REACHING FOR "STAR PERFORMER" STATUS:
HOW DO YOU RATE?
What is a "Star Performer"? A "Star Performer" is a STORE that significantly surpasses the generally recognized median performance measurements within the industry. A "Star Performer" is also an OWNER or MANAGER of a business who has higher than average expectations and demands, not only for the business but for the invested capital. We consistently find that the "Star Performers" we come in contact with have certain similarities: they manage to do the right things most of the time and they accept profit as a worthwhile goal.
Below we have listed 14 questions to ask yourself. Each question has two possible answers. Circle the answer, either a or b that more closely fits your store's current situation.
1. Financial Statements
a. Prepared once a year or quarterly. Or, if prepared monthly, chronically late, many times several months late.
b. Prepared monthly, using the standard industry format. Ready for management review by the 10th.
a. Reported on Financial Statement as a single total.
b. Reported on Financial Statement by function (ie Selling, Office, Management, etc.).
a. Paid hourly or on salary.
b. Paid using a commission system or incentive pay plan, with written sales goals.
4. Sales Training
a. It is up to the salespeople to educate themselves.
b. Regularly scheduled selling staff meetings to review new merchandise and provide sales training.
a. Direct all advertising expenditures to newspaper, radio and other printed media.
b. Maintain a high level of direct marketing activities with your customers and target market by use of direct mail advertising and telephone contact.
a. Go to market and buy based upon what you bought last year, or some other criteria.
b. Use a formal Open-To-Buy by merchandise classification to plan merchandise purchases.
7. Merchandise Classifications
a. Have a minimum number of classifications to avoid record keeping and so employees do not get confused.
b. Class structure is well defined to allow for better merchandising decisions (40 - 80 in a store selling only menswear).
a. Spend 45-60 days per year at market, without advance preparation, taking with you the top 2-3 salespeople.
b. Carefully plan your market trips. Get buying office and/or buying group help. When possible, you go to market on those days when your store historically has the least sales. If salespeople go with you, let them meet you at market for just 1-2 days and never let top 2 go to market at the same time.
9. Policies and Procedures
a. No written policies or procedures or only an outdated and un-used version. Whenever a problem arises, you make a decision and handle it based upon whatever information you have at the time.
b. Carefully thought out and written policies and procedures that include built-in internal controls are provided to all employees and used as reference materials.
10. Management Information System
a. Either do not have one, or have only a very rudimentary one that gives a minimum amount of information.
b. Have a Management Information System that gives very detailed information for each merchandise classification (Sales, Inventory, Order Status, IMU%, MD%, Shrink, GP%, STR) and each salesperson (# of units sold, # of transactions, total sales, sales per hour).
11. Purchase Order Management
a. Purchase orders written on vendor's form. Copies are not given to receiving department on timely basis.
b. Purchase orders written on your store's own Purchase Order form and a copy given to the receiving department so they can use it to check in merchandise. Purchase orders are immediately entered into the MIS and deducted from the available Open-To-Buy amount.
12. Personnel Management
a. Tell each employee when he is doing something wrong.
b. During the interview the job description was thoroughly reviewed. Each employee is given a written job description when hired defining the requirements of their job and what is expected of them. All employees are given a formal performance review at least semiannually.
13. Expense Budgeting
a. No expense budgeting done.
b. Formal budget prepared each year, by month. This budget is compared to actual figures each month and corrective measures taken immediately when expenses get out of hand.
14. Organization Structure/Management
a. Informal organization with family members and other managers doing what they want and stepping on each others toes.
b. Well-defined organizational structure with a written job description for everyone, including family members and management.
Now, give yourself 1 point for each "a" answer and 4 points for each "b" answer and see how you rate.
50-56 points: You are making money and having fun.
28-49 points: You are surviving, but need to make improvements.
14-27 points: You are sinking, and you know it.
If you did not score at least 50 points, there is room for improvement. Go back and review all the questions for which you gave an "a" answer as these are the areas you should consider working on as you begin your quest for "Star Performer" status.
It can be done! It is being done! What are you waiting for?