means that we cannot pay for the high import food bills, the extravagant need to have all the foreign fashion, automobiles and luxury goods.  An article in the Trinidad Newsday this week reported the opinions of a Dr. Daren Conrad, lecturer at the University of the West Indies. The article here 

 The reality is that 80 percent of our goods come from foreign.  It is only a matter of time before the supplies we now have are depleted.  At that point if supplies cannot be replaced locally, the business is in trouble.  Simultaneously, consumer demands will be for more essential goods and services.  Consumers will start making lifestyle adjustments to the lean times.  This will immediately affect demand and the bottom line of most retailers who stocked foreign good. 

 In the next few months ahead symptoms will start appearing; stores will begin to close, many with the hope of opening again when the economy recovers.  Expect that merchants will make a mad dash to sell old stock to reduce inventory.   A few will take their losses silently without any sales or publicity; one day the doors will be shut.  At this point, time is starting to devalue your inventory; waiting any longer could turn into desperation for liquid cash.

   
What can retailers do? 

 OK, here is what we do know.  We know that things are going to take a downturn in a matter of months.  We can use as our evidence the plummeting price of oil and the general elections which at this point is very unpredictable. Fact is it does not matter who wins this election, it will not change the price of oil. The falling oil price is not an illusion, we must prepare.  

At this point the government may still have to go   begging, cap in hand, to the IMF with promises of self imposed austerity. .  The reality is that as small business owners, what the government does will affect the country but it is what we do with our business that will determine whether we can ride out the upcoming economic downturn. 

 It is what you are willing to do now, not in the midst of the turbulence. Start thinking strategically First, you need to understand where you are in terms of your business.  What are your profitable products, how profitable are they, what is the turnover rate, how can you get around the FX challenge? At this point, the relationship you have with foreign suppliers will be crucial to your survival.  The predictions are that oil prices will stay low for the next 2 years.  

Can your store survive for two years without foreign exchange? It could if you take steps as soon as possible to buffer the impact. There are a lot of questions you need to answer about your inventory and profitability.  Most retail business owners carry a variety of retail items unaware of the profitability of each.  

 Inventory is a major expense to any retail business, control this and you will control a significant part of your business. While you still can access foreign exchange, you may want to consider cutting cost by making arrangements with your regular suppliers to make purchases online instead of flying to Miami or New York City. Start with an inventory audit Count and cost every item of inventory.  Date inventory, the intention is to know what you have and to consider drastically reducing the price of stale inventory.  This will be harder to do when hard time hit.


   

 Second, you need to figure out what it takes to operate lean.  Lean meaning, what will it take for you to operate at the barest minimum cash flow and investments over a specific time period.  Fixed expenses like rent/lease are untouchable but you may be able to shave off small savings by examining your variable expenses such as phone, and other utilities.  

Your biggest savings however will come from examining your operating expenses such the primary being your employees. Employee payroll represents a significant recurring expense to any business.  This may be your last resort but your preparation should consider which position, if not redundant, can be handled by another employee for a small increase in compensation.  Alternatively, you may want to adjust the working hours to focus on periods where activity peaks.  For example, instead of opening the store at 8 AM open at 10 AM saving two hours. Or you can introduce part time work if there is a need to hold on to dedicated employees.  

Be creative, each man hour you save will reduce your expenses by the number of employees you currently have. Start Now This is no time to procrastinate; one of the biggest mistakes small retailers make is to rely on hope.  Hoping that you will have loyal customers because they need your merchandise is not a sustainable plan for profit.  Loyalty can only be generated with effective customer service; over time.  The time to start building a customer data base was yesterday, today not tomorrow.  If you don’t have a customer data base start today.  Probably the worst thing you can do is stick your head in the sand and say you are not in the oil business. 

  Here’s why it is important to you. 

 The economy in Trinidad and Tobago has turned the corner, the signs have been placed and they all point to a rough road ahead.  Be proactive, ride the waves or wait on them to crash into your business. There will always be demand, with a lack of US dollars consumers will be forced to spend locally.  Online shopping is costly, according to Dr. Conrad in another Newsday Newspaper article. 

Regardless as to whether you are a retailer specializing in specific goods or you carry a large variety of merchandise; you need to prepare in the next few months.  The retail concept in Trinidad and Tobago is built on the idea that the more you have the more you are able to sell.  It is also true that the more you have, the more you must sell in order to stay profitable.   

When demand plummets as we know it will, the more you have the more you lose.  Get ready. Find our the 2 Biggest Mistakes Retailers Make Go Here  

Monday, August 10, 2015

Why I'm Voting PNM


People Want Real Services not Platitudes


I’ve never dipped my fingers in red ink.  I consider myself a social activist and feel that it is important to exercise what I feel is my civic duty to influence any election in my community or nation. 

I lived in the US many years and vaguely remember voting for a candidate who lost the election.  It did not really matter who won at the time, just the fact that I could vote in the US Primary Election was enough.

So five years ago, I returned to Trinidad a couple of years before the last election in 2010 when the People Partnership was elected into office.  My memory is still clear, I admit I was in full support of the UNC party over the PNM, It seemed like an easy choice, and Patrick Manning may have been suffering from Hubris.

Today I have a sense of déjà vu, in less than five years the UNC party proved itself to be the worst choice of governments.  Now it’s PM Kamla who is showing early signs of Hubris.  Her campaign is dubbed “Kamla 2015” She claims that the fight is between herself and Dr.  Rowley and he is a demon so she is the only logical choice.

Her NoRowley campaign, back fired like so many other mean spirited campaign Kamla 2015 have launched.  The latest in the news about that campaign were death threats that put a price on Mr. Rowley’s head of 15Million dollars.  That would effectively eliminate 99 percent of the people in TnT as having that money to pay anyone.  You connect the dots yourself.

I can’t see myself voting for ILP that is a phenomenon that really intrigues me.  That is almost as amazing as voting for Kamla 2015 by rationalizing and ignoring the some basic facts of life.

Quite frankly, I would rather vote to put an Independent into Parliament.  The way the Constitution is written now, every elected member of Parliament is beholding to their political leader.  He decides, they follow, and an Independent will always hold the needs of the people they represent first.

I’m voting for the PNM not because I love Dr. Rowley but because I will not stand by and vote for a government that has failed over and over.  A government that is fraught with dishonesty, corruption, racism, and nepotism; just to name a few. Those are my words formed from my observation over the last 5 years.

The Constitution needs to change. There is way too much power in that office of the Prime Minister.  This executive power infects the holder; it appears the weaker ones succumb faster when they taste the power.  It is the infectious nature of the office that concerns me about Dr. Rowley.  Do you remember he had a makeover when he first became political leader?  A people person would never need a makeover.  How long will he last before the power of the office infects him and the makeover melts away?

Unfortunately, at this point it’s not about Dr. Rowley, when I vote PNM it’s about the future of this country.

No amount of advertisement, in the newspaper, online, television or the radio that will change the minds of people who can see.  Promises were broken, there were typos in the manifesto, corruption festered and influence was a commodity with a price.  Trinbagonians will not sit by, well not all will, and let the country be dragged down to nothing because of one power hungry woman. Someone needs to advise the government that advertising is not effective in changing minds.  Advertising reinforces what people already believe.

There is something curiously similar to the 2010 election, ex PM Manning was delusional about his chances for victory.  What caused his gross misjudgment? 

He was wrong because the people he interacted with daily told him what he wanted to hear.  They, many of them, told him that the PNM would walk away with a mandate.   He believed them.  Is PM Kamla delusional?      

Here is the reality that hit the exPM Manning like a ton of bricks on election night, even if you have a 100,000 die hard Party followers; it does not mean you will win.  In other words, even if only 30 percent of the population of 1.3 million actually voted you would still lose the election.   


 I am voting for the PNM because I want to see improvements in the Health System, the Police Service, Education, a reduction in crime – just catch some criminals.  

Most of all I am voting for the PNM because this last government has wasted so much of TnT resources that the future for our country is at stake.  

If they had five more years the future of this country does not look rosy. .  


Sunday, August 2, 2015

Business Planning Tools For Startup and Small Business Owners

Tools To Accelerate Business Growth
Are you planning or running a “Lean” business?  The primary goal of every startup and small business owner is to make a profit.  Malcolm X said; “…by any means possible” and of course he was not talking about profit but it’s no different for small business owners.  The only caveat is that it must be legal and ethical.  Usually, resources are limited, like rag tag guerilla you must make the biggest impact with these limited resources.
Operating lean means that you have identified the essential functions in your business.  Then you find the most efficient, cost effective solutions.  It means implementing a business model that directly addresses the problem you are solving in your market.  A Lean Business Model is the most inexpensive way to test any new business idea.  
This new business modeling trend makes the long drawn out business plans obsolete.  Business plans may still be requested by financial institutions and venture capitalist but as an operational planning tool, business plans are useless.   Today, astute business owners are familiar with the Swedish business innovator, Alexander Osterwalder who developed the Business Model Generation Canvas.  If that’s new to you, read all about it Business Model Generation site here.   
The Business Model Generation Canvas is the foundation upon which other innovative business planners like Eric Reis and Ash Maurya built more sophisticated business planning tools.   Ash maintains a thought provoking training web platform and blog, the LeanStack where he introduces the concept of the Customer Factory.  He uses very simple analogies to explain what could be a vague concept.  If you are serious about finding innovative ways to build your business, follow his blog from the link above.  Ash Maurya’s LeanStack responds to the…
Biggest Challenge For Startups & Small Business Owners
It is not an easy task to install growth systems when you don’t know what they are.  Startup and small business owner think that everything they do in the business have something to do with growth.  For many, it is the first time that they ventured into the business they choose to invest their time and family’s future into.  Most apply the old “trial or error” method to resolve issues that surface.  Expensive, slow and unpredictable but most times appear like the best option for the business.  
The advancement of technology has improved business performance by reducing many of the risks businesses formerly faced.  The business model canvas focuses primarily on the performance related functions that generate profits to a business. 
It was only a matter of time before someone incorporated Mr. Osterwalder’s Business Model Generation Canvas.  Ash Mauyra did it with his Customer Factory, Lean Canvas model.   
The challenge: Use technology to make business planning easier.  
Today, I read an article entitled : How To Stop Lying To Ourselves – A Call for Self Awareness  I would like to recommend that you read it too.  It’s short and will take you only 5 minutes.   Self improvement is the only way to improve your life. Read it here.  I want you to read it because your business is “You Incorporated” What you do in your life reflects your business.
The author of the article, James Clear, makes a very potent point; “you cannot change what you don’t measure”.  My words, not his; a variation of a very popular quote.  When we make statements like; “we doing great” “business is good” “we all set” we are actually lying to ourselves.  Not being really aware makes us delusional.
The Cure
Measure everything about your business.  Install a system that ignites your business model so that you will never have to guess how your business is doing.  Easier said than done but doable with technology. First you must have a system that works for your particular business.  The system is important but even more important is the information you get from it.  Technology has made it doable.  
First you need to be introduced to Trevor and Grace, two innovators who used the concepts developed by Alexander Osterwalder, Eric Reis and Ash Maurya.  Trevor and Grace developed the software to assist business owners in executing their business model and measure each phase of the execution.  
The Tool
Javlin may prove itself to be one of the 21st century most effective business planning tool.   
Get it now, because if you do, you may still be able to get the Early Access opportunity to use the software for a year.  Javelin will make executing your business model so much easier.

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