For many years, I have run my pool and spa business and my software company based on my own variation of the Balanced Scorecard strategic planning and management system. My version adds inventory to the other four components of my vision and strategy. I personally feel that inventory has a life of its own, is critical to operations, and warrants special attention.
Balancing the sectors of your operations is necessary to run profitably. You can’t manage your business by focusing only on the finances or the customers.
Embrace your employees and help them to experience personal growth so they are motivated and genuinely happy to come to work and help your customers. Provide ongoing training so they have a good feeling of confidence with the products and service you sell, and so they understand procedures. Help them help you to make it easier to do your job. They need to keep their place in the company by increasing profits every day and should be rewarded for good work. Immediately address employees with negative attitudes so that they don’t have an adverse effect on the rest of your staff.
Written job descriptions are important so that everyone understands your expectations. It is also an important legal factor with respect to human resources.
Have a good marketing plan to get customers in the store, a clean and well merchandised store, an inviting entrance and a greeting that makes a good first impression. Do your homework and price your products competitively and on perceived value. Plan your sales and events well in advance so that you can compensate for coupons and sale prices. The name of the game is to plan on how to get them to buy from you, and get them to buy more. Bring them back with a customer loyalty rewards program and for the knowledge that your staff processes.
It is important that every member of the company provides constant feedback to you on how your customers are reacting to your product selection, pricing, services, wait time at the counter, and absolutely everything that that they hear from your customers. Set up a system for to easily provide that feedback. We have our associates email anything and everything they hear……good and bad. Then, act on your reports right away. If there is a policy or procedure that needs changed, a customer that needs contacted, a new product that is requested, a price reduction (or add a coupon) or any other action to move toward improving customer service and increasing sales.
Make sure you have a procedure and a training program for handling hard to please and disgruntled customers.
Nobody is fond of rules, but we all need guidelines to make us efficient at work and at home. We must all have a sense of understanding of the guidelines and follow them. We need procedures to enable us to all work on the same level of understanding. If everyone in your company did things differently imagine how confusing it would get. This is a prime example of chaos. Chaos is something you need to eliminate with procedures because it causes an easy job to be more difficult, it can cause stress and most of all chaos cost’s the company money.
Create and implement procedures for opening the store, closing, sales, customer pick-ups, handling special orders, caring for display pools, and everything else that requires a process. Distribute your procedure manual and make it a part of your standard training. Then, make it everyone’s responsibility to learn the procedures. They should make them second nature – part of their day – part of their job. Expedite daily duties to maximize time and profits.
Most importantly, procedures help to efficiently and professionally handle customer’s needs and make sure each customer is 100% satisfied.
Inventory control is a key component in running a lean and profitable pool and spa business. You need to have the procedures in place to tighten logistics and manage cycle counts. Don’t fall victim to inaccuracies or be overrun with frustration when orders aren’t placed for needed stock, and the result is missed sales, surprising shortages and lost income. Implement strategies to increase accuracy and efficiency in inventory management.
Prepare for Inventory Control by defining your inventory handling processes. Involve the entire staff because they are all involved in inventory control. Organize your warehouses, trucks, parts bins and stores first for a more accurate cycle count. Start with an accurate inventory and then maintain it by putting everything through your POS system.
Cost check your inventory invoices to ensure that you are billed correctly and follow up on all discrepancies. Stay on top of returns and defects as they come in. Waiting until year end contributes to poor cash flow, clutter, mistakes and possible lost income.
Financial statements are a very important management tool. When correctly prepared and properly interpreted they provide the current financial picture of the company. It is a must that business owners fully understand how to read the financials. If you do not, consult your accountant and learn.
It is also important to share some of the financial information with the key members of your staff. They should understand the company’s income and expenses so that they can contribute to increasing revenue and decreasing costs.
Other key factors in watching the finances are controlling employee overtime, reducing mistakes and operating more efficient, Inventory control, wasting materials, wasted time, unauthorized sales discounts, and unnecessary service call trips. Brainstorm with your management team and devise a list of things that can save time and money and increase sales, then put them into practice.