They plan to sell computers with their new Windows 7 operating system and other software in a similar way to the present apple stores. Microsoft plans to have their stores in high-profile places around the world and the new retail division of the company will be headed up by David Porter the ex-Wal-Mart executive.

Good news on the high street as an ex-manager of the Adams children’s wear chain has purchased the remaining 120 stores and brand from administrators PricewaterhouseCoopers. This take over will save the remaining in 1,900 jobs at the business, after PricewaterhouseCoopers closed some 147 of the shops and made 1,100 people redundant.

Good news in the US as Congress approve a $787 billion (£554 billion) rescue package. Barack Obama has hailed this bail-out package as an important milestone in moving the economic situation in America forward and that it should create 3.5 million new jobs. The bail-out package is to be split between tax cuts and spending with 64% to be used on social spending and the balance on tax cuts.

In contrast to this huge package in the US the Australia’s Senate have approved an AUD$42 billion (£19 billion) bail-out package. The vote to approve the plan with 30 for and 28 against, but the Prime Minister Kevin Rudd has said that this package is vital for the Australian economy.

Leading nations must push to avoid protectionism during this economic slow-down, which is what has happened in previous major slow-downs. This week at a meeting in Italy G7 leaders have pledged to prevent countries from putting up trade barriers which only lead to prolonging the economic crisis.

Maybe people are turning to drink in this economic down turn as the French group Pernod Ricard has reported a 13% rise in sales and a 5% rise in profits for the 6-month period to December 2008. This is in the same week as the biggest world drinks maker Diageo reported a 3.2% rise in half-year profits.

End of the week saw:
Stock exchanges:
FTSE 100: 4,189.60
DOW: 7,850.40
S&P: 826.84
Nikkei: 7,779.4

Currencies
UK Sterling £ to US Dollar $ 1.42091
UK Sterling £ to Euro € 1.11015
UK Sterling £ to Japanese Yen 130.249
UK Sterling £ to Aus $ 2.17845
US Dollar $ to Euro € 0.781069
US Dollar $ to Japanese Yen 91.6639

Commodities
Nymex Crude oil – $38.01
Gold – $941.35

Most businesses are stuck with the idea that the only way to increase profits is to increase prices and some think that the only other way is to increase their customer numbers. Both of these two actions will increase your business profits if they are done in the right way, however, they are by no means the only ways in which to grow your business. In fact I have listed that there are actually 7 Ways to Grow Your Business.

When I have spoken to most business owners they usually say “We can’t possibly increase our prices!” “We will lose our customers!”. So this is out of the question as a way to improve cash flow and business profitability. Also, in the present climate businesses might be finding it difficult to obtain banking finance or business loans to help with cash flow, not only because of the banks reluctance to lend, but also the rates are not that favourable right now, despite the lowest bank base rate the country has ever seen!

Some businesses are put into a ‘Catch-22′ situation whereby they feel they cannot increase their prices for fear of losing their clients and they lack the funds to pay for the advertising necessary to get more customers. In a recession though, it is even more important to continue to advertise your services and products. However, to increase your sales and your profits, advertising is not the only way to do this…more of that later. What all businesses must do and in particular in a recession, is to make sure the advertising they are doing is working.

Is your advertising working?

So what do I mean by this? What you can measure you can manage, so for example, if you take out an advert in your local news paper, you need to train your staff to ask when enquiries come in, where the enquirer got your company details from. If your new advert is not working (as confirmed from the data gathered from your incoming phone calls), this could mean one of two things; either that the advertising medium is the wrong one for your type of business; or that the advert copy needs to be changed. If however, you are not monitoring your telephone calls, how will you know whether your advertising spend is working or not?

Let me take this opportunity to tell you about three of the 7 Ways to Grow Your Business and to introduce you to Profit Increase Software. Profit Increase Software has been designed on the basis that there are seven ways to grow your business – these seven ways do include price increases and increased customers. However, what is worth noting here is that some of the 7 Ways to Grow Your Business do not have to cost the earth to do – three of these seven ways are:

1. Increase the number of customers of the type you want to have – This is quite an obvious statement and it is not rocket science. We all know that the more customers we serve the more money we make, subject to those customers being profitable customers. “Customers of the type you want to have” means that we don’t have to take on all customers, as no business wants to deal with troublesome people or people that cost more in time than in what they spend at your business.

Well let me explain to you that increasing client numbers is not always the only way to increase profitability and in a well thought out change you can actually achieve higher profits in your business with fewer clients.

2. Increase the prices charged on your products – not always a good thing to do and especially not good in the middle of a recession. We see so many companies and mostly retailers having to apply heavy discounts to their products just to stay alive. I am not therefore suggesting at this point that you should necessarily increase your prices, however, it is worth reading my article about how I tripled my prices and made my business more profitable.

3. Increase the number of times customers come back – A must for all businesses is to capitalise on your greatest asset – “Your existing customers!”. If you maintain a customer database you can use this database to your advantage, by writing to your customers on a regular basis to entice them back to buy from you. you can use this client contact to tell them about any special offers or new products or services you have. Most business owners forget about their existing customers and try to attract more and more new ones. Let me tell you it is many times more expensive to market to potential customers than it is to people that have already purchased from you and are already a customer, assuming that their experience with your business was a good one.

There are in fact, four other ways to grow your business and these can be discovered in the manual that accompanies the Profit Increase Software. This software is easy to use and it has been written using Microsoft Excel. You will therefore require Microsoft Excel to run the software, but you only need a very basic knowledge of Excel to work it.

This software has been designed so that you can quite quickly and easily discover what you can do to increase your business profits. As an example, this software was used in a meeting with a client who was adamant that he could not extract any more profits from his business, but after three hours of
pouring over figures, using this software and brain storming ideas – we added £50,000 to his bottom line! Well, the software helped us to target where the extra profit was, which led the client on to think about how to achieve that extra profit. To date this same client is still operating the idea and making the extra profit, so his pay-back is probably in the region of £350,000, as this exercise was done back in 2002!

What is even more impressive about this profit increase is that it cost the business absolutely nothing to implement the change (well it cost them my fees) and did not involve any costly advertising or marketing. The idea was sitting right under the client’s nose, it took using this software to find it and to force the thought process required to realise that there was a very simple and straight forward way to increase profits.

As another example, this system was once used for a bakery which was having cash flow problems and they had gone to the bank for a loan to alleviate the problem. However, before they went to the bank they approached their accountant – who had luckily just purchased this system. The company was asking for help in putting business plans and cash flow forecasts together. However, the accountant spent a few hours with the client pawing over figures from the business and utilising this program. Within a short space of time worked out that they could quite easily remove the cash flow problem without the aid of a bank loan.

When the accountant and their client first played with the figures on the worksheets, they were looking at additional profits of around £80,000. However, when they set to work, the actual profits in the first year were under this amount and somewhere around £50,000. But the company did not need a loan and the cash flow problem was solved and the client was more than happy with his accountant! The bank might not have been happy though!

So if you would like to buy the Profit Increase Software click this link and get to work on surviving the recession - their might well be some extra profits sitting right under your nose too. If however, you would like to purchase some of my time to help you in this process then email me at info@in-business.org. My consulting charges are not cheap, and start at £1,495, plus VAT for the day, but if you look at the results that can be achieved here, these soon pale into insignificance when those extra profits start to role in!

See also – Are there any businesses that are recession-proof?

and: What’s the price of a new customer?

and: Cash flow is king!

The average daily postbag is now 79 million items. This is five million fewer letters than two years ago.

The postal group is facing competition from commercial rivals, who handle one in three of every letter posted.

The figure provided does not include exceptional items – such as redundancy costs – which may have reduced profits.

A clearer picture of its profitability will emerge in its annual results.

Royal Mail also said stock market falls had pushed the group’s pension deficit from £2.9bn in March this year to £4bn.

Hard times

Chairman Allan Leighton said the results showed that progress was being made in tough economic circumstances.

“This strong performance has been delivered against a backdrop of falling mail volumes, increased competition, an unsatisfactory regulatory regime and the challenge of meeting the heavy demands of our pension scheme,” he said.

Cost cuts and improved efficiency have contributed to rising profits and the group will soon have closed nearly 2,500 post offices.

Royal Mail wants “fairer” regulation, arguing that it is difficult to change prices and introduce new products and services in the competitive business mail market.

A government decision on the future of the Post Office Card Account – which is expected soon – is of “critical importance” to its future, it said.

Universal problems

Royal Mail’s 350-year monopoly ended at the start of 2006, when other licensed operators were given the right to collect and deliver mail.

While it has lost business in the lucrative bulk mail collection and sorting market, it is still obliged to deliver letters to and from anywhere in the UK at a uniform tariff.

This Universal Service, as it is called, continues to be loss-making, the group said.

It noted that there were “huge challenges to be overcome to secure the future of the Universal Service”.

News reported by The BBC

The firm made a $4.37bn profit during the first three months of its financial year, up from $4.29bn a year ago, while turnover rose 9% to $15.06bn.

Finance boss Chris Liddell said Microsoft had demonstrated the strength and diversity of its business model “in a challenging economic environment”.

In after-hours trading, the firm’s shares rose more than 4%.

However, the company also warned that during the next three months it was unlikely to meet the estimates of Wall Street analysts because of the economic slowdown.

“Our customers are asking how they can save money and do more with less,” said Kevin Turner, the company’s chief operating officer.

Like many technology firms, Microsoft has seen its share price plummet in recent months – down more than 40% this year.

News reported by The BBC

The news comes at a time when one of the club’s key shareholders, US sports tycoon Stan Kroenke, has become a non-executive director of the club.

Despite failing to win any silverware, the club’s income rose by 11% to £223m thanks to more lucrative TV deals.

Its debts rose by 12% to £318m as it borrowed more to pay for redeveloping its old Highbury stadium.

But the club said those debts would fall this coming year as the development of the North London stadium, called Highbury Square, is completed and the 680 flats are eventually sold.

Takeover?

The most eye-catching development is the appointment of the billionaire US sports entrepreneur as a non-executive director at Arsenal.

The board said it had invited Mr Kroenke, who owns a 12% stake in the club, to join the club because of his experience in managing sporting businesses and to help in the further commercial development of the club.

His firm, Kroenke Sports Enterprises (KSE), owns the Denver Nuggets basketball franchise, the Colorado Avalanche ice hockey team and Major League Soccer side Colorado Rapids.

When he bought his stake in Arsenal in early 2007 it was thought he was preparing to launch a takeover.

That possibility led to the club’s former vice-chairman David Dein being forced out because of his apparent support for such a move.

Dein then sold his shareholding to the Russian billionaire Alisher Usmanov, whose investment vehicle Red and White Holdings now controls a 23% stake in Arsenal.

To thwart any hostile takeover, the remaining Arsenal directors agreed to a “lock-down” – which means they cannot sell their shares to anyone before April 2009 other than a limited number of people, such as family members.

After that, until October 2012, they cannot sell to anyone else without giving the other directors the first option to buy.

Mr Kroenke is not party to that agreement but said he would not raise his own stake in the club beyond 29.9% at any time in the next 12 months, unless it was with the agreement of the Arsenal board or if the club was the subject of a takeover bid.

BBC sports editor Mihir Bose said: “Arsenal are feeling they should broadcast the fact that the financial world may be in meltdown but they are fine.

“The elephant in the room is Usmanov, the Uzbek businessman. The question is what will he do? Will he bid for the club? That still remains a question mark.”

Stadium

The Arsenal chairman, Peter Hill-Wood, said the club was in a strong financial position which vindicated its decision to move to the new Emirates stadium two seasons ago.

“Emirates Stadium has taken our football revenues to a new level” Peter Hill-Wood

“We are committed to operating the Club as a business which is financially self-sustaining,” he said.

“This is clearly demonstrated having achieved our second highest ever pre-tax profit of £36.7m.

“Over the last two seasons Emirates Stadium has taken our football revenues to a new level, but we cannot be complacent,” he added.

The Gunner’s chairman admitted that the sale of flats at Highbury might be affected by the current downturn in the UK property market, which he said was being “closely monitored”.

But he explained that the club’s finances did not depend on this future income.

“The final profits and cash to be released to the club on completion of these property developments has not been budgeted by the club and will be treated as a bonus when received – accordingly, there is no commitment to use any such profits and cash at any specific time for any specific purpose.”

Initial income will however be used to pay off the club’s bank loans.

News reported by The BBC

Profits before tax fell to £2.093bn in the 12 months to 30 June, from £2.095bn during the same period a year earlier.

Asia Pacific, which has been a source of strong sales, was hit by the loss of the firm’s South Korean licence.

Other regions helped offset the loss, with strong demand for Scotch whisky in Latin America and beer in Africa.

Total net sales at the world’s largest drinks manufacturer rose 7%.

‘Well positioned’

“We enter the new financial year facing slowing global gross domestic product (GDP) growth and more challenging global economic trends,” said Diageo’s chief executive Paul Walsh.

DIAGEO BRANDS
Johnnie Walker
Guinness
Smirnoff vodka
Tanqueray
Baileys
Cuervo
Captain Morgan

While pre-tax annual profits fell, operating profits increased to £2.226bn from £2.159bn.

Mr Walsh said the firm was cutting its operating profits forecast for the year to June 2009 to between 7% and 9% from an earlier aim of 9%.

“Inevitably, the company’s outlook for 2009 is rather less bullish, and the ongoing rise in commodity costs could yet erode some of its operating margins,” said Richard Hunter of Hargreaves Lansdown.

But he added: “Nonetheless, the company is well positioned to withstand slowing economic growth.”

Mr Walsh told the BBC that there was uncertainty in the current economic climate but that the firm’s diversity – selling wine, spirits and beers – was a key asset that would help it in the downturn and give it “agility in changing markets”.

The ready-to-drink segment, which denotes pre-mixed drinks such as alcopops, “continued to be challenging” said the firm after seeing net sales fall 10%.

In particular, a 70% increase in duty on the ready-to-drink sector in Australia hit sales there.

The firm recently acquired 50% of Ketel vodka as part of wider plan to target higher-margin premium brands.

While the overall outlook looked more difficult, premium brands, such as Tanqueray gin, had performed strongly said Mr Walsh.

Shares in the firm edged 0.5% lower in early trade.

News reported by The BBC

The firm made a profit of $616m (£336.8m) in the three months to 1 August, down 17% on the same period a year earlier.

Restructuring costs – partly linked to job cuts as the firm looks to slim down – had also hit the bottom line it said.

The profit slump was worse than many analysts had expected.

Earlier this week, Dell unveiled two new laptops which it said were designed for small businesses, governments and educational institutions in emerging economies.

Shop presence

Chief Financial Officer Brian Gladden said Dell made had made “strategic pricing” changes in Europe, the Middle East and Africa to speed up growth.

Dell built its reputation and profits on just-in-time production of computers ordered direct by customers rather than sold through stores.

However it is adjusting that model – by getting its computers into more shops.

Mr Gladden said he hoped that its growing presence would boost demand from parents of students returning to school after summer holidays.

Sales in the period rose by 11% to $16.4bn – better than Wall Street’s expectations.

News reported by The BBC

The state-run company said net profit in the first six months of the year totalled 8.26bn yuan ($1.2bn £0.7bn) down from 37.8bn yuan a year earlier.

China controls fuel prices to limit their impact on inflation in the world’s fastest-growing major economy.

Crude oil prices have surged more than 50% during the first half of this year.

They are now trading around $114 a barrel after peaking at $147 a barrel in July. At the turn of the year oil was trading at about $96 a barrel in New York.

Sinopec processed 84.3 million tons of crude in the first half of the year, up 6.7% from the same period of 2007.

Analysts say Sinopec is likely to face a tough time in the second half of this year even though Beijing raised gasoline and diesel prices by 18% in late June.

There are fears that Beijing may scrap a tax rebate on crude imports.

News reported by The BBC

The retailer, which has more than 3,100 stores worldwide, also owns the Old Navy and Banana Republic chains.

Profit rose to $229m from $152m a year ago, but total sales fell 5% to $3.5bn from $3.69bn in the quarter.

Gap has been cutting costs, reducing inventory and slimming down its operations to boost profit margins.

Analysts expect shoppers to cut back on clothes as fuel and food bills bite.

News reported by The BBC

Industrial & Commercial Bank of China made 64.5bn yuan (US$9.4bn; £5bn) in the first six months of 2008.

This comfortably beat banks which have been embroiled in the credit crisis and have had to make large write-downs.

Chinese banks are benefiting from little exposure to US sub-prime loans and the booming domestic economy.

“According to all the interim results that have been announced so far, ICBC has become the most profitable bank in the world in the first half of 2008,” the bank said.

The results surpass the $7.7bn net profit announced by HSBC – down from $10.9bn in the first half of 2007.

International ambition

State-controlled ICBC is the world’s largest bank by market capitalisation, with assets as of 9.4 trillion yuan as of 30 June.

ICBC has bought stakes in South Africa’s Standard Bank Group and Macau’s Seng Heng Bank, as well as announcing plans to open branches in Sydney and New York.

And it said it was aiming to “become a leading international financial institution”.

It added that only 0.09% of its total assets were linked to the US sub-prime market, while holdings in US mortgage firms Freddie Mac and Fannie Mae also constituted just a tiny fraction of its assets.

News reported by The BBC