FEBRUARY 3, 2010

Do You Know How Your Store Measures Up?

The ROI site displays key retail performance benchmark data for 52 separate retail segments, from hardware stores to bookstores, to clothing stores, gift shops, wine stores, music stores, furniture stores, tire dealers, and more. 

On each of these 52 Segment Pages, The ROI presents an Owners Dashboard of six key ratios that we have selected as particularly important for retailers to monitor.

• Debt-to-Worth Ratio
• Current Ratio
• Return on Assets
• Profit before Taxes
• Inventory Turnover
• Gross Margin Percent

In addition, The ROI has charted and graphed the five-year trends of these six key performance metrics for independent retailers.

Why does this matter?  First, having perspective on how your business is doing versus others like it is beneficial.  Second, you may want to use the benchmarks as targets for your 2010 year. Third, maybe most significant, all banks use these same benchmark numbers when you are asking for a loan. 

Start on the Store Benchmarks page to link to your segment's page on The ROI site. How do you compare?

Need some reminders on how to calculate these ratios for your own business? Or what they mean?  That too is available for you on The ROI site, in the Use Financial Tools section.

ROI Members can use the Key Ratios Calculator in the Members-Only Collection to find how your store is doing.

Wondering Whether to Add That Employee? Here's How to Decide

Lots of talk in the news these days about the need for more jobs, in order to work our way out of the Recession. After nearly two years of cost reductions, and in many instances, layoffs of long-time employees, the tendency among many retailers is to think of added jobs solely as an added expense. 

If this sounds like you, The ROI encourages you to re-visit that thinking. And, we have a quick 5-step process to help you make a sound business decision.

The key is this: owners must insist that adding an employee must result in more productivity - i.e., more sales, fewer expenses, or both! - and thus more profitability for your business. 

If the additional employee cannot "pencil out" on this basis, your decision may be much more clear.

Retail Business Insight from The ROI
You wouldn't drive down the freeway at night with your headlights out, would you?  No, of course not.  But there are some retailers who are "driving" their stores that way.

The ROI's goal: Enable ALL retailers to "Turn on your financial headlights!"

Have You Seen the Retail Startup Site? There's much information out there for "small businesses" and "small business startups", but there's very little specifically about retail. 

The ROI has launched a companion site. It's called Retail Startup (see www.RetailStartup.com). A one-stop shop for online and/or storefront retailers, it is dedicated to all who have the vision of owning retail stores.  

The goal of Retail Startup is to help aspiring retailers to realize their dream. Faster. Better. Smarter.

Please go check it out, and then let us know what you think. What else should it have? Would you refer would-be retailers there? We would appreciate your reactions.

The ROI's Blog Re-Inventing Retail

Check out The ROI's blog. See the latest comments from The ROI's Co-Founders. (Hint: You will find some challenging viewpoints for bankers on lending to retailers.) Join the discussions today! Re-Inventing Retail.

Even More Ways to Join the Dialog
The Co-Founders of The ROI are also available now on Twitter.  Please follow us and add to those conversations!

What? You're Not an ROI Member?

Joining The ROI could be the best - and least expensive! - insurance policy you ever took out. Just $24.95 per month gives you unlimited access to the entire ROI site - including all parts of the Members-Only Collection.  Available nowhere else.  Find out more.  Take The ROI's online Site Tour.  Remember, 2/3rds of the content at The ROI is available to Members Only.  Specialized Retail Business Calculators. Online, self-paced Financial Basics Seminar. ROI Guides. Glossary of Retail Financial Terms. Podcasts. And much more. Start now!

It's time to team up with The ROI to train your retailers on "the business of retail".  Outsource the training and support on financial fundamentals to The ROI experts. Focus your internal resources on your industry-specific issues.  (Now that's good resource management!)  Best of all, have an immediate impact with your retailers, just when they need it the most. Find our more.

About The Retail Owners Institute®

The ROI is a round-the-clock business training resource for independent retailers. The Retail Owners Institute – www.RetailOwner.com - offers extensive, practical self-help, training, and resources for controlling inventory, cash flow, margins, markdowns, turnover, and more.  Plus much more for ROI members. Visit The ROI today. By retailers, for retailers.  Available nowhere else.