| What is a "Star Performer"? A "Star | | | | Order Managementa. Purchase orders written on |
| Performer" is a STORE that significantly | | | | vendor's form. Copies are not provided to |
| surpasses the generally recognized median | | | | receiving department on timely basis, |
| performance measurements within the industry. | | | | perpetual outstanding order position is not |
| A "Star Performer" is also an OWNER or | | | | maintained by classification.b. Purchase |
| MANAGER of a business who has higher than | | | | orders written on your store's own Purchase |
| average expectations and demands not only for | | | | Order form and a copy or facsimile is given |
| the business but for the invested capital.We | | | | to the receiving department so they can use |
| consistently find that the "Star Performers" | | | | it to check in merchandise. Perpetual |
| we come in contact with have certain | | | | on-order status is maintained by |
| similarities: they manage to do the right | | | | classification. Purchase orders are deducted |
| things most of the time and they accept | | | | immediately from the |
| profit as a worthwhile goal.To find out how | | | | Open-To-Buy.12. Receiving & Markinga. Treat |
| you and your store rate, take the following | | | | the receiving and marking function as a |
| quiz. Each question has two possible | | | | necessary evil, permitting everyone to help |
| answers. Circle the answer that more closely | | | | out in the receiving, tagging, etc.b. Assign |
| fits your store's current situation.FINANCIAL | | | | the receiving and marking function to one |
| SYSTEMS AND CONTROLS1. Financial | | | | person as their primary responsibility and |
| Statementsa. Prepared once a year or | | | | have written procedures for handling |
| quarterly. Or, if prepared monthly, | | | | receipts, returns and transfers.13. Achieve |
| chronically late, many times several months | | | | Sales Increasesa. Compare this year's sales |
| late.b. Prepared monthly, using the standard | | | | to last year's sales and are satisfied with |
| industry format. Ready for management review | | | | any increase.b. Develop monthly sales plans |
| by the 10th of the following month.2. | | | | for each store, classification, and |
| Expense Budgetinga. No expense budgeting | | | | salesperson and thoroughly develop and |
| done.b. Formal budget prepared for year, by | | | | execute a plan to achieve sales increases |
| month. This budget is compared to actual | | | | that consistently exceed the inflation |
| figures each month and corrective measures | | | | rate.PEOPLE MANAGEMENT AND SALES |
| taken immediately when expenses get out of | | | | DEVELOPMENT14. Sales Traininga. It is up to |
| hand.3. Payrolla. Reported on Financial | | | | the salespeople to educate themselves.b. |
| Statement as a single total.b. Reported on | | | | Regularly scheduled (weekly) selling staff |
| Financial Statement by function (i.e. | | | | meetings to review new merchandise and |
| Selling, Office, Management, etc.).4. Payroll | | | | provide sales training.15. Marketinga. Direct |
| Budgeting and Schedulinga. Everyone comes to | | | | all advertising expenditures to newspaper, |
| work when the store opens and leaves when it | | | | radio and other printed media, usually with |
| closes. Payroll expense hopefully is not too | | | | little thought or planning.b. Maintain a |
| high.b. Payroll expense for each | | | | high level of direct marketing activities |
| responsibility area is budgeted monthly a | | | | with your customers and target market by use |
| year in advance and weekly at least three | | | | of direct mail advertising and telephone |
| months in advance; each month the actual vs. | | | | contact.16. Personnel Managementa. Tell each |
| budgeted is analyzed; weekly schedules are | | | | employee when he is doing something |
| posted well in advance; split shifts are used | | | | wrong.b. During the hiring interview the job |
| when needed.5. Shrinkage Controla. Take a | | | | description was thoroughly reviewed. Each |
| physical inventory once a year and make | | | | employee is given a written job description |
| little or no effort to reconcile to perpetual | | | | when hired defining the requirements of their |
| inventory records.b. Take cyclical | | | | job and what is expected of them. All |
| inventories and thoroughly investigate | | | | employees are given a formal performance |
| discrepancies to detect instances of faulty | | | | review at least semiannually in the first two |
| record keeping, external or internal | | | | years of employment and yearly thereafter.17. |
| theft.6. Management Information | | | | Organization Structure/Managementa. Informal |
| Systema. Either do not have one, or have only | | | | organization with family members and other |
| a very rudimentary one that gives a minimum | | | | managers doing what they want and stepping on |
| amount of information, or have one that is | | | | each others' toes.b. Well-defined |
| not used.b. Have a Management Information | | | | organizational structure with a written job |
| System based on the Retail Inventory Method | | | | description for everyone, including family |
| that gives very detailed monthly information | | | | members and management.18. Policies and |
| for each merchandise classification (Sales, | | | | Proceduresa. No written policies or |
| Inventory, Order Status, IMU%, MD%, Shrink, | | | | procedures or have an outdated and un-used |
| GP%, STR) and each salesperson (sales per | | | | version. Whenever a problem arises; you make |
| hour, average transaction, number of items | | | | a decision and handle it based upon early |
| per transaction) and is used regularly to | | | | individual situations.b. Carefully thought |
| monitor vital signs of the business.SALES AND | | | | out and written policies and procedures that |
| MERCHANDISE INVENTORY | | | | include built-in internal controls are |
| PERFORMANCE7. Marketa. Spend 45-60 days per | | | | provided to all employees and used as |
| year at market, without advance preparation, | | | | reference materials.Now, give yourself 1 |
| taking with you the top 2-3 | | | | point for each "a" answer and 4 points for |
| salespeople.b. Carefully plan your market | | | | each "b" answer and see how you rate.61-72 |
| trips. Get buying office/buying group help. | | | | points: You are making money and having fun. |
| If salespeople go with you, let them meet you | | | | |
| at market for just 1-2 days and never let top | | | | 37-60 points: You are surviving, but need to |
| 2 go to market at the same time.8. Buyinga. | | | | make improvements. |
| Go to market and buy based upon quantities | | | | |
| bought last year.b. Use Open-To-Buy by | | | | 18-36 points: You are sinking, and you know |
| merchandise classification to plan | | | | it. You should get out of the business.If you |
| merchandise purchases.9. Merchandise | | | | did not score at least 61 points, there is |
| Classificationsa. Have a minimum number of | | | | room for improvement. Go back and review all |
| classifications to avoid record keeping and | | | | the questions for which you gave an "a" |
| employee confusion.b. Class structure is | | | | answer as these are the areas you should |
| well defined to allow for better | | | | consider working on. You may find that some |
| merchandising decisions.10. Markdownsa. When | | | | of these areas will be relatively easy for |
| merchandise is sold below the original price, | | | | you to correct; for others you may need |
| simply record the sale at the actual selling | | | | outside assistance. The important thing to |
| price permitting markdowns and shrinkage to | | | | remember is that these improvements can have |
| become co-mingled in the computation of gross | | | | a positive impact on your store's |
| margin.b. Include planned markdowns in the | | | | success.This article was written by Linda |
| Open-To-Buy process, carefully record them | | | | Carter, President of The Retail Management |
| when recognized and compare actual vs. | | | | Advisors, a retail consulting firm whose |
| planned at the end of every season taking | | | | mission is to help independent retailers |
| corrective action where needed.11. Purchase | | | | survive and thrive. |