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Profitability Thru Structure

Creating Policies and Procedures

When it comes to merchandising and advertising, most independent retailers will go to great lengths to distinguish themselves from the mass merchants. In an informal poll taken at the Shot Show in Las Vegas in January, retailers agreed that there were a number of items that they should stock, that could also be found in the mass merchant. This was due to the overwhelming popularity of the items among consumers.

Yet, these same retailers made a point to shop for manufacturers that either did not sell to the mass merchants, or through some manufacturers, the retailers stock a more upscale line of products. This effective strategy of duplicating some of the products of the mass merchant, and then taking a different tact with others, can effectively be applied to other areas of your business.

In this, and future editions of Retailer's Notebook, we are going to examine management tools that we would undoubtedly find with a mass merchant, but perhaps not find in many of the independent merchants. Again, this is a situation where we need to duplicate the mass merchant, but be able to adapt the situation to better serve employees and customers.

Job descriptions, job specifications, store policies, and store procedures, can all become valuable weapons for your business. If you agree with the expression that you aren't going to shoot your limit without the right weapon, perhaps you will appreciate knowing these "weapons" will assist you in getting the maximum from your business.

Development of these weapons to their fullest potential will be easier, and involve the least amount of time if you are holding staff meetings at least every other week. Even if there is only yourself and a couple of part time employees working in your business, regularly held staff meetings are a sure way to increase profits, and to get the maximum efforts from your employees.

These staff meetings provide you with the occasion to gather all of your staff to discuss problems, advertising, opportunities, as well as the setting in which to develop these weapons. With many retailers, these meetings will begin as a series of gripe sessions. But, after the first few meetings, and by inviting everyone to participate, you will find that you are developing new solutions to old problems.

You will begin to find that your meetings, which should be no longer than one hour in length, will now have time available to discuss better methods of taking care of your customers. As you enjoy these positive experiences, you can begin to develop the four weapons.

Policies and procedures are the logical next steps in achieving your goal of profitability through structure. With this issue of Retailer's Notebook, we will discuss policies which can be defined as the rules of your business. Policies usually detail situations such as your dress code, personal usage of the telephone, and the holidays that your business is closed to observe. Again you think, "I have a small store, and no time to write these things down."

This is all the more reason to create a policy manual. As independent business owners and managers, there are tremendous demands made upon your time and efforts. By creating a policy, you give direction and consistency to yourself and your staff. Especially in a small business, where friendships tend to develop between employer and employee, there is a need to have written policies to avoid personality conflicts.

And if your business has ever been the subject of an unemployment claim which you believe was unjustified, policies can go a long way towards receiving a favorable judgment.

Creating policies should be a slow and gradual procedure. From our personal experiences, we found that even after seven years we were still creating, deleting, and changing our store policies. The overall idea is to foresee the potential of a conflict, misunderstanding, opportunity to increase profits, or cut expenses, and then by working with your employees, create a written policy to address the situation.

An example that most retailers can identify with is the matter of requesting days off, vacations, and calling in sick. After experimenting with several solutions, our policy on this matter evolved to create a list of each employee's phone number. Along with this list was our written policy which stated how vacations were earned, how to put in a request for vacation time and when they could be taken. An explanation was also given that flexibility was necessary for everyone to assist in covering a schedule when one employee was on vacation.

The matter of requesting days off and calling in sick were the more difficult matters to resolve. Again, our solution was to state that the owner/manager would assist an employee to find someone to cover a work shift if notice of at least 24 hours was given. However, with less than 24 hours notice, the absent employee was required to find their own replacement. The final point was to explain a person calling and leaving a message of, "Tell the boss I am sick and won't be in today", could be subject to termination.

Does the policy sound tough? Yes, and it was tough to initially administer. But after the first couple of situations of needing to speak with an employee about their absence, our problems of working understaffed were being resolved.

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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.

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Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179