Business Tips December 2011

Planning 2012


I talk a lot about the importance of planning to the independent retailer.


Right now you should be starting the planning process for the first six months of next year.

Planning your sales , stock levels and open to buy for 2012 is extremely important to your success in the coming year.


Your plan should also include your planned purchases for the CHA Show in January 2012.

Whether you're attending the Show, and I urge you to do so, or will be ordering from your Rep before or after the Show, you want to be able to take advantage of the Show specials that will be offered. Having your open to buy dollars allocated to your CHA purchases will simplify this process.

I always recommend that you plan enough dollars in January and February to allow you to make the CHA purchases you want to. You probably will have to hold off on ordering in March and April, but it's important to plan enough open to buy for the CHA Show in January.


To make an accurate sales plan for 2012 you need to know what sales you had by month in 2011. This is always the starting point in planning sales. If your sales trend is 10% ahead then plan at least 10% more sales by month in 2012. If you're trending down 10% I'd suggest planning your sales even at best for 2012. You want to be optimistic but realistic in planning sales.


You'll also need your inventory on hand number AT RETAIL. Whether you use a physical inventory or are calcullating your stock on hand by month, you want a very accurate dollar number for your beginning of the month of January 2012 . That way you can plan your purchases for the first six months of the year using your desired turnover rate as a guide.


I've been recommending planning for a turnover rate of 3 turns a year. That's a really good turnover rate for an independent retailer. But, after working with a few retailers in 2011, I feel that a turnover rate of 2 is more realistic as a goal.


Those of you who have been following my business tips know that turnover is simply the number of times in a year you sell( or turn) your average beginning of the month stock level at retail.

For example.. If your planned yearly sales are planned to be $200,000 and you are planning to have a turnover rate of 2 turns a year, then your average beggining of the month stock at retail needs to be $100,000 each month.


Let me mention that I can help you with your planning and implementation in 2012 through my consulting business.

Please take a look at my website http://www.sandywoodford.com/ for more information on my consulting services for the independent retailer. Click on the tab"For The Retailer" and it will tell you what you want to know.

Please email me at sandman@mindspring.com or phone me at 770-973-3503 to discuss how I can be of service to you and your business.


Wishing you a Happy Holiday Season and a successful 2012


Sandy