R.O.E.
Return On Equity or Return On Effort?

Businesses, for investment purposes, are often analysed and measured based on their Return On Equity (ROE).
Small business should also be measured by ROE – but in this case it should be Return On Effort – after all the biggest investment for a small business owner and staff is in time and effort – you regularly hear the complaints of small business people that their business seems to take all of their time and there never seems to be enough time to work ON the business and plan.
The Editor is amazed to note that many of the small business people who complain as above are also those who don’t follow the simple rules required to be a true success in small business – regularly walking down the street in his local CBD observing the lack of effort put into making the retail businesses attractive places to go into and spend your money – retail establishments need to create an inviting first impression and shout out a message of “come in here – not my opposition”, and yet the shop awnings and shop fronts are so shabby that the exact opposite impression is given – almost a message showing that the store owner really does not care about the business’ appearance – why would you enter their store based on that.
And these are the same small business people who complain when a new business comes into their area – all bright and new – and starts to take their customers – the same customers that have shopped with them for years but who are attracted by an exciting new presence in the retail strip, while the existing stores are looking tired and shabby – all for the
sake of a small spend
in keeping their shop
and surrounds spick
and span – and yet
these same businesses
probably spend
thousands in local media advertising to entice people.

“I can’t afford to
spend money on my
shop’s appearance –
business is tough!!”

Which shopping strip would invite you to
come in?

Some Rules to Achieve a Fair Return On
Effort in Small Business?

Successful people do not play the victim:-

Those shop owners who complained about a new competitor coming to take their customers probably were in the first shopping strip shown – and rather than work out how they could compete and keep their existing clientele, they are more likely to play victim and complain to anybody who would listen.

Laugh and have fun – and so will your customers:- Doing business with you
should be an experience that your clients will remember – meaning they are more likely
to want to come back and not care who is
actually the cheapest in town.

Specialise and be the best at what you do:-We all have certain places we go to shop or do business with because we know that this business is the best at what they do – the experts – the gurus – and we know that we will get the best outcome.

Evolve or die:- It is critical that you constantly refresh your business and ensure that you are up to date with the latest trends in your area of business – people want to be sure that they are not missing out on something new or heavily advertised some knew fad or idea – you must know it or offer it.

Activity does not equal productivity:-

We all know someone who seems
to be tirelessly working and yet
at the end of the day achieves
precious little. Producing output
is the measure of efficiency not
the use of time and energy
resources and seeming to be
always busy – productivity leads to profitability.

Invest in your staff and yourself:-

Many small businesses revolve around the skills and knowledge of the owner – and often employ staff with little or no knowledge about the business or its products – and the proprietor cannot work out why sales or fees are not growing. Of all the expenses you have in small business, training is one of the most important. How will you or your staff be aware of the latest products and ideas in your industry if they are not aware and trained in how to sell and implement what it is that your business offers – whether you are an accountant, a computer shop or a dentist – you need to be up to date – get trained!