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Liquor store owners often contact Thrive Liquor & Cannabis Advisors when they are starting in business and need guidance through the liquor store license application process. Once an application is approved, our role shifts from start-up guide to retail liquor strategist.
Year-end reviews are the foundation of annual planning. What’s happened in the past informs the direction of next year’s plan. While our liquor license consultants aren’t accountants, through years of working with liquor stores, they have a keen understanding of what makes a store succeed. In our experience, successful liquor retailers embrace planning and see a year-end review as a guiding light.
An annual operating plan usually includes:
- Actions required to achieve objectives
- Roles and responsibilities of business partners, managers and employees
- Resource allocation
- Plan timeline (milestones for stated annual objectives)
- Performance monitoring (e.g., KPIs from monthly and quarterly financials)
For more detailed information, read the Causal article “The Ultimate Guide to Building an Annual Operating Plan”. Read liquor license consulting articles at the Thrive Advisors blog.
At a high level, a review of last year’s plan and budgets answers the following questions.
What Can You Learn from the Past Year’s Performance?
Start next year’s annual plan by reviewing last year’s targets vs. what was actually achieved. By reviewing the previous year, you’ll have a clear picture of what fell short, and as importantly, what progress was made toward financial and operational goals.
Is Your Store On Track to Meet Longer Term Business Goals?
Did last year’s performance move your business closer to achieving long term goals? Where was performance weak and where was it strong?
Is Inventory Meeting Your Customer’s Needs?
Inventory management requires knowledge of the market and purchasing habits. What products are collecting dust on shelves and what is selling? The answer to these questions are in inventory lists and your point of sale system.
What Are Your Operating Costs?
Look at the past year’s operating costs and find out what increased or decreased. For liquor store licensees, labour is one of the biggest operating costs, therefore a review of labour costs, including the cost of position turnover, is important.
It’s not all about what was spent, though! What was the return on your investment in labour? As always, there are many questions to ask:
- Are each position’s salaries and benefits in line with industry benchmarks?
- Are employees satisfied with their work and are they productive?
- Is employee turnover a problem? Turnover is costly. Gallup estimates that replacing lost labour costs one-half to twice the position’s salary. Each time an employee leaves a position, you’ll need to hire, onboard, and train a new hire.
Liquor Store Annual Planning is Easier than You Think!
Thrive Liquor & Cannabis Advisors helps liquor store licensees succeed. We provide retail operations and strategic planning services that help achieve annual business plans. We bring industry knowledge and boots-on-the-ground experience to planning and strategy implementation.