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Subject: Nascent Processes, Profitability & Anchors Part 1

Author:
Dennis S. Vogel
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Date Posted: 00:08:19 03/13/09 Fri
In reply to: Hillary 's message, "I'm confused about Nascent Processes" on 15:30:15 03/12/09 Thu

Hi Hillary,
Thanks for using this forum.
I realize I may be going beyond the answer you want, but I want to be sure the issues are covered & understood.

You could be referring only to processes, but why have a process unless it’s needed to profitably sell a product/service.

I don’t know your whole situation, here's the short answer: Let them do what satisfies a profitable customer base. Change what’s barely profitable or breaking even. Eliminate what costs you too much to do/offer.

You should read some or all of what I’m writing to more fully explain & validate the short answer. (I’m writing it; I hope somebody reads it & benefits from it.) You may’ve noticed other threads in this forum are long & in multiple parts. This thread will be in multiple parts, too.

I don’t know when I’ll finish it. I tend to reread & rewrite quite a bit. So, far I’ve written over 6 pages. Some things I wrote directly relate to your question & my short answer. Other parts are analogies to help explain some concepts.

Small businesses can sometimes sell things profitably when big businesses can’t. But some businesses barely hang on while selling outdated products & low-demand services.

Some retailers keep products in stock because they made an investment when they bought the products & wholesalers/liquidators won’t buy the outdated products.

Be careful about buying a store that stocks outdated products. Part of your due diligence should determine if there is (or could reasonably be) profitable demand for the products.

A discussion of how to profitably buy a store can be complicated. As a marketing consultant, I could help you with some issues, but you definitely need legal & accounting guidance. I’m not licensed or qualified to get deeply into legal & accounting issues.

A store near me sold some discontinued products (for a very low price) to an employee who used some of those in his hobbies. He personally sold some of those also when people asked for them. The retailer was no longer liable for those.

The retailer got some money for the products & made his storage & display space available. Since he sold the products for such low prices, the Return On Investment may have been low. While the products consumed space & some labor, the Return On Assets was extremely low.

ROI is critical, but low ROA dooms many businesses.

A few customers may benefit from something that isn’t profitable & may be below break-even.

When it’s legal, you may be able to delegate some tasks to them. If they want a product that’s shipped fully assembled, sell case lots to the group. Let them divide it, then you wouldn’t pay somebody to open the boxes, then unpack & display the products.

There are some circumstances, when this would be illegal—Some examples: prescriptions & anything requiring a background check or some kind of legal verification.

If other (possibly skilled) processing &/or assembly would be necessary, they may find somebody to do it or you could teach them.

If there aren’t other sources or possible options for people to get what they need, you’ll end up determining what you can afford to do. I don’t recommend cutting off a supply unless there’s no practical way you can provide what people need without jeopardizing yourself or your business. If it’s just an issue of desire & not need, you may end up dropping it.

As nations, businesses & people progress, there’s less demand for some things. It’s part of modern life.

Dennis S. Vogel
thrivingbusiness@email.com
Knowledge can be your best & strongest ally.
When you compete use knowledge to form a
competitive advantage or don't try to compete.
http://www.lakefield.net/~thrivingbusiness/
http://www.voy.com/31049/

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Nascent Processes, Profitability & Anchors -- Supplement Dennis S. Vogel 00:25:02 03/22/09 Sun

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>Hi Hillary, >Thanks for using this forum. >I realize I may be going beyond the answer you want, >but I want to be sure the issues are covered & >understood. > >You could be referring only to processes, but why have >a process unless it’s needed to profitably sell a >product/service. > >I don’t know your whole situation, here's the short >answer: Let them do what satisfies a profitable >customer base. Change what’s barely profitable or >breaking even. Eliminate what costs you too much to >do/offer. > >You should read some or all of what I’m writing to >more fully explain & validate the short answer. (I’m >writing it; I hope somebody reads it & benefits from >it.) You may’ve noticed other threads in this forum >are long & in multiple parts. This thread will be in >multiple parts, too. > >I don’t know when I’ll finish it. I tend to reread & >rewrite quite a bit. So, far I’ve written over 6 >pages. Some things I wrote directly relate to your >question & my short answer. Other parts are analogies >to help explain some concepts. > >Small businesses can sometimes sell things profitably >when big businesses can’t. But some businesses barely >hang on while selling outdated products & low-demand >services. > >Some retailers keep products in stock because they >made an investment when they bought the products & >wholesalers/liquidators won’t buy the outdated >products. > >Be careful about buying a store that stocks outdated >products. Part of your due diligence should determine >if there is (or could reasonably be) profitable demand >for the products. > >A discussion of how to profitably buy a store can be >complicated. As a marketing consultant, I could help >you with some issues, but you definitely need legal & >accounting guidance. I’m not licensed or qualified to >get deeply into legal & accounting issues. > >A store near me sold some discontinued products (for a >very low price) to an employee who used some of those >in his hobbies. He personally sold some of those also >when people asked for them. The retailer was no longer >liable for those. > >The retailer got some money for the products & made >his storage & display space available. Since he sold >the products for such low prices, the Return On >Investment may have been low. While the products >consumed space & some labor, the Return On Assets was >extremely low. > >ROI is critical, but low ROA dooms many businesses. > >A few customers may benefit from something that isn’t >profitable & may be below break-even. > >When it’s legal, you may be able to delegate some >tasks to them. If they want a product that’s shipped >fully assembled, sell case lots to the group. Let them >divide it, then you wouldn’t pay somebody to open the >boxes, then unpack & display the products. > >There are some circumstances, when this would be >illegal—Some examples: prescriptions & anything >requiring a background check or some kind of legal >verification. > >If other (possibly skilled) processing &/or assembly >would be necessary, they may find somebody to do it or >you could teach them. > >If there aren’t other sources or possible options for >people to get what they need, you’ll end up >determining what you can afford to do. I don’t >recommend cutting off a supply unless there’s no >practical way you can provide what people need without >jeopardizing yourself or your business. If it’s just >an issue of desire & not need, you may end up dropping >it. > >As nations, businesses & people progress, there’s less >demand for some things. It’s part of modern life. > >Dennis S. Vogel >thrivingbusiness@email.com >Knowledge can be your best & strongest ally. >When you compete use knowledge to form a >competitive advantage or don't try to compete. >http://www.lakefield.net/~thrivingbusiness/ >http://www.voy.com/31049/

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Subject	Author	Date
Nascent Processes, Profitability & Anchors -- Supplement	Dennis S. Vogel	00:25:02 03/22/09 Sun