Whether you realize it or not, January may be the most important month of the year for your retail store. What you do in January can either set you up to exceed expectations or simply repeat expectations. Too many retailers fail each year simply because they never take the time to examine results and plan for the future. Most independent retailers get so lost in the day to day operations that they rarely take a day to look "above the trees" to see where their business is headed.
When I had my own stores, it was so easy to get sucked into the every day and take my eye off the ball of running the company. Typically labeled "putting out fires" it's even become an acceptable excuse for not doing our jobs as small business owners. The truth is, I had to force myself to stop and examine the health of my stores. And I had to do it away from the stores giving myself an entire day or two to do so.
Each year, I would take at least one day (sometimes two) to go away and plan. I would take all of my data on the store performance for the year. I would have stacks of reports looking at the business from all angles. After a few years of doing this, I found that there are certain key things I needed to accomplish to have a successful year. Here are five things you should do every January to ensure that your business has the most profitable year possible.
1. Perform an Autopsy
Set aside an entire day to work on this. Turn off your cell phones, your email, and all outside distractions. Go off-site with the key executors of your business. This could be your managers, top employees or other stakeholders. Lock yourself in a room with a big whiteboard or lots of wall space for flip charts. Depending on the size of your business (i.e. multiple stores) this may need to be more than one day.
Spend 30 minutes listing all of the great things that happened last year as well as all of the not so great things for your business. Don't dwell on any of them at this point; simply get the list (as comprehensive as you can) on the wall. Then take 30 minutes and organize all of the items into buckets. Once you've organized all of the items on your various charts, spend the next two hours in deep conversation about each one. Make sure you discuss the “why's.” For example, if you had a big event one weekend, why was it so big? Too often, we focus on the “what” and not the “why” which hinders our ability to repeat the successful behaviors. Be exhaustive with this part in your discussions so you get everything out on the table - What works? What didn't work? Why didn't it work? Why does it work? etc.
2. Decide What to Do and What Not to Do
Now that you have analyzed and performed an autopsy of last year's business, decide what you will do this year in order to be successful again. Learn from your past mistakes. Build on your past successes. Be careful to make sure that you're not making lists or plans to be making lists or plans! In other words, just because you have a very long, pretty, colorful plan with graphs and charts does not mean you are more likely to succeed
As I sit in the offices of CEOs and we talk about their personal successes as well as the success of their company, consistently they share with me that the decisions on what not to do prove to be as valuable as the decisions on what to do. In essence, it's very easy for us to get excited about creative ideas. After all, as entrepreneurs in opening our business the creative part is usually what we enjoyed the most. But the one constant year over year is the amount of time available during the day to accomplish our plan. Take some time to analyze and prioritize the list of items you have on your plan. You will find great value in saying “no” to some things or “not now" to some things.
One caution here, make sure you set a timeline for each part of this process. Assign someone to keep you on track time-wise. For me, I could not trust me to be the timekeeper and lead the process. So I always assigned this to someone else. It's very easy to spend an entire day on the first two steps and then the last hour trying to "catch up." Plan and budget accordingly and then stay on task. Stop chasing rabbits and start chasing profits.
3. Make a Plan
After the analysis and discussions, it's time to put some structure into your plan. Try to organize your plan into four buckets:
Try to answer questions like: What is the sales plan month by month for this year? What is the marketing plan to help you get to that sales plan? What are the merchandise and inventory levels you need in order to get to that plan? What are the product categories you need to get to that plan? What are the product categories you should edit or delete to get to this place? How will you merchandise the store to achieve this plan? How often will you change your signs? Are the space appropriations by category and classification in alignment with your sales plan? And finally, do you have the right people for the job? Are they the right people (in other words their core values match your core values) and just need some skill set training or are they the wrong people and no matter how much training you give them they will not deliver for you.
Keep in mind that this is a plan for the year. So, if you have two names on your list that need to go, don't feel you need to fire them when you get back from the offsite. You have time. The fact that you had assessed and recognized the situation is the important part. You will take action, but it needs to be responsible.
4. Put It in Writing
It does no good to spend an entire day discussing and analyzing in proclamation over your new year without putting it on paper. It is arrogant to think that you will remember all of these great conversations, all of these great plans, all of these great ideas from this day of discussion. You must put this all in writing. Do not leave the room until this is done. Remember, it does not have to be pretty, perfect or presentable. It just needs to reflect all of the pertinent data and information. You can easily organize, add more detail and tweak the plan in the next few days. But make sure you do it. If you are like me, though, you wouldn't do it when you got back, so I always stayed behind and day two was putting it all together into the presentable plan.
Studies have shown that you forget about 50% of what you discuss within 24 hours and after 30 days as much a 75 to 80%. Having it in writing allows you to daily or weekly refresh your memory. In fact, you are seven times more likely to succeed if your plan is in writing and in today's competitive retail environment where my competition is not only the person across the street or the person across town but the person halfway around the world online; well, I can use a seven times advantage.
It's up to you how formal you want this document to look. There is no need to spend a lot of time with graphics and powerpoint. This is an internal document so it does not need to look fancy. It's the information and key points and observations of your plan that matter. The rule I used here was - knowing it's going to be shared with the whole team, what would my team think?" You want them to see how professional, organized and serious you are about the store. It will inspire them to take the plan (and you) seriously.
5. Share With the Whole Team
Once you have your plan defined, hold a meeting with your entire team. Share with your team (part-timers included) your analysis of last year and your plan for this year. If you had a great year last year a lot of this time might be celebrating and encouraging your people. The more you involve the entire team, the more likely you will succeed.
One day in January can determine your entire Fiscal year. Take the time to step away, evaluate, analyze, criticize, and plan for the coming year. It's also helpful to take a day at midyear and check on your progress. Often times, what we find in this midyear analysis is not that we need to change the plan, rather we just need to do a better job executing on the plan. The bottom line is this I cannot do this year what I did last year and get a 20% sales increase! What will you do this year to make yourself and your store better than last year?