A few months have passed since the most hectic part of the retail year, which means it’s an ideal moment for retail owners to sit down and have a good hard look at how their businesses are running.
Although ongoing performance monitoring is important, it’s also critical to dedicate a particular time of the year to setting some clear goals and asking some strong questions about where you have been and where your business is going.
This exercise is worth doing with December in mind, while also keeping the whole year in perspective. Although the following questions below are for December, retailers are advised to also ask the same questions about the previous 12 months.
Why review what is already history? If you don’t learn from history then you are destined to repeat it. If business wasn’t as good as expected, then the last thing you would want is to make the same mistakes. Without further ado, here are some relevant areas within a business and the types of questions that should be asked.
Marketing
- Did you spend more or less money on marketing activities compared with previous years?
- Did that reflect in more or less customer traffic for your business?
- Were there items marketed that created high demand?
- Did your marketing start early enough?
- What effect did you notice from competitors’ marketing?
- What will you do differently for the upcoming year?
Stock
- Were there product categories that were short of product, resulting in lost sales?
- Was this a purchase issue or a continuity of supply issue (ie. a buying issue or a supplier issue)?
- Were there any customer product requests that you could not satisfy or offer an alternative for? Were there any issues with re-orders that potentially cost sales in December? If so, how can these be minimised in the future?
- Were there any issues with product quality? (This could have a negative impact on staff confidence with the brand/supplier.)
- Did the items you purchased specifically with December in mind sell?
- How much old stock did you successfully target and sell in December?
Suppliers
- Were there suppliers who let you down with re-orders?
- Have you made them aware of this? What will you do to stop this being repeated?
- Were there any suppliers that had sales that exceeded your expectations?
- What do you plan to do about this?
- Were there suppliers you had consignment product from through December? How did this perform?
- Have you returned the balance and paid for what you sold?
Staff
- Were you happy with the staff’s performance through December?
- Are there any staff members that need recognition for exceptional performance?
- Are there any that need re-focusing because of poor performance?
- Did you give team members enough direction and motivation? If not, what is your plan to change that?
- Were there team members whose performance suffered because of the longer hours? (Tired staff are not as sharp.)
- Could you have allocated hours better?
- Did you have your best people working during peak times?
- Could they have benefited from some ‘December Focus’ training?
These questions have not been developed as a complete or exhaustive list but rather should act as a catalyst for jewellers to ask better questions regarding themselves and their businesses.
Moving onwards and upwards
Now it’s time to look forward. This means setting some key performance indicators (KPIs) and asking how these numbers ideally should look – again both for the year ahead and for the next December trading period.
Sales, gross profit and net profit
- I often refer to the quote: “Most people aim at nothing, and hit it with remarkable accuracy.” Don’t let this be a reality.
- What are your sales, gross profit and net profit targets for next December and the coming 12 months? A clear goal will increase the chances of hitting targets, which is the most important goal of all.
Stock levels
- Do you have too much or not enough stock? What do you need to achieve your sales goals?
Debt levels
- If you have debt – both personal and business – what targets are in place for reducing it?
- Are these targets broken down monthly so you know how much you want to see your debt dropping throughout the year?
Owner's hours
- What hours do you plan to work this year?
- Will you do more or less?
- What would be your ideal workload in the coming 12 months?
Website traffic
- How many website visitors do you have now?
- How many would you like each month?
- How long are they on your site for?
NB: All this information is available for free through Google Analytics. If you don’t have it, talk to your web designer about having it loaded on your site.
Social media numbers
- What social media accounts do you have and how many fans are there?
- What is your goal for the number of fans you will have 12 months from now?
- What social media do you plan to be active on and what objective do you want from this? Many owners post on their accounts with little or no goal in mind.
For those retailers who are looking for even more guidance on how to make positive changes in the year ahead, Canadian business trainer and self-help author Brian Tracy has an excellent formula that I like to follow.
Tracy outlines four key areas that business owners should address. They include:
- What should you do more? This involves looking at what worked well – either by careful planning or sheer good fortune – and whether these processes can be expanded.
- What should you do less? Think about the biggest frustrations over the past trading year and how you can have less of them. Delegation is at the forefront here.
- What should you start doing? Don’t procrastinate – make changes now!
- What should you stop doing? Are there product lines that are no longer profitable or staff members who are no longer an asset to the business? Are there activities/tasks that now appear pointless?
If you want next December and 2016 to be different from previous years then plan ahead now. Remember: it’s never too late to make New Year resolutions.