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Retailing 107: Plan Your Year

The time you spend working on your business could be the most valuable you’ll spend all year.

Mention creating an annual business plan and most small to mid-size specialty retailers will roll their eyes and move on to the next subject as quickly as possible…because they misunderstand what is really involved. But more importantly, they don’t understand the huge benefit to their business of spending quality time working on their business.

As you begin the New Year and specialty tennis selling season, it is the perfect time to focus about five working days, or about 1 percent of your year, on your Annual 2012 Business Plan and a companion “planning” calendar. These five days spent working on your business could prove to be the most valuable time you will spend all year — providing you with a huge return on investment!

Projected Revenue & Costs

Start with laying out your financial projections by week and by month for sales revenue by both department and category. Follow that with your projected cost of doing business, including all expenses and overhead. For the sales revenue portion of your plan, forecast your sales by category for small merchandise items and by SKU for large merchandise items, including your planned retail selling prices and landed cost of goods.

Use your actual revenue and total cost of doing business from the immediate past year. If available, use the last three to five years of actual store performance as a guide, and make all of your projected changes, including increases, off of this base. Take into account any major events in your businesses past history, like the recession, and list the assumptions you are making about your projections for the coming year

Next, you should use the TIA Cost of Doing Business report to benchmark your projections for your business. This will result in the annual budget spreadsheet you create having a minimum of five columns, including:

• 2012 Budget
• 2011 Actual
• TIA Cost of Doing Business Benchmark
• Dollar variance from 2012 Budget
• Percent variance from 2012 Budget

This will give you a quick reference as to how your current year budget is performing, above or below your plan and compared to the previous year, and the TIA CODB benchmark.

Create a Planning Calendar

In working on your marketing expenses, you should also start a companion planning calendar to go with your business plan. Lay out your calendar by no less than every week to capture all the detail. As you plan sales, promotions and both in-store and out-of-store community events, post them on your calendar. You can also use your calendar to plan and budget staffing based on both seasonality and the sales and promotional activities you are planning.

The purpose of an annual business plan and planning calendar is, essentially, re-planning! No plan survives first engagement … and most small specialty retailers miss the point that a plan is nothing by itself, but the ability to re-plan and control the direction of the retail business is a huge benefit — and that’s the real purpose of the planning process.

To make sure you are re-planning in a timely manner that assures you will be able to make the necessary corrections, both positive and negative, to keep your business on the course of your annual plan, make sure you are receiving and reviewing an overview of your plan against actual performance on a weekly, or at the most semi-weekly, basis.

Coming Up

Top customer service tips using technology.

For more details on developing your own annual business plan with the essential companion planning calendar, visit TennisIndustry.org/Webinars and download for free the January 10 TIA webinar on Annual Planning. (While there, also check out the other webinars available for free download, along with the schedule of retail webinars for 2012.)

This is part of a series of retail tips presented by the Tennis Industry Association and written by the Gluskin Townley Group (gluskintownleygroup.com).

From the February 2012 issue
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