Measurement is key to the success of any retail business. This is especially true for small retail businesses.
Measuring sales, stock, employees and suppliers is mission critical.
Without accurate and consistent measurement, you are not able to make good business decisions or to hold others to account for their actions.
By measuring you can make better decisions.
Here are some simple rules for accurate measurement in retail:
- Only sell what you can track – by scanning a barcode or pressing a PLU (stock code) to track the item.
- Do not use department keys to sell items as this denies you the opportunity of tracking individual items you sell.
- Enter into your computer system everything you sell. Record stock you receive by supplier so that you can track supplier performance.
- Enter into your computer system everything you return to suppliers – consignment stock, returns or damaged goods.
- Record all sales and other activity at the sales register by employees.
- Reorder replenishment stock using your software to create orders for you.
If you are not tracking it you cannot manage it.
By making your business data driven you are better equipped to take the emotion and gut feel out of business decisions. This will improve decision quality and accountability and, hopefully, the return you achieve from these decisions.
Businesses which do not measure stock, suppliers, employees and sales accurately often find themselves faltering without knowing why – because they have no accurate data on which to base research.
