For a strategic plan to effectively guide you into the future, it must take a comprehensive look at your business. The questions you ask about your business will be the starting point for knowing your strengths and weaknesses.
Robert Debs, vice president at Nation’s Best, a holdings company with 28 home improvement retail locations across the U.S., says careful planning plays a central role in keeping a business on track.
“We ask our store managers to create detailed business plans and revisit them at least once a quarter,” he says. “Our store managers work closely with their teams, as well as Nation’s Best’s operational leadership, in tracking progress on those plans. They are critical self-evaluation tools for every store and our organization as a whole. The plans help us stay organized and keep us accountable for our performance and success.”
Here are some of the areas where Debs suggests independent retailers should focus, and some of the questions to ask to determine how you’re doing. While this list is not comprehensive, it provides a good starting point for evaluating your own business.
Culture. How efficiently you run your business has a lot to do with the talent you have on staff. The work culture around your team starts with management.
- Do you put your team first and treat them the way you would like to be treated?
- Do you micromanage or let your employees make decisions and solve problems?
- Does quality and service matter, or do profits always matter more?
- Can your team operate successfully even if the business owner takes time off or retires?
Financials. This is where you focus on key retail metrics, such as average transaction size, conversion rate and salesfloor productivity. Don’t merely be satisfied with where your numbers stand currently, but what you are doing to improve them.
- Have you optimized the pricing tool available through your point-of-sale (POS)?
- Are you price-shopping to keep up with competitor’s pricing?
- Are you proactive in looking for ways to add or increase high-margin items to your product mix?
- Are you closely monitoring expenses, including payroll?
- Are your accounts receivable up to date?
- Do you have a well-documented and efficient credit application and collections process?
- Is the person handling collections the right fit for your customer base?
Inventory. The past couple of years have highlighted the fact that there are some parts of managing inventory beyond our control. There’s still a lot you can do to make sure you have the right products at the right time.
- Is your product mix diverse enough that you are the best resource for your customers?
- Are customers continually asking for items you don’t have?
- Are you cycle counting regularly and getting rid of slow-moving, excess and obsolete inventory?
- Do you have well-documented inventory management practices, and are you sticking with them?
- Are you turning inventory efficiently and in line with industry standards?
Digital. A digital presence is no longer optional. Make sure you have kept up with the many changes in customer expectations over the past couple of years.
- Are you thinking outside the box and staying as close as you can to the cutting edge of technology?
- Are you active on social media?
- Are you actively marketing your digital options?
- Are you providing buy online, pickup in store (BIPOS) and ship-to-home options?
Overall. Take a big-picture look at the overall direction of your operation and check your general attitude towards growth and change. If you are not actively investing in new opportunities, you may be hindering growth.
- Are you generally content with business as usual, or are there opportunities you are anxious to take?
- Are you actively looking for ways to grow, such as through new categories, new acquisitions, new products or finding a new customer base?
- Are you reinvesting in your company’s people, buildings and technology?
Market. While many of these questions focus on your internal operations, also take a look around you to see how the competitive landscape is changing.
- Who is your competition and what do they offer that you don’t?
- What competitors have left the market and has their exit presented new opportunities?
- Have there been recent changes in the demographics of your market and are you keeping up with the needs of your changing customers?