Your money. The money you take in from sales. The money you spend on merchandise. The money you spend on overhead. The money you make. The money you lose. Everything in your store and your store itself is about money.
But very few retailers think about the money, and that’s why many of them fail. They think about their products, their displays, their customers, their employees, their advertising. Yes, it’s a lot to think about, but it’s all about your money.
Your store is nothing but a big collection of dollars. Your merchandise represents YOUR dollars. Your employees work for YOUR dollars. Your displays entice your customers to leave their dollars and take home YOUR dollars (merchandise).
With all of these dollars to account for, the only way to keep moving ahead to a positive surplus of dollars is the use of open to buy planning. Open to buy will look at the dollars you expect to sell and determine the amount of dollars you should spend on merchandise. The key to not over buying or under buying is turnover. Open to buy employs turnover to determine your buying dollars. Open to buy also allows you to continue to raise your turnover rates so you make more dollars.
With all of the allocating of dollars necessary to profitably run a retail operation, the one tool every retailer needs is open to buy planning. A good open to buy plan will insure that you have the right amount of dollars to support your sales, pay your overhead and take your profit dollars to the bank every month.