Over the past number of weeks, I have had more conversations than usual with store owners that are hiring store managers for the first time.
Some stores have grown enough that the owner can afford to hire a manager and have someone else handle the day-to-day running of the store. This can be a helpful step, as part of being the owner is determining in which direction the business should grow. That can be a hard thing to do when you are tied to the day to day operations. There are thousands of I’s to dot and T’s to cross in even a small store. When an owner is able to delegate the supervision of those tasks to a confident individual, that is a great thing!
Other owners have opened a new store (or more) and need to have someone running one or both locations, since they cannot be in more than one place at a time. From the data that we collected for the Natural Foods Merchandiser Market Overview 2014, out of nearly 11,000 independent natural stores, 5 percent of them had opened a new store in 2013, and 5 percent of them were planning to open one in 2014. Between these two years, that's nearly 1,000 new stores and is a great reason for celebration for those of us who believe in vital role of independent natural retailers!
On an important side note, in just a few weeks, we will start collecting data for this year’s Market Overview. We do most of this work in-house and via phone calls, rather than surveys, to improve the accuracy of our information. Our team knows that you are busy, but the time that you invest in talking with us helps all of us in the industry understand where we are growing, where we are not, and what challenges we are facing. We appreciate your taking time to share information with us to produce the Market Overview. (Your store information is completely confidential and only shared when combined with other stores; never on its own.)
As each circumstance is different, there is no way for me to honestly represent all of the things that an owner should do when hiring a manager. I encourage you to pay attention to the thoughts below and to look for resources like those from Entrepreneur magazine. If you have already crossed this bridge and have some tips of what to do – or what not to do – please share them below.
Decide whose job entails what
Until now, your job has consisted of things that are owner’s duties and some that are manager’s duties. Now those duties have to be divided. While an outside expert can give you a good idea of what should go into which job, the ultimate decision is yours. No matter how you make the decision and divide up the work, you also must communicate it clearly to both the manager and the staff.
Praise publicly; correct privately
This is a well know tenet of management that is even more important when it involves someone that is stepping into your former position of running the store. When they make mistakes, deal with them privately. When they do well, speak of it openly. You are not only building the confidence of your new manager, but you are also making sure that the manager and the staff that know that you are confident in him or her. If staff thinks that you have doubts, they will, too. Be sure that you never undermine your manager
Choose: Delegate or Empower
Decide how you are trusting the manager to run your store. If you have delegated the operation to the manager, you are holding hi mor her accountable for obtaining results by using your methods. If you are empowering them, you are holding them accountable for results and leaving the methodology up to them (assuming, of course, that their methods are legal, ethical, etc.). Obviously, empowering is a much bigger step on your part. It not only requires you to exercise some great trust but also requires that you have a good system of metrics and measurements in place that allow you to objectively evaluate your manager’s performance. Some of these metrics would include sales growth, gross and net margin, employee turnover, etc.
Compensate wisely and fairly
You know the job of a store manager is a big one on its best day and can expand to an even bigger one on tough days. Compensation has to be fair, but it also has to be wise. See what you can learn about the amount paid for comparable positions, both inside and outside the natural products industry, so that you can see the norm in your market.
My suggestion is that pay have at least two major components to it. The first component is base pay, an amount paid every week that your manager can count on. The second is paid as commissions or bonuses and is contingent in reaching key performance goals. For example, if a sales increase of “X” is reached, a bonus of “Y” is paid. Think through how you structure these. If you only bonus on sales goals, there may be a situation in which sales are achieved via pressuring your shoppers (which makes the increase only a short-term one) or via dropping prices (which means that as your sales increase, your margin and profits go down). So offset a sales increase bonus with an equal bonus for satisfied customers or for growing margins. Be sure that your managers are paid for reaching the same goals that you have as an owner.
Growth is a great thing, but growth is impossible without change. Change introduces the unfamiliar and brings about uncertainty and risk. As you face new opportunities and challenges in running your store, all of us at NewHope360 wish you the best!