Financial statements have valuable information that can help you make more informed business decisions. But if reading those statements feels like reading a foreign language, don’t worry, you’re not likely the only retailer who feels that way. Here are some training tools and articles that will help you understand that language, and then use it to your benefit.
Cost of Doing Business
NRHA annual study provides detailed financial information from hardware stores, home centers and lumberyards. The report is designed to provide comprehensive, yet straightforward, guidelines for analyzing the profitability of your operation. This report is free to retailers who participate in the study. Otherwise, you must be a NRHA member to access the report. To join NRHA, call 800-772-4424.
Cost of Doing Business Resources
NRHA’s Cost of Doing Business Study will give you industry averages on the numbers in your financial records. The following resources will help you understand and use those numbers. Three presentations help you understand Transaction Size, Payroll and Gross Margin Return on Inventory (GMROI). This resource is free, and you can find it at www.nrha.org/freetraining.
Easy Ways to Cut Your Expenses
While September’s feature article in Hardware Retailing, “Hidden Figures,” looked at some large ways retailers are saving money, sometimes cutting a few pennies here and there can add up to big savings. This news post will give you some ideas for how to save money on operational expenses. Go to www.hardwareretailing.com/easy-ways-to-cut-your-expenses
Our Three Pennies of Profit
One of NRHA’s longest-running training tools is designed to help employees understand the basics of retail profit and loss. This training video is free to watch, but you must be an NRHA member to test employees on the information. Go to nrha.org/ThreePennies to see the “Our Three Pennies of Profit” video.
If you want to dive deeper into the issues of pricing, then read “A New Generation of Pricing: Competing in the Information Era” from the Hardware Retailing archives. This article, published in March 2015, reviews pricing strategies different retailers are using to stay competitive while maintaining margins.
One area of expense that concerns many retailers is employee compensation. Are you paying your employees enough? NRHA’s Employee Compensation Report will help you take a deeper look at payroll expenses. It includes information on average wages by position, payroll expense structures and more. This study will help you gauge if your payroll expenses are in line with industry averages. Click Here for the report.
Once you start looking at your inventory management numbers, an article from the archives of Hardware Retailing will give you tips on how to improve them. “Inventory in Motion,” from the April 2016 issue, analyzes give critical parts of the inventory cycle and offers strategies for making each part work more efficiently.