Bob Dylan was right, the times they are a-changin. With the economy in trouble, it may be tempting to take drastic measures to keep your business investment afloat but you might want to stop and think before making any big decisions...
stuffed.co.nz -- Glen Fergusson - Sales and Marketing manager for a brand new Californian Porsche dealer has lost his job and faces possible legal proceedings as the company strives to reclaim the costs of the 18 Porches given away free under Glen's Opening day "buy one get one free promotion" "I admit I didn't really do the numbers properly on this one" said Glen who told reporters that he had "seen the concept work really well for coffee stores" and in terms of numbers you could argue that Glen's campaign worked. As the new Porsche dealer sold 19 Porches [sic] in the first hour of the store opening" [Read the full article]
Ok, so Snopes.com declared the story false, it was written by New Zealand's humor site stuffed.co.nz , but either way it's entertaining and there is a lessoned to be learned:
Don't fall for the old "making it up on volume" scheme.
Slashing prices may seem like a good way to move your inventory out the door, but before you get the "Super Sale" signs out take a step back.
Reducing your prices means reducing your gross profit margin. Even though products might be flying off the shelves without much effort in the short-term; it might actually take your company longer to make up what was lost in the markdowns, making you work even harder to break even.
Paul Williams of Idea SandBox advises in his blog on MarketingProfs Daily Fix that marking down prices can make your customers think that your products aren't worth their original price, which means that unless your customers "just gotta have it," they'll more than likely wait until you slap a sale sticker on it before they buy.
Williams advises that instead of offering everything at a discounted price, try offering additional products or services to your customers, this makes them feel like they're getting one heck of a deal and are getting the most for their money. If your company does it right, you'll create a win-win situation; your customers are happy and you retain their business and make money.
Times they are a-changin', but there is one thing that remains the same in these tough economic times: higher quality deserves higher prices, and you deserve to charge what your product is worth. If your company is in the business of quality, then your customers will remember you even as your competitor is cutting prices.
Add to Tip'd
Remember the idiom, "Don't put all your eggs in one basket"? That classic saying applies to all areas of business, including accounting. Knowing the latest technology is beneficial to running your business, but don't forget that having a firm grasp on accounting basics is essential.
To better understand your company's financial stability, you need to understand your company's current ratio. Simply put, your current ratio (also commonly referred to as liquidity ratio, cash asset ratio, and cash ratio) tells you whether or not you have enough resources to pay your bills over the next 12 months.
Calculating your current ratio is easier than it may seem, you simply take your company's total current assets (cash, short term investments, accounts receivable and inventory) and divide it by the total current liabilities (accounts payable, wages and salaries payable and accrued taxes, along with other liabilities).
Let's say your company has $75,000 in assets and $60,000 in liabilities. That means that for every $1 your company owes, you have $1.25 in assets.
Ideally, your company should have $2 in current assets for every $1 in current liabilities, or a current ratio of 2:1. The higher your ratio, that more liquid your company is; meaning that your assets are easily converted into cash.
The key to running a great business is to be proactive, knowing your current ratio can help detect problems. A ratio that is less than 1 can be dangerous. It could mean that your company may not be able to pay off all of its debts.
It may seem like having a ratio greater than 2:1 would be great for your company but it could mean that your business may have some underlying problems. Having a ratio that is too high can mean that your company might have an excessive amount of inventory or that you have customers who have balances in accounts receivable when they still have yet to pay their bill. Checking your current ratio is simple and taking the time to do it on a regular basis can help you foresee problems your company might face. Don't put all your eggs in one basket; new technology is great, but so is good old-fashioned know-how.
At DataCraft, we're excited to be participating in Blog Action Day. We're also really excited to have Kim Adams-Bakke from the Rock River Valley Food Pantry as our guest blogger for this week.
Staggering numbers, increasing percentages, millions affected-I'm not talking about the Wall Street bailout but about people living at the poverty level in Illinois!
It is astounding to me that today in Winnebago County, where the majority of the Rock River Valley Pantry clients live, 41,900 people live below the poverty line (annual income of $20,650 for a family of four) and another 21,200 individuals live in extreme poverty ($10,325 annual income for a family of four). These individuals are children, the elderly, employed men and women, the disabled, and the homeless, going hungry. Hunger is a hidden symptom of poverty.
Hunger effects the preschooler that is developing both cognitively and physically, the first grader sitting in the classroom that can't concentrate because his belly is growling, the single mom at the end of the month scraping together change from the bottom of her purse to buy milk, and the grandmother wearing her coat and sitting under a blanket in her home in order to keep the heat turned as low as possible in order to have money for food.
For the majority of our clients the hardest thing they have ever done was to cross our threshold and ask for food for themselves and their families. We have lost count of the number of times we have heard, "If it wasn't for my children needing to eat I wouldn't be here asking for help." A person's life can change overnight, with one phone call, with one layoff notice. As a matter of fact some of today's Pantry clients were yesterday's donors!
At the Rock River Valley Pantry our clients are eligible for two days worth of food each month. We would love to be able to provide more but right now we are trying to ride out the "perfect storm." A storm that finds us with donors that have less discretionary income to help support the Pantry and yet a client base that grew by 35% over the last six months, a storm that finds funding agencies, corporations, and foundations with fewer funds available to help those that may be giving up a meal so that a child can eat.
If you would like to be part of the fight against hunger we can use your help as warehouse volunteers, food drive coordinators at your place of work, with food recovery from local retailers, program sponsors, individual donations, and advocates for those that need help. 
Hunger exists-you may not see it but it is happening all around you. Ask the more than 63,000 individuals here in Winnebago County what they had to eat today.
The Rock River Valley Pantry is located at: 1080 Short Elm Street Rockford, IL 61102 (815) 965-2466