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How to Calculate Ad Budgets, Shake Things Up and More

Plus tips on how to renovate your store without spending much.




My store is looking worn. I don’t have a big budget for renovations, but I don’t want to look cheap. What areas of my store can I renovate that cost a little but make a big impact?

If you’re looking for striking changes that don’t cost much, Ruth Mellergaard, a principal with New York City-based design firm GRID/3, suggests targeting the most prominent areas of your store: the walls and the ceiling. Here are some tips to make them look sharp, on a slim budget:

  • Use paint instead of wall covering. It doesn’t last as long, but it is less expensive and allows you to change your interior more often. One of the walls should be an accent color, everything else neutral.
  • If your ceiling tiles are discolored, have the ceiling sprayed. Opt for a company with retail experience that will guarantee their process retains the original acoustical quality of the tile and doesn’t bind the tile to the grid as ordinary painting does.
  • Finally — and remember, these are budget tips — if you would love to recolor your store, but don’t feel you have even the slightest touch for it, you can find help at your local paint. They have decorators on staff that will help you. And all it will cost you is the price of a can of paint.
How do I calculate my ad budget?

Advertising guru Roy Williams says it’s better to think in terms of “total cost of exposure,” which is your “cost of occupancy” (usually rent) plus your advertising budget. This means a business owner who saves money by investing in a weak location will have to spend much more on advertising, he says, adding that a high cost of occupancy, such as a landmark location, is often the least expensive advertising you can buy. How then to do the math? Williams recommends using this formula: Budget 10 to 12 percent of projected sales for “total cost of exposure,” and then adjust the figure by the store’s average markup (not profit margin). Say, for example, you are projecting sales of $1 million (10 percent = $100,000) and your average markup is 91 percent, you’d thus have a figure of $91,000. Finally, deduct your cost of occupancy (let’s say $60,000) and voila! You have it — a $31,000 ad budget.

I’m currently redoing the leave policy in our personnel handbook. What’s an appropriate policy for funeral leave?

A funeral leave policy should cover which employees are entitled to it, which family relationships qualify, how much time is permitted, and what provisions exist for extending time, with or without pay, says Suzanne DeVries, president of Diamond Staffing Solutions. She suggests using the following guidelines: Full-time employees should be entitled to at least three days’ absence with pay in the event of death in the immediate family, which includes spouse, children, parents and siblings. (Some companies include in-laws and grandparents as immediate family members). For part-time employees, leave should be given based on scheduled workdays, while funeral leave pay should not be granted to employees attending a funeral during periods when they are not at work for other reasons, such as vacation, holidays or illness. According to DeVries, leaves to attend funerals of other relatives or friends should also be granted at the discretion of the supervisor, and this condition should be stated in the handbook. You can also state that supervisors may ask for proof of a death, i.e. a funeral card or a death notice. Although this is rarely necessary, including this statement will help keep your policy from being abused. “Be sure to send a card and flowers, and express condolences,” says Devries. “These gestures assure employees of the good will your policy has put in place, and their loyalty is worth your effort.”

Any thoughts on how to breathe some fresh air into our business? We haven’t had a good idea in ages, and I’m feeling we need to shake things up.

Every good idea requires not only a fresh (and often random) catalyst, but also a new way of looking at things. In the words of the design consultant Tom Kelley, you want to achieve “the sense of seeing something for the first time, even if you have actually witnessed it many times before.” That explains the success of asking new employees (say about a month after they’ve been added to payroll), what changes they would make to the way your store is managed. Constraints, such as radically slashing a budget for a certain department, are a well-proven source of new ideas and creativity. Reconsidering an issue in a different physical context seems to help (yep, there’s something to be said for train carriages and mountain tops, but even just a room with a high ceiling will do), as does picking some specific type of person — a doctor, an astronaut or a historical figure — and imagining what they’d do. The key is to shift perspective as randomly as possible. Humans have a deeply wired preference to stay on the well-trodden path. But it’s a place you’re unlikely to find those such serendipitous collisions are at the root of nearly all good ideas.



P.L.A.Y. Media Spotlight

At P.L.A.Y. — Pet Lifestyle & You — toy design is definitely a team effort! Watch PETS+ interviewer Chloe DiVita and P.L.A.Y.’s Director of Sales Lisa Hisamune as they talk about the toy design process, the fine-tuning that makes each toy so special and why every P.L.A.Y. collection is made with independent retailers top of mind.

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