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