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Dreaming and Planning
Working ON your business
Once upon a time, an executive of Disney was asked about the time frame that is used in planning the growth of the Disney Corporation. The response given would very appropriately apply to any and all music retailers that want to and are planning to be around for well into the 21st century. His response was, "Build for five years, plan for ten years, and dream forever."
With a slight variation, we considered that statement as a philosophy that we adhered to in our business. On a poster hanging on our classroom wall was our own version of the Disney statement, "Dream for ten years, plan for five, work for one. We also created "want lists" which were posted so that they reminded management and staff of our plans and ideas. For example, at one point our "Disney statement" had 16 ideas that we wanted to incorporate into our business. Instead of listing the items according to the three time frames, items were listed in three sections: changes to the physical plant, changes in services offered to customers, and merchandising changes.
The first category, changes in the physical plant, included a new phone system that we wanted to have installed within the next year, a new roof on our building, creating a service center, and converting about 1,700 square feet of our warehouse to sales floor. The items on the list had a priority assigned to them, an estimated cost, and some of them were given a time deadline.
Even with those that were on the bottom of the list and that we did not expect to complete within the next three or four years, we were mindful of these objectives as we worked in the business, and how what we were currently doing would affect them. Some of these items dealing with the physical plant were on our list for the occasion when we would be meeting with the landlord to negotiate our next lease.
The second section contained services that we wanted to add to our store or services that we want to update or expand. This list was created as a result of discussions with our staff. We asked what other businesses they had referred customers to and for what services. When we had something given by several team members, we figured it was time for us to consider adding it.
These items, because they had more immediate time lines, were for the most part, given more detail. We had also spent more time calculating the exacting costs of implementing each of these ideas so that we could make them a part of our immediate cash flow plan.
The third section listed departments that we wanted to add or departments that we wanted to change. As our retail market constantly changed, we found the need to revise not only our product mix, but also our department mix. While our dream list did not name the departments we were going to decrease or discontinue, it did name the additions and changes.
Departments that were decreased or discontinued were all surprises to us. The reasons for our dropping these were varied, but we were fortunate that by having our list, we were ready with alternate merchandising plans.
The new departments we wanted to add were on the list because of an increase in the sales of related products, or changes in the number or type of competitors in our trade area. There were also departments that were scheduled for major reworking. When we began a revision, major or minor, we often began with blank floor plan sheets and then estimated where the merchandise was going to be placed. For example, we did not make estimates for each item, but we estimated how many linear feet were necessary for each product group.
We found that revisions were, as with the new departments, easier to accomplish by adding items on a "onesie" basis. Ordering only a minimum quantity for each of the items that were being added allowed us to work on an idea. There were several times where plans looked great on paper, but did not work properly when we began to develop them on the sales floor.
Unfortunately, we had found that our staff had to be prepared to do most of this work as we had decided to not allow sales representatives to build the sections by themselves. Having previously tried this, too often we found the sales representative's brand of merchandise prominently displayed, and competing products squeezed in a corner or on the bottom shelf.
With departments getting a major revision, our reasons for doing so included outstanding sales and the desire to increase sales, as well as departments that had appearances that were in need of improvement. As we made these changes, we usually found that by rearranging the department we had enough space to add new products.
Adding a new product was a point of discussion in our store. Sometimes a product selected seemed a bit out of place, or one that prompted a, "How many people do you think are going to come in to buy one of those?"
The person merchandising that particular section would tell their fellow team members we would have a better chance of selling any unique item than we would have trying to sell an empty shelf or peg board. By our adding items one at a time, there was minimal financial exposure and occasionally we found another new niche.
Finally, from a management standpoint, our goals had to include rewards for our key team members. We created a benefits program, profit sharing, and incentives. We were in business for a long time. And our business, in a new location with its new ownership, is bigger than ever. We are so confident that our adaptation of the Disney theme was an integral part of our business. Most definitely it was not a Mickey Mouse idea!
This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.
Profits Plus Solutions, Inc.