What Shoe Retailers Need to Measure (But Don’t)

If you’re tired of flying blind in your business, this episode is your cheat code. Pete Mohr is joined by Dan Holman—retail coach, POS expert, and founder of Retail by CRS—for a no-fluff conversation about the metrics, tools, and systems that independent retailers need to grow. From breaking down what your POS system should really be doing, to tracking the few numbers that move the needle, this episode gives you actionable insights you can apply today.

Learn:
 → How to know if your inventory is helping or hurting you
 → What to track weekly (even if you're not a numbers person)
 → The simple question that boosts team accountability
 → How to move unsold stock without “losing” money
 → Why most point-of-sale systems miss the mark

📍 Guest: Dan Holman
 Website: https://www.retailbycrs.com
Email: dan@retailbycrs.com
Instagram: @retailbycrs
Facebook: Retail by CRS
Linkedin: Canadian Retail Solutions Inc.
Podcast: The Wealthy Retailer® Podcast

🎙 Host: Pete Mohr
 Website:https://simplifyingentrepreneurship.com
Podcast: The Footwear Retailer Podcast
Instagram: @petesmohr
Facebook: https://www.facebook.com/SimplifyingEntrepreneurship

The Footwear Alliance—a mastermind group for independent footwear retailers who want to accelerate growth, build long-term value, and lead with more clarity and confidence.

Enrollment is now open, a small group for just 6 to 10 retailers—to allow for deeper collaboration, real support, and tailored guidance.

Book a free call now at speaktopete.com
 

The Love It or Leave It tool helps you get clear on everything you’re doing… and figure out what you love, what you’re great at, and what it’s time to delegate or drop.

Watch the video and download the worksheet now at simplifyingentrepreneurship.com/loveit.

Clarity starts with knowing what’s yours to own—and what’s time to let go.

PLUS: Whenever you're ready, here are 3 ways I can help you move from the Operator’s seat to the Owner’s seat in your business:

1. Take the Value Builder Assessment to better understand the areas of your business that add the most value to your business - Click Here

2. Uncover your Kolbe. Whether just for you, or for your full team, better understand leadership strengths and ways you can advance your People - Click Here.

3. Listen my other podcast Business Owner Breakthrough podcast as well for quick tools and tips - Click Here

Transcript

0:00

Mr. Holman, it's great to have you here on the footwear retailer podcast today. Thank you so much. I'm honored to hang out and chat a little bit. Yeah, I mean, we saw each other not too long ago out at Crystal Volkitis Evolve conference for independent retailers. It was a lot of fun and it was great to spend some time with you and sit down and talk about some stuff. We've known each other for a while and, and I think we've done maybe one or two episodes in the past on my other podcast, which isn't sort of retail focused, but it's such a big piece of the business owner breakthrough and before that, simplifying entrepreneurship podcast and had some great conversations. So I wanted to carry it on here because this is an independent retailer focused podcast and you do a lot of work with independent. That's your, that's your life, right? Dan it is, yeah. I ride the, I call it the bipolar roller coaster of independent retail. You know, I'm the greatest retailer in the world today, and then I wake up tomorrow and think, oh, my God, I sucked at this. I need help. It's amazing. You've, you've, you know, we were chatting and it's like I started doing retail. So not only are you helping on the software and the hardware and all of this stuff that we're going to get into today, but you come from retail roots. Like you were there in the trenches and still are. Right? As a, as a business owner in retail too. Kind of like me. I'm coaching in the world and. But I'm also a shoe store owner. Tell us a little bit about the journey. Daniel. Well, so I did, I mean, I've spent my whole life in retail and I joined a, I joined a firm in 97 was really my first true forte into managing retail. I had worked in retail, but really I was an operations manager and quickly moved into a GM role and a shareholder and an owner role in that journey that was 10 or 12 years. And then in 2003, as we wound those stores down in southwestern Ontario is seven stores. Somebody had always been my coach. I always had. I had three kinds of coaches that I worked with. An inventory coach, a sales coach, and then an accounting coach. The accounting coach, while he was a cpa, his job really was to educate me what are the things that I look at on a P and L that are relevant and what things aren't relevant, you know, how do I decipher my balance sheet to really demonstrate the performance of my business? And so his Name was Wayne. My inventory coach was Lee, Lee Rochelle, my gosh, one of my favorite people. And Lee was hard on me when managing inventory. And then I had Tony Lester. She was our sales leader or sales coach, pardon me. And she really taught us customer driven selling in our home goods stores. And so as those stores went through that bit of Challenge in early 2000s in Southwestern Ontario, you're from there, you get what I'm saying? You know, the biggest employer in the Tri City area was insolvent. That was Wren Research in Motion or BlackBerry at the time. And we saw a massive crunch in our high end business in our fashion driven home business, furniture and home decor which really led to the breakdown of our entry level stores, our actually only stores. And so through that process somebody said to me, one of the coaches said, if you ever want to do something different, you're going to make a great coach. And I just woke up one morning and said, this is what I'm going to do. I talked to my partner and said, hey, this is what I'm going to do. While we're winding it down, I'm going to start this. Then it was called Retail Performance Management. I started that consulting practice and it has stayed with me. We changed the name of it. We evolved to the wealthy retailer in about 2013 and that's where we stayed with the wealthy retailer. Brand lives in my, for my coaching clients. And then the company that I own, Canadian Retail Solutions is a point of sale company. I bought that company. I was hired there to really build the consulting practice. And when the CEO left to go and take another role with a partner organization, they had asked me to slide into his role. And I had just, you know, I was, I was hesitant and just said, you know guys, I love this opportunity, thank you. But I'm never going to work for someone else again. And it was a decision that I made. And So I bought CRS in 2016 and we have evolved to this two branch business technology and retail operations on one side and then coaching on the other side. And so that CRS brand is point of sale and technology that retailers use. And the coaching side is the application of those tools that we use. I love it Dan. And, and you know, I know through a lot of our conversations you are a metrics driven guy and I think, I think that's awesome. You know, and for many of the people listening who love their business and they're, they've, you know, been at it, some of them, literally some of the people that I coach, you know, sixth generation and all that sort of stuff in the footwear industry. Maybe they didn't go to business school, maybe they didn't have the opportunity to dig into the accounting side of things. Maybe they don't or didn't until now or recently. One of the people in my next gen group, you know, as he's taking over now, but literally just putting in a point of sale system for the first time a year or so ago and never having that sort of stuff and having, you know, the previous generation saying you don't need that kind of stuff and all of these kind of conversations. I just love the fact that, you know, from your perspective, there's this lens that says we need to deal with this, we need to deal with this. There are clear pathways, there are clear reasonings in behind this and here's the data to prove it. Yeah. And I learned, you know, through this consulting journey, I hate the word consulting by the way. Through this coaching journey. It's just a one letter. Anyway, through this coaching journey, I really learned from one of my mentors that making decisions in retail is always going to be part gut. You make decisions based on how you feel and how you or what you believe. And a lot of times they become these self fulfilling prophecies. And really, you know, I learned that I could use data to prove myself right or wrong and I had to be open to being wrong. Who I thought was my best vendor really wasn't my best vendor. When I looked at what the data said, I thought, hey, you know, Thomas was my very best vendor because, you know, I sell a million dollars worth it of a year, a year. But the reality was I was spending 800 to get the million. So they looked like a really good vendor on the surface. And I could teach myself to believe, convince myself to believe that, but the reality was I, I was way overspending with that vendor and it cripples my cash. You know, think about why, you know, measurement is so important. In every game in our world, there's a scoreboard and we know who's winning and losing. And the reality is we live in a game. I know it's business, I know it's life, but it's just a game. And in a game, you teach score to know when you're winning and losing. And the score isn't necessarily based on what my neighbor does or some guy across the country does. The score is measured against what my plan is, what's my vision, what's my goal, what's my target. And if I lean into raw metrics, I Know if I'm achieving that target or more importantly, where to push on the lever to get better performance from. I mean a category of inventory offender, it doesn't really matter a sku when you break it down from a data perspective, it tells you the narrative or the story behind how your store works or those mini stores. The way I think about a category of inventory, you know, if in your shoe store you've got 30 categories, I treat that like 30 businesses all having a requirement to generate contribution margin to generate dollars to operate the business. So if one category is performing really poorly against another that's performing really well, I need to learn from why one works and why one isn't working, which really means that I build from success, not from failure. I don't look at a class and say what's wrong with this category? I say what's different in this category versus this category. If I'm in footwear, I want to know, you know, why? Why are my olatized performing this way but my birks are performing this way. What are the differences? And when I understand the differences, then I can repair. If I start out to fix, I don't know what I don't know. So I give myself this frame of mind, a reference point from what is. One of the things you know, and my journey through point of sale systems. Because I was one of those people in 2010 that when we bought our first store, you know, I got my 32 column accounting paper with the buttons on the cash register that said, you know, but number one was men's athletic and we sold$10,000 worth of men's athletic and 100 pairs or whatever the case was, right? And that was it, that was, that was what we had. And so I was one of those people right off the bat it's like let I need to get in. But I wasn't, I wasn't a retailer at that time. I had run service businesses for 15 years. And you know, the, the thing that I did start at the time our first point of sale system was lightspeed. And this is back when it was, you know, owned was lightspeed and they hadn't done all of their expansion and everything. And I quickly found out that as we added our second store, they, they wanted us to have two websites and one website for one store, one website for the other store. And it wasn't working for two store system. And I know they've changed everything with lightspeed and it's much better now and has grown exponentially since then. But for us at the Time it wasn't the right point of sale system. So we made a move and we made a move to another one that a lot of shoe retailers use. It's called Imagine. And then as we had imagined, we had a major data breach and we lost all of our data for six months with a worm coming in the back end and all this other stuff. And of course the point of sale system said it was our sort of internal company's problem. And the internal company said, no, it's lightspeed problem. And really I'm not placing blame on either. But what I am saying is that it forms forced us to the point where this could never happen again. So we made the move away from that particular point of sale system and to Rick's because we wanted to go to Shopify at the time, Dan. But Shopify didn't have their point of sale system ready, right. And so we went to Rick's for about a year or so. And then when Shopify finally got their point of sale system to the point where we thought it was good enough, we went Shopify and we're fully Shopify and have been now for several years. One of the things like. And you're a point of sale system guy, but one of the. One of the things that each of these ones that I've had along the way, I've loved certain aspects of them and I've hated certain aspects of them, right. And one of the things that we never found that we could ever really nail down on the Shopify side of things was good reporting. Imagine the one I said had the data breach, to me, had the best reporting. It was so good. Like everything I wanted, the store transfers, all of that stuff was great. You know, there's all these different pieces of the puzzle as people, whether they're running one store or whether we're running multip stores that they need as far as their data to make those decisions. And part of it's reporting. And you know, one of the things that you've recently helped us with is coming up with a better system for reporting. And I'm really excited to dig into that. I know it's fresh and new for me and for my team, but it's something we've tried several different onlays and things that just aren't working. So excited to get going on that stuff. Tell us about some of the other journeys, maybe a few examples about how you've helped people, people through their point of sales dilemmas, their reporting dilemmas, the different things that you've seen out there. From independent retailers. Yeah, for sure, Pete, for sure. So I'll start with this. Your point of sale system is the nucleus of your business. It holds all of this information and our role in that relationship is to use that information that manages my customer behavior, monitors and manages my customers and manage and monitors my inventory. And so nine out of ten retailers, when they come looking for a point of sale system, come from the wrong place. They come from a place of I want to be able to do this, I want to be able to integrate to this, I want this application, I want this. And all of those things are important. But the real need for point of sale is analysis which segues into every POS system has to have robust reporting that tells me, guides me on behavioral activity, both from a customer and an inventory perspective. If I look at your inventory and say Pete, you've got no open to buy in men's athletic, it's because you're over positioned and you're like, well my shelves don't look over positioned but the reality is, is probably a size breakdown issue. And so I need a point of sale system that says, hey, men's athletic is performing okay, but I'm missing business because I'm missing these core sizes or I'm over positioned because I'm holding these non core sizes. You know, think about the big dogs and in any store we end up with really big sizes or really small sizes and our inventory reports say you've got too much inventory or you don't have enough and it's because of a size matrix that's broken in the way I build. So going back to retailers choosing the right system and one of the reasons that CRS has always advocated to be a multi line dealer, meaning we want to be able to offer many POS platforms that we can then sit with a retailer and understand their business and then say this is the best solution for your business versus you know, your business fits this POS or this POS fits your business. It's two different conversations. Right. And I don't ever want someone to change their business to fit the point of sale system. I want the point of sale system to support the business that they do. Yes, there's always going to be things that we need to learn how to do differently, how do I change process. But that's, that's growth, that's evolution. And so when we work with retailers we start by understanding how do you manage your inventory. I mean you have two big assets today in inventory you have your customer, which is really your only true asset. And then you have your inventory. And our accountants teach us that inventory is an asset. But I really believe that inventory is a liability. A liability in that I invested in it. It's now sitting in hard goods in my store. And I don't think of the shoe. I don't care if it's men's athletic, that's a $20 bill or $100 bill on the floor in inventory that is supposed to be in my customer's closet. How do I make that happen? Which customers are likely to buy comes from my point of sale system. When did this last sell? Comes from my point of sale system. Where's my margin? Where's my cash? That all comes from point of sale data. So looking for a system that truly analyzes business is the number one secret. So really moving the needle in any business. I can add on all kinds of really great technology. I can have the best retail planning software on the planet. But if you have a bad structure in your system, it doesn't work right. It's like a Shopify integration. If I don't do it right, I don't get the result I'm looking for. So for me, it's about making sure that we have good reporting. And I'll share this quick story. About two years ago, my team came to me and said, we want to sell Shopify point of sale. I said, no. Okay, senior, we want to sell Shopify point of sale. No. Out of the three people that are asking for, only one had the, the ability to say, well, why? And I, I just finally said, thank you for asking. This is. Shopify is a good product. It's the best web platform out there. But it lacks intelligence, it lacks reporting, it lacks analysis. And so I, I found a company that works with enterprise level retailers and they have a really great aggregation platform. So I called them, I met with them and I said, I love this product and it makes great sense for my enterprise level retailers. But I need something that supports the indie retailer. Can we build a tool for Shopify that gives me all of this enterprise level intelligence for my independent store? Hence, CRF's advanced responsive reporting is born. It's really Shopify reporting on steroids. It allows us to aggregate data from Shopify, load it up to our platform and push it back down to the retailer in digestible form. Here's how every category is performing. Here's your weeks of supply, here's your margin. Here's where you need to buy, here's where you need to sell, here's your size. Drill down here's how old the inventory is. Here's the oldest and the newest inventory. This is the cash that's generated from those groups of categories, those that aging bucket, if you will, in shopify language, you know, what's the aging bucket? How old is it? Well, if 80% of your inventory is more than 120 days old, your customer has already seen it and voted on it. They float with their wallet. And so we start by looking at a sku. How does this item perform? Let's look at a Birkenstock or a Blundstone. How's this Blundstone as a vendor performing? And then what are the categories within that vendor? How are they performing? Oh, look, I've got a short brown that's not performing while the short black is doing really well. Wow. How does it display? And we ask ourselves these questions. We have to be judgmental and have to be have this willingness to change and adapt. If something isn't working, I never say, I tried it. It doesn't work. Ah, that's no good. It doesn't work. I ask myself, what can I do to help it? What can I do to change it? And I learned that from success stories, not from failure. Again, I repeat myself. We don't know what we don't know. We speculate and data proves whether what we believe is right or wrong. That category is not selling because of the way it's displayed in the store. And we have to think about this in old school retail, if you had a great rotation and great people, you sold. Yep, that's gone from today's retail world. It is people are the most valuable thing we have. In a brick and mortar store, the messaging is significantly more powerful than the location. So when I think about how is something being presented, I think about it three ways. How do I physically present something in my store? How's it displayed? How do I verbally present something in my store? How do I talk about it? And then thirdly, how do I, how do I present this digitally? How do I talk about it out there in the digital? If someone's googling something that I have, do I come up? Am I presenting it? Am I talking about it socially? And so when we marry those three presentation prongs, we get a sale. And when I look at a category of inventory that isn't performing, the first thing I do, I don't say mark it down, I say move. It changes presentation. You have to have a rotation strategy in your store and knowing where those good hotspots are and how to move product around. I mean, this is Grocery Store 101, right? They know how to sell goods. It's because they're constantly massaging where things are positioned on shelf. Our stores are the same. When does she see it? When she comes in my store after she's already overwhelmed, you know, she's got this wicked sensory overload going on and now everything just turns to black. And so those first, you know, 20 steps into a store, we have to make sure she's comfortable enough to not become overwhelmed, which, you know, you've been in lots of stores where you walk in and you have sensory overload. It's like, oh my gosh, they're just everywhere in this store and there's no clear traffic pattern. I'm overwhelmed and I don't buy. And that's about presentation. Yeah, yeah, for sure. I mean, when we look at this stuff, you know, there's, there's this old adage around this sort of philosophy is I've been here, I know what works, I know what doesn't. You know, that's there's a lot of multi generational footwear stores, I'd say more than a lot of the other independent retailers that are out there these days. And how do we blend for the people that are taking over their family stores, for the new managers that are coming in, maybe working for somebody who still owns the store, but maybe isn't as a, as, you know, thinking about this, these data driven decisions, you know, how do they incorporate some of this stuff and encourage leadership, ownership essentially to start making some of these decisions in this way. Dan so for me it all starts with, you know, my W in the wealthy retailer. It's about win win, which means we measure the living daylight side of things. But in true, you know, if I use EOS language, entrepreneur operating system language, I'm going to keep it simple. Less is more. So I'm going to start by creating a dashboard that I refer to every week and I measure the key metrics that drive business, those leading metrics. And when I start at the top level and everything is performing well, I don't necessarily need to drill down. If I'm hitting my goals, I'm moving forward. And every week looking at it. I want to be able to look at my dashboard for CRS on Monday morning when I, when I get up with my coffee and look at how am I tracking towards goal this month. My team is accountable. Each person but in each department enters their numbers. They own their numbers. So we look at leading metrics. Who owns marketing? So Alex, you put your marketing numbers in there. Who owns conversion? Sales guys. Sales guys. You put your information in there. How are we supporting the client? Colin, you put your numbers in there and then I can say okay, financially, how does that look? Okay, accountant, you put this in there. Candace, you plug in. You know, what's our cost of purchase running at or what's our margin running at. And so now if I measure it every single Monday morning, I know where I'm trending. And a superpower that every retailer has to have is short term prediction, the ability to speak the future right now. What will happen this week, this month, this quarter? Don't worry about 12 months from now. Think about 12 months ago, the place that we were in. Heck, think about three months ago, the place that we were in. We are influenced by the noise that surrounds us. And funny enough, here you and I are, Pete, we are Canadians, but we were more impacted by the American election than we were the Canadian election. That just happened. Exactly right. And so Canadians are being steered by the mass engine that media is. And as a result, it's noisy. And so for me, the superpower that I have is to say, okay, block the noise and look at the number. Block the noise, look at the numbers. Numbers tell me my average sale is X and I need it to be X. What strategies do I employ to improve that number? My conversion is at 50%. How do I get it to 55? What does that mean? Well, on 10 customers a day, I'm going to close six instead of five of them. What do I need to do to get that extra close that moves the conversion? And when average sale and conversion are multiplied, I get my average or my sales total. If I know I've got a hundred people walking in, they each spend 50 bucks and five of them buy. I do 250 in sales, I know my numbers. And every retailer should be able to look at the last 12 weeks and say the last 12 weeks. Those trends that I've created are the story of where I'm headed now. And again, I don't look at last year. I look at the last 12 weeks, which is a small subset of the last 12. The rear view mirror is smaller for a reason. How often lay a reference back, Dan, and look at previous year, like when, when, when. And I like the idea of wanting to be more current and stuff, but I think more people do look at previous years and I have certainly fallen in that trend, you know, and so from, from looking at these sort of things, and you mentioned it, and stuff is changing like crazy right now, whether it's the stock market, whether it's housing prices, all of the different things that are affecting not only Canada, but in the States too. That North America is changing right now with buyer confidence in a variety of different things. Super. So what happened last year at peaks of things certainly isn't as relative as what's happening right now. But how often do you go back? Do you go back sort of quarterly on your sort of framework and take a look quarterly at that lens or what's sort of your framework there? When I'm planning my next quarter goals, I absolutely go back and reference leading metrics, not sales. I don't ever measure last year's sales. I measure the things that create sales, traffic, conversion and average sale. If you say to me, where are you on sales against last year? I will say to you, I don't know. I don't measure against last year's sales. But if you said to me, where's your conversion this year over last year, damn straight. I know that number because that's the lever that I'm working on. So when I set my quarterly goal, I am using as much intelligence as I can behind me to understand was that number was, why was it that way? And you know, today, if your sales are down, if you said to me, Dan, my sales are down 10% right now for the month of May, I would say, okay, what's your traffic comp look like? Okay, what's your average sale look like? Okay, what's your conversion look like? Okay, now if my conversion is the same and my average sale is down, is that a result of internal sales or external influence? Because the people that are walking in your door are spending money, are they spending the same amount as they did? If the answer is no, the average consumer dropped $25 in their average spend, what does that mean? That means I need more traffic opportunities. That means I need to drive more opportunity into my store to match the sales that I had because the average sale has come down. So the simple answer is, whenever I plan goals, I look at as much data as I can to get the goal as accurate as possible. But your 90 day performance, those, those key performance indicators, conversion and average sale, doesn't matter what the traffic is. They don't look at traffic. It's interesting, Dan, we've been tracking door tracking for, I don't know, probably 12 of my 15 years as a retailer and we look at conversions and we do all of that. But so many of the retailers that I talk to don't count Door counts. And they, I mean they might have their conversion on, on Shopify, let's say, or on their web platform because they can see that. But I'm talking about in door conversion, which is the bulk of most of our listeners business and they don't, they can't pull up an accurate conversion. And so you know, for those who don't have door counters, for those that don't believe, you know, that they need them, tell us a little bit around the, the philosophy of counting and how can, how conversion can make a difference. Well, okay, so if you, if you absolutely refuse to count your traffic, I have this bit of an ass response then, then why do you count sales? Like, if you don't want to count your traffic, why are you bothering to count sales? Like, do you not understand how impactful traffic is to your sales? And if I can't invest 500 in a traffic counter to count my traffic for me, remove all the subjectivity that comes with counting traffic manually. Well, the FedEx guy came in three times. My, my traffic is off. Well, if you measure it the same way every day, it doesn't matter. Exactly. We're just looking for a trend. So for those retailers, I always push back and say spend the 500 bucks and start counting traffic. If you can't do it, then focus on your average sale. And now tell me how do I improve the average sale in this, in this period? Is it selling them more? Is it add ons? Is it complimentary items? You know, if I want to move in your store, if I want to move your average sale, the first thing I'm going to do is say, okay, if your average sale is 130 and you want to get it to 150, how do I go and find a twenty dollars add on? Now maybe it's not twenty dollars, maybe it's a sixty dollar item that I'm going to look for and sell it to one in three people, which bumps my average sale by 20 bucks. And if I write a hundred sales, I just added$2,000 to my sales today. And I didn't work any harder. I worked smarter, which, you know, that's enough. See, don't work smart. Work smarter, not harder. Anybody that's ever learned to work smart really did a lot of hard work to figure that out. You have to work hard first. And so it's the reality is every independent retailer, first thing they need to do is start counting their traffic. Even if they do it with a stick man to give them a consistent measurement. If I know on Mondays I get 18 people through the door and I've got a 50% conversion. I know I'm going to sell nine people. My average sale is 50 bucks. I know it's $450 in sales. I have the ability to predict that and measure against it. If I don't count it, if I'm not measuring it, I can't improve it. And this is really why I lean back to a scorecard and I'll say, hey, just do a high level, simple scorecard. Here's the five measurements that I'm going to take every single day, or sorry, every single week. And I'm going to change that. If that number's below where my target is, I'm going to ask myself, what actions can I take to improve that number. If average sale is low in the store, is it really a consumer problem or is it an internal problem? Are they really engaging with their audience which then brings them back to their selling system? As many retailers that don't use traffic accounting don't use a selling system. A system is just consequential actions, right? It's just consequence. And if I think about, in my customer driven world, I say greeting engaging, understanding them, presenting a total solution, not an item, handling their objections, closing the sale and exit greeting them. Now, the greeting and the exit greeting happen to every customer that walks in. And having this system, this rule, it really means that every single person that walks in my store gets the same level of service, no matter who serves them or how they present themselves. You've heard this before. They're just looking. They are, yes, they are just looking. They're looking for somebody to serve them, not sell them. And you see, this is the mistake that we make. We set out to drive sales, which is a consequential number. Instead, we should focus on serving the audience, which is action driven, not results driven. It creates a better result. And staff will say to me all the time, oh, I talk to them. You talked to them. Okay, what are their names? I don't know, they didn't tell me. Okay, well then you didn't engage them. You said, good morning, can I help you? And they said, no, just looking. And you said, great, go ahead. Exactly. And you know, there's all of this stuff, Dan, ties to cash flow. And you know, one of the things, getting back to the accounting side, we've got our balance sheet, we've got our income statement, which some retailers understand and look at, but even less understand a cash flow statement. This is because we've been taught a. Lot of times it does. Yeah. And we've been taught to use accrual accounting, which doesn't really a factor your cash flow. And so I like cash accounting. This is how much I spent on inventory. This is what I generated in sales. Here's what's left over to operate my business. If a retailer is out of cash 95% of the time, maybe even higher than that, it's because their cash is invested in inventory that's not turning and they're not taking the necessary actions to convert inventory back into cash for fear of losing money. Pete, the secret is the money's gone. It's like investing in the stock market. I can watch the stock market. I can watch my Shopify stock drop today. And if I sell, I lose. And so I freeze, wait, and wait. For it to go down further. Right, right. But this is what we do in retail. Hey, this product has been sitting for 90 days and it hasn't sold. If I mark it down to 50%, I'm going to lose money. Right. That's going to become a realized loss. But it's not a loss. It's a misnomer that I'm losing money because we're talking about cash. So If I take $100 footwear item and I mark it down 50% and the customer buys it, I just made $50 back, which might be at or near my cost, and I invest that money in a category or in a product that I'm under positioned in to catch your sales. You see, this is why, while I love looking at a balance sheet, I love looking at an income statement. The only thing I ever use my income statement for is to tell me whether a category, an expense category, is on track or off track as a percentage of revenue. If it's. If I say, hey, my rent needs to be 10% of my revenue and it's trending at 12, do I lower the rent? I mean, if you go to your landlord and say, look, my rent's 12%, it needs to be 10. My coach said it has to be 10. Can you lower the rent? Landlord's gonna laugh you out of the building. Sure. But when I look at it as a percentage of sale, I have two opportunities to correct that. Number one is raising the expense. The second is increasing the revenue. So now let's go back to your cash pool inventory and understand where am I sitting idle where I don't have cash that belongs in the bank. And I use this every day with retailers. You've got $7,000 on your floor. That's not in your bank? Do you want it in the bank? Where's the 7,000? Well, here it is. $7,000 that cost in dresses and whatever. Here's the $7,000 over position at retail. You want that money in your bank? Mark it down and move on. Put it in the bank where it needs to be. And so we always measure our success in retail, our financial success by looking at our bank balance. Not an income statement or a profit and loss statement. Right. A profit and loss statement is going to give you cost of goods sold, not cost of purchase. Your cost of purchase is the money that you invested in stock in the stock market. Right. And now you want to sell that as high as you can, but you have to sell it. You can't wait for the inventory stock to become revalued. It's like somebody saying to me, hey, I got all these winter boots, what do I do with them? Mark them down and get rid of them. Yeah, but I'm just going to buy them again next year. Okay, then the first question I want to know is how do you feel in cash flow today? You have lots of cash that you can afford to sit on inventory, yes or no? No. Then sell it. Yeah, but I'm going to rebuy it and spend that money again. But you don't have the cash you want, which is more important to you? And there's exceptions to every rule. Somebody said to me yesterday or on the Friday, should I, should I pack and hold these insulated jackets? I'm like, if you've tried everything you can to sell them, then what's the point in marking them down? No one's going to buy them. So if you can't third party or liquidate them, you can't sell them on a liquidation marketplace or in any marketplace, then yeah, you might as well hold them. And we got to get cash somewhere else. Where should we get the cash from? All the data drives the decision. And I think as business owners that's the biggest thing that I believe anyway with the business owners that I work with is that they're so inundated a lot of the times in dealing with the daily fires and dealing with the small items where they haven't aligned and assigned accountability to other people to help them with some of these minor decisions. Like they, let's just use an example of returning a shoe for a customer at the front cash. You know, why are they involved in that decision when it's taking away the decision making juices that they need for these bigger decisions? Like we're talking about here on the podcast today. It's because they're habitualized into doing. It's because they haven't set up the systems. They have don't have the process. They haven't actually, maybe they've given somebody a title, but they haven't actually aligned and assigned accountability. All of these sort of things come into the fact that we need to have processes and systems and data and all of this stuff to run a, you know, a this generation type business so that where our future looks bright and so that we know what's going to happen, we know what's going on and we know where to go. And you know my feeling, Dan, we talked about this when we were at Krystal's conference a few weeks ago. But the future of independent retail is strong. But independent retailers are changing and we can't stay what we were five years ago, even 15 years ago when I entered into retail. But you know, we have to evolve with the times. We have to continuously advance our businesses and ourselves and our teams in order to have the best business that's creating the best future, not only for our brand, whatever's above your store, the name above your store, but also for our lives. You know, Pete, I have always looked at my businesses as they, their purpose. Their sole purpose in existence is to support my life and the lives of the people that work with me. And so I have to put the effort into the business in order for it to support the lifestyle that I want. And the truth is, most retailers that you and I come in contact with every single day went into business out of a place of passion, not purpose. They chose to follow their passion. And those that are truly passionate about retail also learn retail. They're the first ones to say, I don't know, right hand goes up, I don't know that number. But we've got to get past this sort of our own ego to be able to say, hey, I don't know, I don't know that number. And the available resources today are unmatched in history. It's unmatched. And today's retailer is going to be different than yesterday's retailer. And that's part of evolution. You know, 2021 forced evolution in every retail platform. And the reason that I feel so strongly about independent retail over enterprise level retail is because of how we, the independent retailer, evolved and adapted to a new circumstance that was introduced to us. It forced us to evolve. And so now people have this resistance to additional evolution because they've gone through that painful Period. But the reality is you have to wake up every morning and ask yourself, what don't I know today? I don't know what I don't know. So I've got to learn. And that just starts by measuring your business. And I mean, listen, every one of the women's fashion stores I work with, that's not why they're there. And so we have to keep things really simple to say, look, here's the number that you need to focus on this week. This number's up. Just this one metric is off. And here's what this metric represents in your store. Improving it will result in this. Leaving it will leave you here. Is what you did yesterday good enough for tomorrow? The answer is no. Look at what's going on around us. With all of these big brands that are really struggling, it's because they. They misunderstand their core purpose. Their core purpose is to serve their audience. It's not about profitability. If you ever got into retail thinking you were going to become a millionaire as a retailer, you got in for the wrong reason. That doesn't mean we don't become billionaires in retail. Yeah, but that's not why we did it. I mean, we get in business to make money. Yes, but understanding how to make money takes education, not an mba. I think that's the interesting thing right there, Dan. You know, when I look at the journey here and some people feel as though, and retailers, and we can use this in other business owners too, but because they've got to where they've got in their business, they're at some sort of ceiling, they're at some sort of cap, they're at. And they don't, they don't feel either educated enough or, or they're feeling sort of as though they can't take it to the next level. All of these different things, but maybe just unsure about how to take that next step through. And I think today's conversation's really an interesting one in that, you know, being a business owner, we make decisions. That's what we do. We make decisions. And I think having the data, having this analysis, having the tools, having the coaches like you and I type thing to help us along the way to sort of make better decisions so that we can craft the business, too. I like to use that sort of idea around, you know, Atlas holding up the globe, you know, so are you always holding up your business? Are you the. The structure in. Underneath the entire world above you, which is your business? Or is your world there to support you and your life? And we need, and it takes time and it takes work and it takes planning and it takes information, it takes people, all the different things. But if we don't start the journey to make some of the changes and we don't set up some of these things in order to do this stuff, it's just never going to get to where you want it to be. And every business owner has to look in the mirror every morning and ask themselves, will I be a visionary leader today or will I be a business operator today? You see, a visionary leader has this ability to look forward and see where they want to go and when I know where I want to go, I figure out how to get there. But if I spend my time operating, you know, we hear these words all the time, working in it instead of on it, I don't get anything done. The real power, the real power that an owner should have in their business is the, is the visionary outlook for where they're going. Think about it like this. If you've ever gotten in your car, loaded, the kids, your wife and kids in the car and you set out on a road trip, you put a dot on the map and said, this is where we're going, honey, we're going to Wally World. Now let's Clark Griswold our way to Wally World. There's going to be seven detours, there's going to be two accidents, there's going to be some girl in a red Ferrari that's going to cause some problem for me. But we're going to get to Wally World. I'm hell or high water, we'll get into Wally World. And store leaders and owners don't have that ability to say hell or high water. That's the dot I'm getting to. Now I have to think about how do I get there. There's a roadblock, there's a disruption in my business. Okay, let's replan, let's get around that to get to that. Done. And if I'm taught in working the business instead of steering the business, I don't make traction. And this really speaks to my ability to lead my people to do the things that are important for them to achieve results. You see my core job at CRS as a visionary leader, you know, not an operator. I do not operate the day to day business is to ensure that the leadership team has the tools that they need to be successful. And when I have a conversation with them, I use the. Your language, your number, your team, your performance, your result. This is yours, it's not mine. I live consequentially to your performance. If I don't like my life because of your performance, it's your performance that I need to help change. And is it because I've bottlenecked things with you? You know, and this happens in our stores. We're lean. We don't have a receiver and a shipper and an uncompro and a merchandiser and a salesperson. We have to ask everybody to wear every hat. Well, it holds us back. That's the glass ceiling. Too many people doing too few things. How do I coach people to let go? How do I coach an owner to let go? It's not your number, it's her number. It's his number. Biggest piece that I found when I work with owners to do that as part of aligning and assigning accountability, that. That structure, right? We want an accountability chart, and we want names there and all of that sort of stuff. One of the things that I often, you know, use as an example is how often are people coming to you and you're thinking to yourself, they should know that by now. All the time. You have small business owners, like, and you're thinking to yourself, gosh, why don't they just make the decision? They should know this. And my philosophy is, because you haven't allowed them to. And, you know, I always will reflect it back and say, you know, if somebody's coming to you and asking you that question and you're asking yourself this question, you know, Joe's been with me eight years. He should know what to do. Then you should basically say, well, what would you do if I wasn't here, Joe? And they'll usually respond with the answer and say, hey, listen, and I would do this, this, this. And here's another piece. You have to wait in uncomfortable silence. You can't answer it for them as they're expecting you to do. And then they're going to say, okay, well, I would do it this, this, and this. And now I can say to them, absolutely, that's exactly what you should do. Go ahead and do it. And by transferring that accountability, it's one less thing that you're going to have to do next time because you've actually handed off the accountability that maybe they even had the title for, but you never gave them the accountability for. And you're moving your decision level from that level up to the level, the next level, so that you can start working on some of these things. Because that's the other thing, Dan. Small business owners say, I never have time to work on my business, I'm just too busy. Time I don't have time is a demonstration of priority or lack thereof. Exactly. They miss structure. And I will say this. I will often rub my team or my clients the wrong way because they ask me a question and I answer it with a question. Right. I was taught never answer. Never answer a question with a question. But in teaching someone something, I'm going to ask the question, well, Joe, what would you do? Pretend I'm not here. Tell me what you would do. What would you do? Yeah, you're spot on. That's exactly what I would do. And what I would do doesn't always have to mimic what you would do. I want you to make the best decision for the customer. Now, we have two kinds of customers in our business. We have the internal customer that pays us with time, and the external customer that pays us with money. But everybody we come in contact with in our business is a customer. And so I always say, I'll say to Candace or Colin or Owen or whoever, what do you think is best for the client? And then they'll tell me that what they think is best. And I'll say, good, go with that. If that's what you believe is best for the client. You know something I don't know. And you and I don't need to spend time teaching me what you know. I trust what you know. Go make that decision. And clients will say to me, hey, my hours are changing. Should I get rid of somebody? And I'll say, well, what's your sales per hour, Dan? I don't know that number. Good. Let's go find that number first. If we're going to change our sales per hour, if we're going to change our store hours, how do we have to adjust our sales per hour to not give up revenue? So we ask questions, and this is really what we do as owners. We ask ourselves questions. And if we can't do that for our team, that creates accountability. Hey, man, you got this. This is your decision. Let's go with it. That creates accountability. I used to do this in buying. I would take salespeople with me on buying trips, and I would say to them, what do you think? Can you sell it? How would you sell it? Who would you sell it to? All right, let's go get it. I guarantee it sold when it got to the floor because they owned it. They made the decision, not me. We do the same thing. You know, Jen always accompanies me, and she does our buying, and she's in charge of sales and stuff like that. So she always comes with me too. I think it's a good practice and I think it's one that a lot of small business owners don't do. It's, it's interesting. Dan. We've had so many great tidbits of information here and I know we're getting a little tight for time, so I, I just loved having our chat. It was great to see you a few weeks ago and look forward to seeing you again. And for those that want to dig a little bit more into, you know, the Wealthy Retailer, which is a podcast that you had me on at one time too. More about the Wealthy Retailer, all of your information, more about Retail by CRS how do they find you and where do they go? Simplest place to find us is retailbycrs.com from there you'll see all of our point of sale offerings and coaching and the Wealthy Retailer. But really a CRS retail by CRS.com of course we're on all the social same thing. Retail by crs. It's actually our brand. Retail by CRS in the US is powered by Canadian Retail Solutions. As we started doing business a bunch of years ago in the US we changed that brand, you know, to promote Retail by crs. So any, every channel we are there. Retail by CRS I'm somebody that always has my hand up, not out. If you ever want to just chat with me. If you ever want to pour your heart into or out of pour out of your heart what's happening in your retail business, just, just book 30 minutes in my calendar and, and let loose. You know, sound off on me and I will give you something that you can take back that will make you feel better and gives you an action to make change. So yeah. Retailbycrs.com dan@retailbycrs.com I'm happy to chat with anybody. Thank you Dan. I appreciate it. Go make it a great day. Thank you. You too.