“On the advice of some other retailers we have been using (Management One®) service for the last six months and it’s actually going very well. (My consultant) does a great job of producing a monthly OTB planning matrix by Dept/Class and then he meets with my buyers for about an hour once a month. He is also a wealth of retail knowledge and we learn a lot from him about other aspects of retail too. At the moment he is helping me improve the way we classify some of our inventory. I’d honestly say we (have received) a return of 400 or 500% on the money we’ve spent with him already…and that looks to improve going forward.”
Mikke Pierson Owner
Barbie K
Los Angeles
Hi Shelly!
I meet with Alan formally once a month. I did the same for years when I was with (competitor to Management One®). About 4-5 months ago Alan approached me with a proposal from his company. I was going to sever my relationship with (competitor to Management One®) just because I felt I wasn't really getting as much as I should from their service (around $450 a month). I hadn't intended to pick up any outside support after dropping (competitor to Management One®). However, I liked what Alan had to say, and I told him I would try HIS service at least for a trial period.
As I suspected, the "value added" benefits of working with Alan have been many. He's "local" and has been INCREDIBLE at helping purchase several new computers, setting them up for us, working out ENDLESS software bugs, etc. We use (competitor to Management One®)' s CHARTER program for our POS. (One of my worst decisions--should have gone with Retail Pro as (competitor to Management One®) abandoned their system--so it is effectively "dead" with absolutely no upgrades planned.) At any rate, Alan takes a very serious and personal involvement in helping me stretch to meet significantly higher goals. (And, low and behold, we've met or EXCEEDED them!!) He's made countless suggestions on marketing (one: giving away Barbie K. "Boo!" Bucks at our downtown safe trick or treat nite... He's made suggestions on my copy for invitations and fliers, encouraged me to advertise more, to reach out to customers who haven't been in for a long time, and suggested countless events, ideas, etc.
Recently we've been discussing ways for me to better focus on manufacturers and items that are REALLY driving my business. We intend to create a number of different classes and subclasses. We discuss markdowns for all categories (are they acceptable, etc.), GRMOI data, turn rates...
All in all, I'm extremely impressed with Alan's genuine interest in my business. He really has gone way above and beyond what I initially expected from his service. As I mentioned, I originally suspected I would garner more from a relationship with him vs. (competitor to Management One®), but quite frankly Alan has completely exceeded my expectations.
You guys might want to at least give him a chance to chat with you. Obviously you know what your needs are, but I think he's helped Barbie K. a lot.
Let me know if I can help any further!
Barbie Falconer Owner
Summit Hut
Tucson, Arizona
Jim,
We have scheduled our Steering Team meeting on Tuesday at 2pm for that week. Please do join us if you can; we would enjoy seeing you there very much.
The Wetmore store is doing well. We wanted to drive annual growth to around the +25% range, and since the Charter Team work we’ve seen good results: the average growth rate for each month has been 20%. As an example, growth in April was 23% ahead of April a year ago. Prior to the charter work, our average growth rate had been an anemic 6%.
We have created several charters to bring payroll under control. This has worked very well indeed. The target I set for payroll was 16% of sales (not including payroll taxes, health, etc). Recently that payroll number had been drifting steadily upwards, hitting an all time high of 17.7% of trailing 12 month sales a few months ago.
The charter work started to take root about six weeks ago, and since then payroll has come down to 17.5% for the trailing 12 months, is still dropping, and has actually been between 15% and 16% of the sales over the six weeks. This is great! Too many changes to mention have been implemented through this work, but the bottom line is I am very confident that we will now gain firm control of payroll.
The buying department is working a charter around two issues: inventory turns and profit margin. Even before they finished their initial reports, we started to see improvements in both areas, especially turns. My turns target is 3.0, last month we came in at 2.9. The inventory is healthier than it has ever been. Especially significant is that the “sale tunnel” load is steadily shrinking as a result of various charter-inspired efforts. We had reached the unhappy point where the standing value in the sale tunnel had been hovering around $300k – today it is $237k and continues to drop about $2k a week. The buyers are implementing changes that will definitely result in fewer inventory going into the tunnel at the end of the selling season. It looks to me like the inventory will be in very good shape a year from now. An all the while margins have actually been a little higher than has been the case for the past few years.
The charter concept is working very well. Without exception every charter we’ve implemented has produced a positive outcome, and among the staff at large there has been complete buy-in to this way of problem solving. Most everyone now hopes they get to participate in a charter.
At the moment we are taking a bit of breather as far as chartering new teams go. We are finishing up work with two teams and still trying to consolidate the work started by a few others. I’d guess that in the next eight weeks or so, we’ll be going back to the Key Measurables to find direction on what to look at next.
Looking forward to seeing you,
Dave Baker
Owner
Martin Fahy Menswear
Loughrea, Ireland
The Management One process has re-invigorated my business, my approach to it and my staff. Working with this system and with the Management One people and affiliate has been a happy experience and has yielded strong double digit growth in revenues in its first year.
I find it good for giving me direction and I appreciate having someone with which to discuss my problems, strategies and actions. Overall it gives a nice blend of retail savvy and statistical analysis which I have found to be very effective.
Tom Fahy
Owner
ZJ Boarding House
Los Angeles, California
Hey Alan,
Just a quick, but heart felt, thank you for all your efforts working with our company and crew recently. We truly are students of life (and business) and have already learned a great deal from you, so thank you. I know that our overall communication with you isn’t always a two-street as you may like, but just know that we are all dedicated to improving this business, its profitability, and longevity. And we can definitely make headway in the right direction with the help, experience, & expertise from qualified people like you.
We have a very young crew (along with some elders) but we all want to learn more about running a company…and have fun while doing it. Please continue to be patient with us along the way and we’ll promise to meet you half way. We really believe in improving our OTB, and with your continued help we will succeed down the road. Anyway, just wanted to say thanks on behalf of the entire ZJBH crew.
Rich Rubincam
General Manager
Executive Clothiers
Chicago, Illinios
“…I also believe Management One®’s greatest strength is not the tangibles you offer (i.e. planning, training etc.). It's the intangibles like the support and understanding on where my business is going.”
Ollie Galam
President
Shaia's
Birmingham, Alabama
“We have had one of the best accounting firms in the country yet we get a better financial picture of our business with Management One®.”
J L Shaia
Owner
My Favorite Toy Store
Chicago, Illinois
“Connie ...
We have worked with Cathy Wagner for a number of years ... and continue to use her input and advice.
I believe her best contribution has been to help us look at our business the right way ... we now have 'classes' of product that are meaningful, yet not so granular as to weigh down the analysis of data for the decision making process.
Cathy has years of practical retail experience and can say "that's a waste of time" or "this will get results" ... and, invariably, she's right on the money ... literally.
She makes for a great cheerleader ... and can criticize us while smiling ... we like her.
Any more questions ... feel free to ask ... Mike
.”
Mike
President
Razorz Edge Tucson, AZ
“To Whom It May Concern:
This letter is to thank the City of Tucson for the services of Management One and Neil Norton. We would also like to share a little with you about our experience.
We are Razorz Edge, a clothing store on 4th Ave. We have been open for one year. Neil has taken care of us since the very beginning. He has helped us develop class categories, analyze our inventory, and help us budget our spending per department. We truly believe he has been instrumental in the success we have had this past year. With the construction and closure of the underpass it is undeterminable how difficult it could have been our first year without his help and guidance. Other 4th Ave merchants have complained about 20% decrease in business since the closure. Neil has also taught us some industry terms and standards we were not aware of.
We are truly grateful for this service the City has so graciously provided for us. We feel it a valuable tool that would help us stay afloat in these difficult times. We thank you in advance for the continuation of this service.
Sincerely,
Rachel Balls
Lauren Baker ”
Rachel Balls
Lauren Baker
Owners of Razorz Edge
Service Testimonials
James Zwilling
Tucson, Arizona
Inside Tucson Business
When Michael and Karyn Veres purchased their restaurant, Cibaria Cucina Italiana at 12985 N. Oracle Road, they didn’t know much about running a business.
“We’d had a small business before,” Karyn Veres said, “but never one where we managed employees or had a dynamic like a restaurant. We spent the first year getting a grip on spending and trimming what we thought we could. Then, we reached a point where we thought we had done all we knew how to do.”
Evan Wise, a managing director for Management One, a network of consulting affiliates that began in Chicago in 1990 and is now based in Tucson, said many business owners simply outgrow their own capabilities.
“A lot of companies start out as entrepreneurial organizations,” Wise said. “As the concept starts to grow, it reaches a point where the entrepreneur can’t make all the decisions.”
That’s where companies like Management One can come in to help companies organize and plan for their futures.
Wise’s company provides consulting services to small and mid-size businesses and, according to Wise, takes a three-prong approach to business planning.
First, consultants sit down with company leaders to come up with a simple one-page strategy. “About 80 percent of our clients don’t have a strategy,” Wise said. “The other 20 percent have a strategy, but if you ask the receptionist what it is, they’ll look back at you with a blank face.”
That’s a problem that many companies overlook. “You need to have open lines of communication with all your employees,” he said. “You need to articulate goals to everyone.”
The second part of working with Wise’s group involves organization of leadership.
This, Wise said, is how companies determine who will take on and administer those roles and who will become decision-makers within the areas where the entrepreneur needs help.
After that second step, the consultants work with the company leaders and employees on more specific tasks.
Wise said his company looks at more than 25 skill areas that companies can pick and choose from to concentrate on. These can include anything from answering phones to negotiating skills.
How quickly do companies see results?
“We saw some things immediately,” Karyn Veres said, “like the way that we talk to customers. And other things like getting a better hand on the financials took a little longer.”
Wise said this is pretty typical.
“Some results clients see right away,” he said. “Other things, though, especially in retail-type environments, take a little longer.”
Veres said she and her husband inquired about Management One’s services after meeting Wise and his business partner, Marc Weiss, in Cibaria.
Wise said one reason many companies are reluctant to hire consultants is because the variety available makes it hard for people in business to feel confident about finding a good one.
“It’s not necessarily a stereotype,” he said. “There are many people out there who have left professional jobs for whatever reason and now label themselves as consultants. You don’t know what you’re going to get from those folks a lot of the time.”
Wise advises business owners to ask questions when they are looking at bringing on a consultant and to get advice from people they know.
“Look at other business owners like yourself,” he said. “Ask around to like-minded businesses and don’t be afraid to ask consultants to show you some of their results.”
Jerry Sonenblick, president and chief executive officer of Desert Angels, a non-profit group that brings together businesses and potential investors, said looking for a good consultant is like looking for a good doctor.
“You have to turn to people you rely on and trust,” Sonenblick said. “Then look at their recent success.”
Veres said they wouldn’t have known where to begin in hiring an accountant if they hadn’t met Management One’s directors.
“My best advice for other business owners is to feel comfortable,” she said. “You have to have trust and confidence. That’s what we have with Management One, and it’s turned out to be a great opportunity for us.”
Sonenblick said consultants offer valuable assistance to a variety of businesses.
“Different businesses are at different stages,” he said. “You may have been able to handle things at one stage, but you need help at another stage.” He adds that it’s important for companies “to evaluate often whether they are primarily in line with their long-term plan. They need to recognize weaknesses and fill the gaps.”
Wise said his consultants usually work on three-year plans but that those plans are reviewed every six months.
“So every time we look at a plan,” he says, “we have thought it out for the three years from that point.”
Wise said it’s harder to go much further than that because of the unpredictability of business.
By James Zwilling -
Inside Tucson Business
Retail Success Stories
Men’s Retailer
A Detroit men’s store was being planned below break even by a competitor. What we found when we went into the store was that the owner was a very creative and an excellent retailer. His people were trying to take his lead and implement his ideas but were just getting frustrated in trying to keep up. By the time we got there he was down on his help and the help was frustrated with him. We implemented W@R and W@B. W@B gave his staff and the owner a process to control the creation AND implementation of ideas.
The result was an increase in profit of 51% which represented a return back to the business of $21 in the first year for every dollar invested in W@R and W@B. The MMU increased by 5.6% due to a decrease in markdowns from 32.9% to 13.7%. After the first year and a half, the revenues had increased $400,000 above the merchandise plan developed by the competitor.
This Owner and staff meet regularly to solve problems, identify opportunities and work together to grow their business.
Department store
A department store owner was using W@R but was then faced with the opening of a new mall a few miles away. The owner was putting plans together and doing analysis but was stymied by the options and potential negative effect on the business. Prior to W@B the accepted estimate was a 25% drop in revenue once the mall opened in 9 months. The owner opted to start W@B and the steering team was formed and trained. After 5 months the owner had negotiated a space in the mall and had hired a consultant to get the best deal possible. We suggested turning the final decision over the steering team for analysis. In 2 hours of using the problem solving process from W@B the team came back with a recommendation. They called for only going into the mall if they could get a better spot by the anchor instead of in a back dead end. They also called for a significant drop in the rent, an out clause and a drop in CAM. They said if the store could not get these concessions there were other options that made more sense. The consultant took these to the mall developer and all were accepted except the CAM reduction. Net saving was $350,000 over the first 3 years to the out clause would occur. In addition, the team developed a Mall Defense team at the store. One promotion was so successful that a guard was placed outside to only let shoppers into the store when an equal number left. The store was packed. The bottom line was that the 25% decline in business when the mall opened was mitigated to only a 10% initial drop.
Men’s Store
This Men’s store in Tennessee was doing several million dollars in revenue but initial analysis determined that the profit generated was all from Tux rentals. The rest of the operation was break even. W@R was implemented first with W@B implemented later to give the owner more management guidance and support. W@B identified key issues with employees and the process served to move those that were not committed to the business to leave. The owner became more adept at using information to solve problems as well.
The result was an increase in MMU of 4.5% with a sales increase of 7.8%. A markdown strategy was developed and key classifications were marked down to clear out goods to open the classification for greater growth. The staff was more attuned to generating and using metrics to make the right decisions for the business and the overall quality of the staff was improved. Problems were solved and merchandising improved so that the operation was successful. Profits paid for a complete remodel of the store!
Women’s Store
This upscale women’s fashion retailer in Chicago was faced with a change in her personal situation. The retirement of her partner meant he was able to travel and wanted her with him. She chose to implement W@B to allow her to manage her business without the requirement that she be constantly in the store. We set up a steering team to take the direction the owner set and identify the problems, opportunities and disconnects that the direction presented. They then chartered teams to start working on the right issues.
The result is that business has increased and the owner is able to travel the world. After 2 years the store started fall in revenue. The owner identified that the steering team had begun to drift from W@B and implemented the W@B fundamentals again. Revenues came back!
Women’s store
A women’s Boutique implemented W@B and decided that the first team chartered would be a holiday planning team. This was always a problem for the owner since after many years in business it was always difficult to come up with a new and interesting idea to generate business and create the right atmosphere for the Christmas season. The team went to work and in two weeks at the middle of October they presented 75 new and different ideas to the steering team. The steering team asked them to go back and rank their ideas, which they did. The steering team took their top 10 ideas, chartered the same team to now implement the top idea and reserved the next nine to cover the next decade. Christmas was a smashing success!
Gift Store
This gift store operation is a family held business with 2 locations. The year prior to working with W@B and W@R, the company was short $249,492 in cash owed to the bank. Using the M1 processes to manage inventory, identify trends, develop a strategy and show their management team how to work together to solve problems and create meaningful change, they improved the business to a positive $900,000 within the first year! The steering team met every week and decisions were made and consistently implementing in the two stores. The owner learned how to work on the business without constantly being in the business. By Christmas, the owner was able to take a 2-week vacation, her first in years. The cash position of the business improved to a positive $900,000+ after the first year. On her vacation the owner met a gentleman and decided to stay in Florida with him and run the business from there using the W@B process!
Outdoor Store
This 2 store operation also has a significant internet business. The management was in a state of transition to younger managers that were not owners. W@B was implemented to better effect this transition. The process was successful in determining which of these individuals was commited to the business for the long term. In addition several teams were chartered that resulted in significant benefit to the business. The vision of the business and the strategy were important in determining the true direction of the current owners which was different than what they initially believed.
Initially they wanted to drive annual growth to around the +25% range, and since the Charter Team work the average growth rate for each month has been 20%. As an example, growth in April was 23% ahead of April a year ago. Prior to the charter work, the average growth rate had been an anemic 6%.
They have created several charters to bring payroll under control. The target was set for payroll at 16% of sales (not including payroll taxes, health, etc). Recently that payroll number had been drifting steadily upwards, hitting an all time high of 17.7% of trailing 12 month sales a few months ago. The charter work started to take root about six weeks ago, and since then payroll has come down to 17.5% for the trailing 12 months, is still dropping, and has actually been between 15% and 16% of the sales over the latest six weeks. Too many changes to mention have been implemented through this work, but the bottom line is the owner is very confident that they will now gain firm control of payroll.
The buying department is working a charter around two issues: inventory turns and profit margin. Even before they finished their initial reports, they started to see improvements in both areas, especially turns. The steering team set the turns target at 3.0, last month They came in at 2.9. The inventory is healthier than it has ever been. Especially significant is that the “sale tunnel” load is steadily shrinking as a result of various charter-inspired efforts. The company had reached the unhappy point where the standing value in the sale tunnel had been hovering around $300k – today it is $237k and continues to drop about $2k a week. The buyers are implementing changes that will definitely result in less inventory going into the tunnel at the end of the selling season. It looks to me like the inventory will be in very good shape a year from now. An all the while margins have actually been a little higher than has been the case for the past few years.
The charter concept is working very well. Without exception every charter we’ve implemented has produced a positive outcome, and among the staff at large there has been complete buy-in to this way of problem solving. Most everyone now hopes they get to participate in a charter.
At the moment the steering team identified that the organization is working on the most important issues and cannot take on more now. In terms of chartering new teams they are taking a bit of breather. They are finishing up work with two teams and still trying to consolidate the work started by a few others. In the next eight weeks or so, the steering team has plans to be going back to the Key Measurables to find direction on what to look at next.
Sporting Goods
This store owner and W@R client was interested in getting his people to run the business more effectively and improve profits. We implemented the process and he began to use it to run the store. The process and results were so impressive he asked to join M1 as an affiliate. He ran the store on a part time basis using W@B while he implemented the W@B process in other businesses as well. Almost like Victor Kiam’s line, “I liked the shaver so much I bought the company!”
Men’s Store
This men’s store was a W@R client and the owner was interested in improving the management of the company. We implemented the W@B process and chartered several excellent teams. We identified a team member that was not commited to the business and he was relegated to the sales floor instead of participating in directing the company. This team had difficulty grasping the problem identification process so optimal results were difficult to achieve. The team was able to get job descriptions and training manuals prepared to better orient new workers, a hiring process was implemented to attract and hire more qualified people, and developed a plan to mitigate a drop in business while one of the locations was destroyed by the rebuilding of that shopping center.
Surf Shop
This retailer implemented the Ultimate Retail process. The process was able to develop a team spirit and implement many changes. The problem here came when the absentee owner, who did not go through the process, would come and begin to deliver orders and disrupt the progress everyone was making. The end came when, as part of the UR process, measurements showed that the accountant was doing some unethical things in the business. The owner refused to change accountants which ended the process.
Toy Stores
Numbers tell the story and Cathy Wagner's results in guiding toy stores to success is no exception. This analysis of the industry and the success of her clients says it all in numbers:
TYPE OF STORE
COGS
TURN
GMROI
Typical toy store
52.4
2.3
1.88
high profit toy store
51.5
2.6
2.65
my client median
47.4
2.85
3.32
my client range
45.5-48.6
2.2-3.8
2.5-4.6
Manufacturing Success Stories
Folding Carton
Plant had struggled for 15 years to raise the productivity of the plant from 50,000 impressions an hour to 70,000. Engineers from corporate, plant engineers, equipment manufacturers all tried many times but were unsuccessful. The plant was to the point of closing, buying new equipment or solving the problem. They talked to M1 and then decided that what we said made sense but they should be able to do that themselves. 6 months later they realized they were making no progress and called us back. We started implementing the W@B process in July and set up teams teaching them how to solve problems. We chartered teams that included the operators on the floor running the various equipment on different shifts. By December of that same year the capacity had been increased and the plant had successfully been run at 90,000 impressions an hour. Orders were not sufficient to sustain that level of operation. The plant, one of 65 plants in the company, won the plant of the year award and annual profits from this plant were increased 8 fold.
Electrical Components
This manufacturer of sophisticated connectors had been in business for 5 years and was unable to sustain a profit. The initial complaint was that erratic sales were causing significant losses since the operation was staffed for capacity at all times and when orders were slack, expenses overwhelmed revenue. Using the W@B problem solving process we determined that the problem was deeper than merely sales. The industry expectation was a two-week or better turnaround from order to delivery. When sales were good the turnaround time grew to 2.5 to 3 weeks and an additional shift was added on an overtime basis. This presented a significant obstacle to the sales staff in competing for new orders. As orders dropped off so did the turnaround time. When the plant was able to supply in 1.5 to 2 weeks, orders picked up. This was the sine-wave nature of the business over the previous 5 years. The problem was identified as a plant wide issue and not solely a sales issue. Upon implementing W@B it became apparent that there was a conflict situation between sales and production to the point that they could only communicate through the president of the company. The president was a great technical person but was not as skilled at managing people and the organization. We started by using the conflict resolution process to bring the sales and production leaders to the point that they were willing and able to work together on the steering team. We implemented W@B and started chartering teams to address many sales and production issues. When we started the production people had all the answers for sales issues and the salesmen had the answers for the production people. Working through the problem solving process the real problems were identified and solutions that encompassed the needs and limitations of all parties were arrived at. The end of the first year saw a 50% increase in sales with a turnaround time maintained at 2 weeks or less. This was accomplished without the use of the second shift. Sales the next year increased another 25% and profits were consistent. The president was now oriented toward setting goals and measurements of performance while expecting others to make decisions. He learned how to be the president!
Packaging
This folding carton plant had two problems that the steering team identified as critical and long standing. This first was a high time required for make-ready on the die cutter of 3 hours. The steering team chartered a team to solve this problem that had existed for many years in this plant. The achievement team began working with on the problem and in two months the make-ready time had been reduced to 2 hours, a 33% improvement and the team had several additional solutions to implement.
The second problem this plant encountered concerned the largest customer complaint. Insufficient glue on the carton caused the carton to fail in use and the carton would pop open. Management, engineers and R&D had tried to solve this problem for years. The steering team charted a team to solve the problem in July. By December, the plant had gone 5 consecutive months without a single complaint for insufficient glue!
Optics
A manufacturer of specialty optics for telescopes was having severe financial problems. The company was producing about $25,000 a month and not meeting the sales volume making backlog increase beyond several months. Vendors were not getting paid and were slowing deliveries and the entire organization was grinding to demise. Implementing both the Survival Management process and the Winning@Business process provided the answers. We started in May and first recommended firing the accountant, as he was not qualified to handle the issues that existed. We taught the owners how to project cash flows, manage vendor payments, and better control the organization. The W@B process provided direction and guidance to the production group. By July the monthly production increased to $50,000 a month and by October production was breaking through the $200,000 a month figure. Profitability returned and the company went on to great success.