We all know what success means. It’s the achievement of results. But we don’t all define success in the same way we all want something different and a lot depends on where we are now.
For example, while Alex Ferguson is looking to win the Premier League, Rafael Benitez will be happy if Liverpool achieve fourth place yet, at the beginning of the season, Benitez’s measure of success would have been the same as Ferguson’s.
In four weeks, David Cameron will be considered to have been a success only if he leads his party to victory; Nick Clegg will be seen as triumphant if he gains a few extra seats (although expectations here have risen somewhat); Gordon Brown will be a hero if he maintains the status quo; and Nick Griffin will have come on leaps and bounds if he manages to increase his popularity rating to zero.
Similarly, independent retailers all have differing levels of aspiration. As a consequence, we all measure success differently. For me, in business, measuring success is all about seeing the real figures not the ones we want the bank or the taxman to see. It’s a measure of how our business is genuinely performing. Someone once said that statistics only show what sales we have made, not what sales we have lost aka what extra sales (and, therefore, profits) we could have made.
It is that measurement we should be forensically examining, as busy independent retailers, to help us work smarter. It’s interesting to know how we performed last year against the previous year in the same way that it’s interesting to see what we are projecting to achieve this year.
But, to an extent, that’s all it is interesting. What we really need to know need to measure is how we are doing today how we are doing this week.
Think of it like the dashboard of a car what dials do we need to be looking at to see how we are performing at the moment? For example: What sales have we made this week? What was our wage bill for the week?
If we then add into the mix what our availability of product was like, how we performed on service and what store standards were like, we begin to build a picture that tells us what we need to do in terms of setting and measuring success objectives for the coming weeks and months.
Of course, EPoS helps enormously. To begin with, it helps us to accurately scan the products at the till. But we should also be using EPoS not only to take control of our stock but also to produce reports that will help us in setting the objectives I mentioned.
Sounds obvious but I’m not convinced that enough independents use it as they should. Too often, the independent’s first response to EPoS is “How much?” as opposed to “What will it do for me?”
We should produce simple, easy-to-read, consistent reports on a daily, weekly and monthly basis that cover sales, margins, wages and overheads, break-even turnovers and productivity for example, sales per staff hour.
Then we should factor in reports on store standards from such things as regular mystery shopper visits.
That would put us in a much stronger position to identify the areas of strength as well as the areas of concern, and planning for the future becomes much more realistic. I myself use a simple spreadsheet to monitor performance and predict the success or otherwise of specific objectives.
Only with such close analysis of the details will the bigger picture of how your business is really doing become clear.
Kishor’s 5-point plan to gauge performance
1) Decide which areas you need to measure
2) Keep the reports simple
3) Keep them consistent don’t chop and change
4) Analyse them every day or every week
5) Discuss them regularly with your people and your suppliers