Retail Owners: Where’s Your Job Description?

What is the most overlooked and under-performed job in retailing today?  Being the Owner!  Owners have responsibilities that are separate and distinct from any other job in retailing. 

Winston Churchill once said, “Some are born great.  Some achieve greatness.  And some have greatness thrust upon them.”  

And so it is with business ownership: some are born to it; others achieve it; still others have it thrust upon them.

Whatever their route to retail ownership, few recognize – or appreciate – that being the owner is its own job, separate and distinct from any other job in retailing.  Yet why is it that the Owner is usually the only person in a retail operation without a job description? (And therefore, not subject to a performance review?!)

Whether the “Owner” is one person (perhaps the founder); several people (perhaps family members, business partners, even investors); or, as in the case of a corporation, represented by the Board of Directors, the job of the “Owner” is the most under-performed and overlooked job in retailing today!  

Indeed, The ROI believes that failures in retail are traceable not to weak management, nor to weak CEOs.  Instead, most retail failures can be traced directly to bad ownership.

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Three Levels of Responsibilities • Owner-Only Responsibilities • President & Management Responsibilities

©Copyright 1999-2014.  The Retail Owners Institute®.  All rights reserved.

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Which Bank for You?
Which Bank for You?

Bankers - Where Are They When You Need Them?

Most retailers are constantly in and out of the debt market to finance daily operations.  Having a reliable lender is vital to your success.  Recognize that your banker - the "relationship manager" - is in fact a salesperson; the actual credit decision will be made by "the loan committee".

Your responsibility is to arm your banker to effectively present your request to the Loan Committee.  And that demands that you "speak their language". Especially in today's economy, the need to speak "Conversational Banker-ese" is greater than ever.

Plus, consider carefully the pro's and cons of different types of financial partner you might approach. Let's start with an overview. 

  Advantages Disadvantages
  • Stability
  • Array of financial services
  • Many to choose from
  • Competitive pricing
  • Lack of retail industry experience or focus
  • Often slow to respond; impersonal
  • Less interested in smaller transactions
  • Generally available only to profitable companies
Private Equity Funds
  • Provide "hands on" value/added expertise
  • Generally well-capitalized
  • May provide access to industry and management expertise
  • Provide "hands on" value/added expertise (Yes, it's the good news/bad news thing!)
  • Strict investment criteria
  • Equity ownership required
  • Required returns often 25% +
  • Require track record of a proven concept
Asset-Based Lenders
  • Nontraditional transactions
  • Fewer financial covenants
  • Industry focused
  • Rigid documentation standards
  • Higher transaction costs
  • Onerous reporting
  • Traditionally perceived as lending only to troubled companies

The Institute's Owner's Dashboard
The Institute's Owner's Dashboard

Focus on Your Financial Strength 

Use The Institute's Owner's Dashboard Trend Form to track your progress. It's a simple - yet powerful! - three-step process:

Step 1: Enter LY results for five key ratios

Step 2: Enter This Year's Targets

Step 3: Each month (no later than the 10th of the month!) enter YTD results

Immediately see whether - and if so, where - you need to make adjustments now to achieve the results you want. "Lead time" is one of your most valuable assets.  Use our Owner's Dashboard Trend Form  to put time on your side.

(Need more info on these ratios, how to calculate them, and what they mean?  See the Retail Finance Basics section here at The ROI.  And, view this online webcast from The ROI Co-Founders for more about the Owner's Dashboard. Click here to download and printout your own master copy of the Owner's Dashboard Trend Form)

Copyright 1999–2014 by The Retail Owners Institute® and Outcalt & Johnson: Retail Strategists, LLC