November 1, 2014

Opening a cellular or wireless retail store? Consider these three valuable tips…

Hundreds of people open cell phone stores around the U.S. every month. If you are opening one for the first time, be sure to avoid some common mistakes. While this is by no means a complete list of everything you need to think about, these 3 tips will certainly help!

Align your employee compensation plan with your carrier commission agreement

Invest some time to REALLY understand how you get paid and how you make money. You’re wireless carrier will outline your compensation in your carrier agreement. Ask your Account Executive to give you some guidelines as to what you should expect your “mix of business to be”. In other words, look for some general guidelines on which plans will represent which percentage of the business, and ask for similar current info on the handsets.

Many newcomers to the business go to the most lucrative plan and handset, and in their mind that becomes the benchmark for what they make. Don’t make that mistake!

Once you have a feel for the overall mix, you then want to make sure that you build your employee compensation plans to incent your employees to sell the plans that make you more money. If you don’t you can fall into the trap where employees take the “path of least resistance.” They’ll sell the cheapest plans and the cheapest phones and won’t add features. This does you AND your customer a dis-service. Plus, at the end of the day, you’ll make less money.

Take the time to build your point of sale properly

They say the devil is in the details. Many newcomers to the business (and quite frankly many veterans) simply do not spend enough time in the details. This is especially important in the beginning, and can save you many headaches, time and ultimately money in the long run.

If you are not analytical – assign someone on your team who is. One way to do this is to think ahead a few months. What information are you going to want to look at? What reports will you want to run? What financial information will you want to be able to drill down to? What information will you need to reconcile your commissions and pay your people? How many locations do you plan on having?

If you look into the future it will help you determine what you need to do now. Once you’ve identified what and how you will want or need to look at things, then you can plan on how to set up your point of sale system now. There are lots of decisions to make…how detailed to track rate plans, how to identify inventory items, whether or not to track feature add-ons, whether to use the built-in employee commission systems and so on.

As they say…do it right the first time…it will pay huge dividends in the long run.

Build some reserve into your cash plans

If your new wireless business is based on a trailing commission model, then you should build some cushion and reserve into your cash flow plans. It is a fact of life that short-payments occur in the wireless industry. This can be caused by a multitude of reasons. Employee fraud, innocent mistakes, carrier mistakes, customer fraud and many more. If you plan for and reserve against such shortages you will be in a stronger position if shortfalls occur. This doesn’t mean you may never get your money, but you should plan wisely.

The wireless business is also capital intensive when it comes to inventory. Be sure you understand the inventory needs of your business, and be sure to account for the quickly changing handsets. Over the last few years handset lifecycles have shortened dramatically and consumer demand can shift fast. Keep a keen eye on your inventory. I’ll save the inventory control best practices for another day!

Comments

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