Minimum Wage Issues Demand Maximum Judgment from Owners

The "ripple effects" of the Minimum Wage changes are affecting all retailers. The biggest question: not "What will this mean?", but "How will we address this in our operation?"

First issue, of course: WHEN will your business implement any changes? Well in advance of the laws? Or, coincident with the laws? 

Why does the timing matter? Because of the perception. Are you out in front of this issue? Or, seeming to lag behind?

Next big issue: IF the minimum wage (the "floor") of the pay scale in your business needs to be raised to comply with the laws, what effect will this have on the wages of your mid-management team?

  • Your current mid-management people may expect a separation between the minimum wages paid and their paychecks.
  • If the minimum wage increases cause you to increase the wages of your entry-level employees, might you also need to increase the pay of essentially ALL of your employees.
  • The bigger ripple effect may be how other employers in your community handle these first two issues. That is, are you remaining competitive for attracting and retaining the best people?

There are no right or wrong answers here. Every retailer must evaluate this, and determine what is appropriate for their business.

And, of course, that analysis must include how you will be able to pay for any changes in payroll.

  • Increase prices for your customers?
  • Reduce expenses in other-than-payroll areas?
  • Expect more productivity from employees?
  • Introduce other forms of compensation, such as more flexible scheduling, more paid time off, etc?

Again, there is no one-size-fits-all answer. But, we sure encourage all retailers to ponder this issue, and to examine all of your options.

Get Out in Front of This Issue!

As we all know, good people are very hard to find. How you choose to compensate - and therefore motivate and retain - your key staff is a key factor in the on-going viability of your business. We urge you to get out in front of this issue!

Want more ideas? Check out this thoughtful article from The Library for Owners at The Retail Owners Institute®: Beyond the Paycheck: Motivate Employees with Creative Compensation.

Get Ready for "Multi-Generational Retailing"

You've heard it. The "conventional wisdom" that suggests that retailers should move away from the Baby Boomers, and retool their operations to appeal to the Millennial Generation – those "digital natives" who now are 18-35 years old.

Hmm. Follow that conventional wisdom at your own peril! Instead, we believe retailers should focus on making their stores MULTI-GENERATIONAL. After all, each group is ± 80 million people, totaling about half the U.S. population. 

You don't have to choose one group at the expense of the other. Cater to both of these major market segments. Yes, simultaneously! (Just not the same!)

  • Do NOT ignore or marginalize the Baby Boomers as being in their "sunset years".
  • Show the Millennials the respect they deserve.

"One size fits all" does not apply! 

By strategically and pro-actively managing your operation to be Multi-Generational, you can – and must! – treat the Baby Boomers and the Millennials the way each group most wants to be treated. 

  • Baby Boomers have always done things their way, and show no signs of changing now. More so than prior generations, they are healthy, active, traveling, engaging in causes, participating in their communities – and yes, spending on themselves and their families. They are internet savvy, but still do "recreational shopping".
  • Meanwhile, the Millennials are a market not to be ignored. While they may not fit the conventional definitions of "families", they are forming households, having children, commuting to jobs, going places and doing things. They are discerning shoppers, and will "put their money where their mouth is". There are causes they care about, and will mirror that in their shopping choices. Their "comparative shopping" is done online, and they are very purposeful when it comes to purchasing. They will not linger!

Retailers must think strategically about your unique competitive advantages. Then, update them to cater to EACH of these important market segments, on parallel tracks.

It's called "multi-tasking", and you can do it!

Retailers: Being Unfair to Your Accountant?

Are you still counting on your bookkeeper or your accountant to let you know which months you are going to be short of cash? 

Actually, that is terribly unfair to them!

  • Remember, bookkeepers and accountants are trained historians. They can tell you to the penny what happened in the past.
  • But, to expect them to give you advance warning of the ups and downs of your cash flow is not only outside their comfort zone, it is not their responsibility! That is the owner's responsibility.

Which is exactly why The Retail Owners Institute has built so many online projecting calculators for retailers. 

And our (free!) SPEEDY HEADLIGHTS makes quick work of knowing in advance what your monthly cash surplus - or shortfall - would be! 

Do yourself - and your accountant - a big favor. Take a few minutes to see where your business is headed. (Remember, if you don't like what it shows, you can play "what if...?"  All privately, on your own.)

Priced Right for Retailers: FREE!

 Go here | More info | Free access

That Springtime State of Mind!

Did Your Stores Get the Memo? 

This weekend marked the official arrival of Spring.

No, we're not talking just about the weather. Spring is really a state of mind! And that of course means it is a wonderful opportunity for retailers.

  • No matter what merchandise you sell - whether it's tires, apparel, books, housewares, office supplies, whatever - every retailer is in the fashion business.
  • And that means that your customers are wanting what is new and fresh. You know; "in fashion"! 

How to bring that Springtime State of Mind to your stores? 

It's easier than you think. And can be quite energizing for your staff as well as your shoppers!

  • Tweak your displays. Feature merchandise with lighter/brighter colors. 
  • Change the soundtrack. Lighter/brighter works here as well. 
  • Wash the windows! Wash away that winter grime. A little sparkle and shine goes a long way. 
  • Check the lights. Make sure none of them are out. Get rid of any dark corners. And by all means, insure that all spotlights actually shine onto merchandise, not that spot on the floor where the display used to be....
  • Remember your staff. Maybe it's time for a Spring Fever treat for them. Whatever it takes to make sure they, like your customers, have that Springtime State of Mind. It's contagious!

Quick Insights from Key Retail Benchmarks

Powerful Perspective • For and About Retailers

Whether you are a retailer, or you work with retailers, The Retail Owners Institute makes it easy for you to get a quick financial health assessment


Go to the Benchmarks page on The ROI site, and choose any one of the 53 retail segments listed. When that page opens, immediately see 5-Year Trend Charts of these 6 key ratios (out of more than 40) that The ROI has identified for retailers to regularly monitor

  • Pre-Tax Profit
  • Gross Margin
  • Inventory Turnover
  • Debt-to-Worth Ratio
  • Current Ratio
  • GMROI
These Benchmark Charts, available only from The ROI, offer a snapshot view of the financial viability of each retail sector.

Compare and Contrast Several Segments

Now, look at some more retail segments. (Use the Benchmarks menu bar tabs at the top of each page.) Fascinating, isn't it? 

Quickly compare and contrast different types of retailers; gain insightful perspective. 

Want to Know How Your Stores Compare? 

Of course you do!

See the "Do Your Own Ratios" tab? Click on that tab from any of the Benchmarks Segments pages, and use The ROI's KEY RATIOS Calculator. (Yep, that's free too.)

  • Just enter a few numbers from your financial statement. Immediately - and automagically! - see all of your Key Ratios. 
  • Use the built-in comps from 53 retail segments to compare your results to the median-performing retailers in your segment.

Available Only at The ROI

The Retail Owners Institute® makes these Benchmarks charts and the KEY RATIOS Calculator available online, anytime, 24/7, for free. Be sure to take advantage of this information!

Thinking of Raising Wages? How About Raising Standards?

"The increases in the minimum wage will cause a ripple effect, increasing the expectations of all employees for pay increases." Or so goes a common line of thinking. 

This can prompt independent retailers to worry:
  • How much will we have to increase prices in order to pay our staff more? 
  • Where is that money going to come from? 
  • What will we have to cut in order to pay more? 
Or, is there another way to think about this? How about raising standards and expectations to better match with the wages paid?  (You know, the "You get what you pay for" model.) 

Here's how to start:
  • First, revisit your job descriptions. This is the first opportunity to raise standards. Make sure they reflect the performance you now expect from each position. 
  • Consider delegating much of the initial data-gathering and drafting of job descriptions to someone else in your organization (especially a younger someone else!) Their energy and fresh perspective could be very valuable.
  • Then, having clarified the job descriptions and performance expectations, establish an appropriate pay range for each job.
  • Finally, make sure your employees each understand the new responsibilities, and the heightened expectations, of the positions in your stores. In fact, some owners have current employees essentially apply and compete for those higher-paying jobs.
For more ideas, and a process for doing this, read "Beyond the Paycheck: Motivate Employees with Creative Compensation", in the Library for Owners at The Retail Owners Institute®

It walks you through the entire process (including finding out what matters to your employees!

For most specialty retailers, your staff IS your competitive advantage. Use your compensation plan as another strategic tool to:
  1. reduce employee turnover;
  2. save expenses of recruiting, hiring, and training of new staff;
  3. and most important, maintain customer satisfaction and loyalty.

Something for All Growth-Minded Retailers

Retail "startups" are not limited to that new little shop down the street. Instead, a simultaneous multi-store launch is a "retail startup". So too is opening additional locations in new geographic markets. Maybe a temporary "pop up shop" to test a new retail concept. Or the launch of a robust e-commerce site. Or, manufacturers that decide to launch their own chain of stores as a way to grow their brand.

RetailStartup.com, a division of The Retail Owners Institute®
In 2009, The Retail Owners Institute® launched a specialized website, called Retail Startup, to address growth and expansion issues specific to retailers. 

It includes our commentary on each of the 3 different stages of development of a retail business.


But principally, it is a clearinghouse for growth-minded retailers. Out of all the resources on the web for startup businesses (those so-called "small businesses"), we have "curated" those links to find the ones most useful to retail startups. 

  • Retail Management Resources
  • Retail Operations Resources
  • Information for Retail Growth Management
  • "Small Business" Resources
  • "Shop Local" Initiative
  • Key Retail Financial Benchmarks, 53 Retail Segments

No matter which stage of growth and expansion you're in, you'll likely find some useful resources. Check it out for yourself. Just go to RetailStartup.com.

Retailers: Is Now the Time to Sell?


It's that time of year.  Retail owners are asking themselves, 
  • "So, shall I really keep doing this? Do I want to sign more leases? Guarantee more loans?"
  • "Or, while I still have my health, is now the time to sell?"
When pressed, many owners confide, "I plan to sell the business in 5 years or so." (And yes, there are owners who have been saying that each year for the past few years. It's the rolling 5-year exit plan!)

Whether or not this year is the time for you to sell, we believe that every year is the time for owners to investigate their options. 

To help get you started, The Retail Owners Institute has developed a specialized free microsite called Sell My Store, Please!  There you'll find some tips that are practical, or thought-provoking, or maybe even inspiring. 

We encourage you to be pro-active about your own exit strategy. 

There are 3 kinds of owners out there; which one do you want to be?
  1. Owners who make things happen.
  2. Owners who watch things happen.
  3. Owners who say, "Uh...what happened?!?"

Smarter Expense Control for Retailers (and It's FREE!)

Want to get a better handle on expense control? But find that your eyes glaze over whenever you look at your P&L?

You are not alone! The typical Profit & Loss statement lists expenses in alphabetical order! Excrutiating line item detail. Ugh!

How to deal with that? And, more important, how to effectively manage, monitor and control your expenses? 

Meet The Retail Owners Institute's online SPEEDY Expense Analyzer.

The SPEEDY Expense Analyzer is perfect for every retailer's analyzing, forecasting, or "what if...?" planning. You easily enter in your line item expenses; SPEEDY automagically sorts them into 5 meaningful categories. (The ROI's technical term is "buckets".) 

See how quickly you can discover those profits that are hiding in plain sight

Sort your P&L's line-item expenses into 5 "buckets" 
Grab your P&L and go take a look. (Yes, it's free.) See what SPEEDY can reveal about your business!