Tuesday, June 27, 2023

How Do You Stay Dynamic?

When you first open a retail store, you are a dynamo. You are a machine that turns energy into retail sales. You take chances, you make big mistakes and have big gains, and you can be there to file away the rough edges on crude processes, or put on a dog and pony show to sell that last box of trading cards. It's about you, your decisions, your skill, your money put into the right places, with the right support behind it, with unlimited hours as your time has no value. As you grow, this changes. It must change.

Your successes are settled, product categories on autopilot, events that fire without a hitch. You need these known variables to be set to make room in your brain for new things, but it also means these areas lose dynamism. There are over 20 Magic the Gathering formats and you probably don't want to think too hard about it when you know the three that work in your area.

You know your pain points. Perhaps you don't sell Yugioh anymore because it crushes staff morale, or you know if you sell pop culture wallets, criminals will target you. You know what works, you know what doesn't work. Every good decision is a milepost for success, but it is also limiting. It cements your mind while also giving competitors a wedge. You also learn to strike a work-life balance that takes your unlimited, dynamic energy and caps it, so it's sustainable. Your gushing, wild wellspring of energy is now a capped off oil derrick of energy. So predictable and steady.

Your capital, once used to buy product and precisely what you need to keep your operation going, begins to diffuse into other things. At one time my store had a pinball machine and a van that was more billboard than needed vehicle. Buying art for the walls became a thing I just did when I felt like it. I'm driving the company truck right now with the company paying the insurance. Your money can get distracted over time, not focused on return on investment. As you become successful, business cases get stretched thin as you justify why you need the latest iPhone or gadget. 

How do you fix all this? 

Hire Dynamic People. The best people to help you stay dynamic are people from within your organization, with their own dynamo of energy. They understand the core values of the business. If they push back against one of your decisions based on these core values, you know you're in good shape. They know the goals of the business. They are usually eager to seek out new products, new projects, new hires to do great things in the name of this mission. Hiring from within ensures values are maintained and they understand the economic constraints of the business. 

Retail is damn slow, and many dynamic outsiders want to do everything, right now. They want to make a mark on the world, rather than finger paint in retail. I once hired an outside manager who spent an alarming amount of money, very quickly, on amazing projects. I kept that going for as long as I could, but there was a mismatch that couldn't last. They imploded before we had to have that discussion, but honestly, I would have gone into debt for that energy.

I am the buyer for my business, but I'm also 55 years old. Do you think I'm up on the latest anime or hot pop culture topics? That's an area where I assign buyers under me to handle accounts I have no business working with. It doesn't take a lot of time to have another employee handle a few accounts that get bought from once a quarter.

Don't forget the larger you build your organization, the less efficient it becomes as you inevitably hire less useful people. I can see it on any given afternoon, looking at our cameras remotely. You can't hire your way into a dynamic environment, it's painstakingly built with competent staff and excellent managers.

Audit Yourself. Think of how you would view your business if you were going to sell it. You would take the usual EBITDA calculation (earnings before income, taxes, depreciation and amortization) and subtract all the nonsense and owner compensation above market rate. What would your business look like if you were lean? Maybe know your nonsense number. 

There's certainly nothing wrong with paying yourself well or having your cell phone covered by the business, but there are likely some dodgy things you might want to pull back on that are starving your business of cash. It's best to do something like this before your business takes a downturn. Even if you don't change anything, you know where the fat lies (you are probably a producer of fat). 

Have a Through Line. If you don't have goals for your business, it's unlikely you'll suddenly achieve one. Maybe you want additional product lines. Who doesn't? Maybe you dream of opening a second or third location. Maybe you want to expand in some fashion. Maybe you want to hire a marketing-online sales person (I do). All of these goals are risky, prone to kill your business, but necessary in keeping you dynamic. I'm at the Maui Beach House stage, where I need a project to keep me from jeopardizing the business while it grows organically. I would like to say I'm done, that my business is fine like it is until I retire, but we'll be out of retail space in a couple years and wondering what to do next. I better be ready.

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