By Eric Parker
In this changing business environment and challenging economy, it has become essential to re-evaluate your business and refresh it at least annually. Just as annual reviews are conducted with staff to determine what they are doing right (affirmation) and what they can improve on (constructive criticism), it’s necessary to do an annual review of your business.
Successful businesses do an annual review with the objective of taking a fresh look at their business and re-shaping it for the year ahead. A good starting point is to ask: “what went well this year and what didn’t work this year”. Some of the most pressing and obvious aspects will emerge quickly. The detail should follow next, scrutinising everything from store locations to product mix and marketing.
This exercise should consider the following categories:
- Closing of non-performing outlets – This may seem obvious, but we often see clients “flogging a dead horse” in the form of a store that is in the wrong location or simply unable to achieve a turnaround. Sometimes ego gets in the way as it’s difficult to admit that mistakes were made, but in the current environment, it’s best to cut losses and move forward.
- Delisting slow-moving, low margin products – When asked about slow-moving product lines, a standard response is often: “But we have always stocked this”. Would you still stock VHS videos when Netflix and other streaming services have clearly taken over? Similarly, it’s important to review slow-moving product lines, why they aren’t selling and to cut them if necessary.
- Possible retrenchment of non-performing staff – This is a difficult scenario, but most companies can’t afford retaining staff that are not adding to the bottom line or performing as needed. There is a worldwide move towards leaner organisations and online outsourcing
- Liquidation of redundant stock -Instead of adding to the clutter in a store, redundant stock should be liquidated
- Reviewing price strategies – Pricing is an art, and oftentimes prices should be adjusted upwards and not downwards as pricing also signals quality to consumers.
- Examining procurement procedures – Do current suppliers deserve loyalty or could the organisation benefit from a review of suppliers or going the route of importing?
- Staff training and motivation – Staff development often falls by the wayside during tough times. A thorough review of current practices and resulting performance can go a long way towards uplifting service levels and ultimately, sales.
- Staff remuneration models and structure – In tandem with staff development, staff remuneration should be reviewed to ensure it’s market-related and achieving the desired results when it comes to incentives
- Marketing positioning and strategy – It’s easy to become “store-blind” when it comes to a marketing strategy, but the reality is that the market changes constantly and a different approach may be needed.
- Expansion plans – Geographic expansion requires careful consideration. Store sizes and micro locations in malls are important considerations in the current climate.
Due to the importance of this exercise Franchising Plus has developed an ‘Annual Review Matrix’ to assist you. Please contact us to arrange a meeting to discuss how this can benefit your business.