Retail
Math - Why It Is Important
Retail organizations – in fact, any type
of organization – have figured out this equation.
Sales – Expenses =
Profits
Or have they? Plenty of businesses go
‘Out of Business’. Maybe they didn’t have it figured out.
While that is surprising, to say the
least, it’s not that far-fetched when you think about it. Not everyone is a
numbers person. Sometimes enthusiasm for a great idea overshadows the reality.
Suffice to say that any business person
needs to understand how to figure out how they are doing in terms of dollars and
cents. The end result will always be the same if no one is paying attention to
the numbers – failure.
Even a company that is selling their
products like hotcakes can’t rest on the fact that they have a product that
everyone wants. Perhaps the hotcakes cost more to make than they are selling
for. Perhaps there are way too many people working in the hotcake store and all
of the profit is being spent on wages. It only makes sense that we have to know
these things, right?
There are sayings that come to mind
here: “Look after the pennies and the dollars will take care of themselves.”
And, “A fool and his money are soon parted.”
If your store is part of a chain chances
are pretty good that your Head Office personnel are watching the financial
picture pretty closely. But that would be the big picture. As a Store/District/Region Manager
you still need to measure, monitor and follow up on all KPI’s determined to be
relevant for your store(s).
So, let’s say you track and review all
of your KPI’s regularly. What do you do with what you learn? Do you sit down
with each staff member and talk about your findings? And during those sessions,
do you hold the employee accountable and discuss ways to achieve more? If you
answered yes to these questions you are ahead of a lot of other Store/District/Region Managers
out there. If you answered no, you would benefit from some training on retail
math, metrics and KPI’s. And if you do talk to your employees about KPI’s but
come up short when it comes to how to improve any metric, then you should seek
help for that.
And there is plenty of help on the
DMSRetail website. Cheers!
