Formula for a Successful Retail Store by Chris Tapken

1. Good Location with high traffic count, plenty of parking, with easy access. (no wasted square footage)
2. Excellent Professional Trained Staff. An existing, structured on-going training program.
3. Excellent Customer Service (standard of excellence).
4. Managers paid on profits; like an owner.
5. Managers held accountable through numbers; Managers get daily, monthly and yearly numbers. There is a clear vision and communication on the key economic driver.
6. Clean Store.
7. Able to service customers quickly.
8. Up to date décor with an up scale look and feel. Design elements are present.
9. Inventory controls and excellent Inventory display.
10. Technology; computer system to provide managers information and customers efficiency.

Does your company have Charisma?

Some companies have it and some don't. Companies that have charisma are full of customers and making money. There is positive energy in those companies that have it.

It is like the leader that has charisma. People listen to them. People are drawn to them. People will follow them.

The same is true for businesses with charisma. People buy from them. People want to be associated with them. People want to sell to them. People want to work for them (most important; good people want to work for them)!

Think about your company.....Does your company have Charisma?

My Inspiration: My Son

3 things every good business has:

I was told of business man asking a highly regarded consultant, "What is the one thing all good businesses have?" The consultant thought about it for a couple days and came back and said, all good businesses have these three things:

1. Priorities: The priorities of the business are clear and defined. There is effective communication on what is the most important priorities of the organization. Everyone is on the same page. The effective organizations also make sure they have the "correct" priorities defined and are working on the most important things. This is at the heart of execution. To have excellent execution, you must first define clearly what is it that needs to be done and in what order.
2. Tolerance: All great organizations have tolerance levels set that are clear and defined. Once the priorities are set, the next step is to define the tolerance levels for those priorities. Example: A priority is to gain 12 new customers per month. The next step is to clearly communicate the tolerance level for hitting/not hitting the defined priority.
3. Stewardship: There is a clear presence of stewardship in the organization. This is managements responsibility to properly utilize and develop the talents of the team. There is a clear vision of putting people in the position to win where by the entire team then makes the company better for the next generation.

Formula to Profits

1. Charts: A simple measuring stick
2. Inventory: Key to profitability (including time)
3. Pay Plans: Proper Pay is a key to outstanding performance
4. Forecast: Intelligent based on profits
5. DOC: Daily Operating Controls; a tool needed to manage daily and hit the profit targets

Definition of a Customer?

Anyone whose actions affect your results.

• Employees
• Ex-Employees
• Vendors
• Partners
• Bankers
• Distributors
• Neighbors
• Charities

These are all customers of your business that typically you forget to treat like customers. Word of mouth is the best way to advertise your business. Its cheap (free) and its the most effective. You get positive word of mouth from you customer base. Lesson: Don't forget the definition of a customer and who your customers are.

Customer Service Must = Excellence

Here is a strategy that has worked. One of the keys to success in today's retail is that of customer service. And the standard for Greenlight Consulting is Excellence. Also you must be very clear about who you are and what you are going to do. We think Ritz-Carlton does an excellent job and here is an example.

Read this and then ask, how is my business on excellence? This standard of excellence is what customers are looking for today. Example: You have 2 bagel shops in a town and one has no standards for excellence and the other has a culture of excellence. Who wins? If you organization does not have a system for excellence, call 605.359.8920. We can help!

THE CREDO

The Ritz-Carlton is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.


MOTTO

At The Ritz-Carlton Hotel Company, L.L.C., "We are ladies and gentlemen serving ladies and gentlemen." This motto exemplifies the anticipatory service provided by all staff members.


THREE STEPS OF SERVICE
1. A warm and sincere greeting. Use the guest's name.
2. Anticipation and fulfillment of each guest's needs.
3. Fond farewell. Give a warm good-bye and use the guest's name.

SERVICE VALUES: I AM PROUD TO BE RITZ-CARLTON
1. I build strong relationships and create Ritz-Carlton guests for life.
2. I am always responsive to the expressed and unexpressed wishes and needs of our guests.
3. I am empowered to create unique, memorable and personal experiences for our guests.
4. I understand my role in achieving the Key Success Factors and creating The Ritz-Carlton Mystique.
5. I continuously seek opportunities to innovate and improve The Ritz-Carlton experience.
6. I own and immediately resolve guest problems.
7. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.
8. I have the opportunity to continuously learn and grow.
9. I am involved in the planning of the work that affects me.
10. I am proud of my professional appearance, language and behavior.
11. I protect the privacy and security of our guests, my fellow employees and the company's confidential information and assets.
12. I am responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.

THE EMPLOYEE PROMISE
At The Ritz-Carlton, our Ladies and Gentlemen are the most important resource in our service commitment to our guests.

By applying the principles of trust, honesty, respect, integrity and commitment, we nurture and maximize talent to the benefit of each individual and the company.

The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened.

John Wooden Pyramid of Success

This is powerful wisdom from one of the greatest men ever. Not only a tremendous professional success but a even better man. This is truly a great human being. One of my favorite teachers.

How are your Inventory Controls?

Inventory Controls

Inventory is key part of small business success but unfortunately, often is not priority for most owners. With most business becoming increasingly more difficult and margins becoming slimmer, owners must be able to successfully manage inventory. Most business owners pay attention to only the income statement expenses and not the balance sheet items like receivables and inventory. That it is unfortunate because most of the time, a business struggles due to a lack of controls on the balance sheet.

Are you in control of your inventory? Can you answer?

• What is your current carrying level of inventory?
• Do you have guidelines for carrying levels with seasonality considerations?
• Which is your top selling products and does your carrying level reflect that?
• Which product line or individual product has your best return on investment?
• What is your average inventory turn?
• What is the most price point product you stock? What is the most price point product you sell? Is there inconsistency here?
• Do you stock what you sell?
• How often do you audit your inventory?
• What inventory gives you the greatest exposure to loss or market condition changes?

Many things can be done to boost profits in inventory. One of the key things to understand is which inventory line (if not exclusive) or individual product is providing the best rate of return on the investment (roi). Gross profit is typically sales minus cost of investment. Return on investment is gross profit divided by the investment. This gives you an annualized percentage rate of return on your investment.

Then you want to get a grasp on how long you keep the product in order to generate the gross. The goal is to turn the product quickly. Many times business owners keep products far too long on the shelves for one product and not nearly enough for the next product. The result is a slower turning inventory lowering the owner return on the investment.


To figure ROI:

1.Calculate the Rate of Return

• Gross profit divide investment cost = rate of return

2. Annualize the Days in Stock

• Days of the year divided Day Actually in Stock = Annualized turn.

3. Calculate the Velocity of your Money

• Rate of Return multiply Annualized Turn = Return on Investment (ROI)
  

Step One: Rate of Return Gross Profit 40 Investment Cost 70 = 57% rate of return

Step Two: Annualize the days in stock Days in the Year 365 Days in Stock-Actual Day in Stock 45 Annualized Turn = 8.1

Step Three: Calculate the Velocity of Money Rate of Return 57% Annualized turn Multiply 8.1 Return on Investment Equals 461%

Once you have this information, you can correctly stock your inventory and maximize your return on investment. Profitable business owners do not guess on inventory. Rather they a system based on math and very efficient with cash and hence profits.

Greenlight Consulting was created to provide leadership and tools for today's business and personal success.

Our mission statement: As teachers we provide quality consulting for a reasonable fee to help our clients reach their desired goals.

Greenlight consulting is a full scale consulting firm focusing on helping small businesses. The area of consulting include: General Accounting, Sales, Budgeting, Pay Plans, Organization, Business Plans, Financial Statements, Financial Analysis, Business Development, Bankruptcy Protection, Bankruptcy Re-Organization Plans, Management Consulting, Management Teaching, Coaching, Leadership Training, Customer Service, HR issues, Hiring and Recruiting, Computer Applications, Computers Usage, Entrepreneurship, Accounting Systems, Franchising Ventures, Marketing Strategy, Advertising and Promotion, Problem Solving, Goal Setting, Competitive Analysis, and Detailed Automotive Consulting.

Greenlight Consulting has the experience to return profitability to a struggling small business; take an average business and make it better; protect a high growth business from crashing; take a flat/declining business and make it grow; take a negative culture company and make it positive; install accountability into a company with none; make an unorganized company, organized; energize a flat company; coach and train managers/employees to succeed; get the best people hired and motivated for small businesses.

If you would like to contact us call 605.359.8920