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Denton Record-Chronicle

7

DECEMBER 2016

BC

Enterprising Voices

Holiday season often do-or-die for small retailers ’T

is the season to be jolly, not broke. Many small retailers earn 25 percent or more of total annual revenues during the Christmas shopping season. Stagnant holiday sales can be the beginning of a slow-death spiral in the coming year. Small, locally owned retailers typically don’t have the sales volume and financial resources to compete with the huge discounts offered by big national chains. Small retailers’ profit margins tend to be thinner than the big players, giving them less wiggle room on discounts. The Small Business Administration compiled the following six hurdles that small retailers face during the shopping season, and ways to avoid them in the future. ■ Lack of inventory control. Inventory control is

Yolanda OLIVAREZ | COMMENTARY

crucial for all small retailers, especially during the busy holiday selling months. It is important to remember that inventory equals profits, and knowing how much product to order, when to order it and what items to order can be the difference between having cash in the bank or aging inventory on the shelves. ■ Hiring the wrong employees for critical positions. There is a cost to hiring

the wrong people for key positions. Small firms tend to have less layers of management between the owner and the employees; therefore, new hires must be able to perform with less direct supervision and be motivated to get the job done right the first time. Avoid this issue by writing a detailed job description, and immediately instilling a sense of extreme customer service in each and every new employee. ■ Undercapitalization will kill the holiday spirit. Cash flow is the life blood of all small businesses. Cash flow allows a business to make payroll, pay suppliers and keep its doors open. Business owners should immediately increase cash flow by collecting accounts receivables in a timely manner; don’t keep cash tied up in unnecessary inventory; and eliminate un-

profitable account relationships. ■ Not embracing online sales and social media. U.S. Census Bureau data show that more than $1.2 billion in ecommerce sales were made during the first three quarters of 2016 — a 15.7 percent increase over the same period last year. By the end of 2017, it is estimated that more than 60 percent of all U.S. retail sales will involve the web. To stay competitive, small retailers must develop an online retail presence. Leverage Twitter and Facebook to promote one-day sales or plug special product lines and high-inventory merchandise. Use Facebook advertising to establish more of an emotional connection with shoppers. ■ Not delaying the employee office party and social events. It is sales crunch

time from Black Friday until New Year’s Day. Office parties can cause distractions at a time when a business needs to be especially productive. Too much food and drink can not only cause a nasty hangover but sidetrack employee focus. Consider moving the company party to after New Year’s Day and call it the annual thankyou event. Tip: Involve the entire community in this thank-you party. ■ Innovation and creativity lost. Historically, locally owned small retailers beat their big-box and online competitors by providing outstanding individualized customer service. Internet sales events have pushed large retailers to flood the market with loss leader pricing on a wide array of holiday products. Small retailers must take

the offensive by selling creative and innovative products that cannot be found at the local mall or online. Create a unique customer experience that will get shoppers to travel outside of their comfort zone and discover that out-of-theordinary shopping district with 10 trendy stores, not 100 chain stores. For more information on ways the SBA can assist your small business this holiday season, visit www.sba.gov. YOLANDA GARCIA OLIVAREZ serves as the Small Business Administration’s South Central Region administrator and is based in the Dallas-Fort Worth area. She oversees the agency’s programs and services in Arkansas, Louisiana, New Mexico, Oklahoma and Texas.

Biz on the Wire

Report: DEA records show state flooded with painkillers CHARLESTON, W.Va. (AP) — Drug wholesalers shipped 780 million hydrocodone and oxycodone pills to West Virginia in just six years, a period when 1,728 people fatally overdosed on these two painkillers, according to an investigation by the Charleston Gazette-Mail. That amounts to 433 of the frequently abused opioid pills for every man, woman and child in the state of 1.84 million people. The Gazette-Mail obtained previously confidential records sent by the U.S. Drug Enforcement Administration to the office of West Virginia Attorney General Patrick Morrisey. They disclose the number of pills sold to every pharmacy and drug shipments to all 55 counties in West Virginia between 2007 and 2012. Four of these counties — Wyoming, McDowell, Boone and Mingo — lead the nation in fatal overdoses caused by pain pills, according to the U.S. Centers for Disease Control and Prevention. The records — which leading drug wholesalers had fought in court to keep secret — show the wholesalers shipped ever-higher doses of the pills — a telltale sign of growing addictions — even as the death toll climbed, the newspaper reported Sunday. “These numbers will shake even the most cynical observer,” former Delegate Don Perdue, D-Wayne, a retired pharmacist who finished his term this month, told the newspaper. “Distributors have fed their greed on human frailties and to criminal effect. There is no excuse and should be no forgiveness.” McKesson Corp., Cardinal Health and AmerisourceBergen Drug Co. together control about 85 percent of the U.S. drug distribution market by revenue and provided more pills to West Virginia than other wholesalers. As hydrocodone and oxycodone overdose deaths increased 67 percent in West Virginia between 2007 and 2012, their chief executives were paid millions and their companies made billions. McKesson became America’s fifth-largest corporation, with the nation’s highest-paid CEO in 2012, according to Forbes. The drug distributors say they're just middlemen in a highly regulated industry and that pills would never get in the hands of addicts and dealers if not for unscrupulous doctors who write illegal prescriptions, and pharmacists who turn a blind eye. “The two roles that interface directly with the patient — the doctors who write the prescriptions and the pharmacists who fill them — are in a better position to identify and prevent the abuse and diversion of potentially addictive controlled sub-

Toby Talbot/AP file photo

Hydrocodone pills are pictured at a pharmacy Feb. 19, 2013, in Montpelier, Vt. Drug wholesalers shipped 780 million hydrocodone and oxycodone pills to West Virginia in just six years, according to an investigation by the Charleston Gazette-Mail. stance,” McKesson general counsel John Saia wrote in a letter released by the company, the newspaper reported. But the doctors and pharmacists weren’t slowing the influx, and the pills being shipped became much more potent, DEA records show. “It starts with the doctor writing, the pharmacist filling and the wholesaler distributing. They’re all three in bed together,” said Sam Suppa, a retired Charleston pharmacist who spent 60 years working at retail pharmacies in West Virginia. “The distributors knew what was going on. They just didn’t care.” The largest shipments often went to independent drugstores in small towns. The Tug Valley Pharmacy in Mingo County,

which had fewer than 24,000 people in 2010, ordered more than 3 million hydrocodone pills in 2009, while franchisees of Rite Aid and Wal-Mart ordered only several thousand each year, the newspaper reported. Morrisey is a Republican who represented Cardinal Health and lobbied for wholesalers in Washington, D.C., before winning the attorney general’s race with strong backing from drug companies. He recused himself from the state’s lawsuit against more than a dozen wholesalers after taking office in 2013. In January, Morrisey’s office sued McKesson separately. Nine smaller wholesalers have settled for more than $7.5 million. Cases against the big

three remain pending. DEA agent Kyle Wright warned Morrisey aides in January 2015 that the wholesalers were shipping both opioids in more potent, commonly abused dosages, according to emails Morrisey released in response to a Freedom of Information Act request from the Gazette-Mail. A spokesman for AmerisourceBergen suggested health experts and law enforcement would be better able to comment on whether there’s a link between pain pill volumes and overdose deaths. “All parties including pharmacies, doctors, hospitals, manufacturers, patients and state officials share the responsibility to fight opioid abuse,” said Ellen Barry, a

spokeswoman for Cardinal Health. Cardinal told The Associated Press on Monday that it now has “rigorous control processes in place to address the constantly changing tactics” of people trying to divert drugs. The newspaper interviewed the family of Mary Kathryn Mullins, who was prescribed OxyContin for pain in her back after a car crash near her home in Boone County. “They wrote her the pain pills, and she just got hooked,” said her mother, Kay Mullins. “She’d get 90 or 120 pills and finish them off in a week.” As her addiction worsened, she went to dozens of doctors, visiting pain clinics that churned out illegal prescriptions by the hundreds and

pharmacies that dispensed doses by the millions. She kept most for herself but sold some to others, Kay Mullins said. Last December, she got a new prescription for OxyContin and an anti-anxiety medication. Two days later, she stopped breathing. Her brother Nick Mullins, a Madison police officer, responded to the 911 call. He tried chest compressions, but he could not revive his sister. Meanwhile, the GazetteMail reported Monday, rules to report suspicious orders for controlled substances in West Virginia to the state Board of Pharmacy were disregarded. And the board, in turn, failed to enforce the same regulations, even as it approved spotless inspection reviews to small-town pharmacies ordering more pills than could possibly be taken by people who really needed medicine to manage pain. Only after Morrisey’s predecessor as attorney general sued wholesalers in 2012 did those companies begin filing the reports. The newspaper said it found more than 7,000 reports in two boxes at the board’s office. The regulations don’t say what to do with them, so the board didn’t investigate, contact wholesalers or pharmacies, or share them with law enforcement, the newspaper reported. “It’s not been an item that’s ever been enforced by the board,” said David Potters, the pharmacy board’s executive director. Drug companies have racked up huge fines for failing to report suspicious orders in other states, but they refused to comment about their reports to West Virginia’s board.

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December Denton Business Chronicle 2016  
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