Retail Financial Know-How

The retail financial how-to articles below are by Pat Johnson and Dick Outcalt, Co-Founders of The Retail Owners Institute® and (You may have seen some of them in recent editions of Marijuana Venture magazine.)

Even more self-help, how-to information on retail profits, inventory control, and cash flow management can be found at The ROI and/or its microsites. For more about that, see "Who's Behind This?"

The Diamond of Doom

Diamond of Doom - Costs of Excess Inventory

As a retail owner, one of your primary goals is to boost profit margins—right? And you know that good inventory management is essential to producing top-notch profits. 

You also know that bad inventory management can cause big problems with profit. 

However, you may not know the actual cause-and-effect of bad inventory management. read more

How to Shape Up Your Inventory? Manage Inventory Turns

If your store is like many other independent retailers, it’s probably overstocked much of the time.

This excess inventory is like excess fat: 

It looks bad

Consumes energy the inventory “muscle” needs

Threatens the financial health of your business.

If you’d like to time your inventory flow so you always have fresh merchandise and a healthy turnover rate, consider this shape-up plan.

It will help trim away excess inventory without cutting into the muscle of your stock. 

read more


The Myth of "the Bottom Line"

Retail business owners are conditioned from day one to "have a profit" and "improve the bottom line". 

Yet, sadly, most owners aren’t sure exactly why.

What IS profit?

Where does it go?

Why is it important?  


Are Your Profits Hiding in Plain Sight?

The typical accounting package lists expenses in alphabetical order. From Advertising, to Auto Expenses, then Bank Charges, and so on. Lines and lines of separate expense items, all detailed to the penny. 

How useful is that?!

Is this designed to inform? Or, to confuse and confound? No wonder few retailers will spend much "quality time" with their financial statements.

read more



The Top 5 Killers of Retail Businesses

(Hint: Declning sales is NOT one of them!)

We identify and examine each of the Top Five Killers of Retail Businesses. 

While they all need the respect of you, the owner or CEO, your highest priority always must be the #1 slayer. And it just might surprise you to learn what it is. 

(Here's another hint of what it's not: over one-third of the retail businesses that fail each year are actually "profitable".)   

read more



The Backbone of Business

Linked financial statement

Put the Cause-Effect, Cause-Effect Power to Work for Your Stores

Get a greater sense of control. And the peace of mind that comes with it! 

read more



The Four (Only!) Ways Retail Businesses Grow

Before you get too far down the road in planning another store, adding new merchandise lines, or some other expansion, you first must decide on your fundamental growth strategy.

Why? Because your growth strategy and your tactics must align.

read more


Inventory Control: Back to the Basics

Sound merchandise management is crucial for the survival and prosperity of your retail business.

It’s not just another “paper exercise”—it can mean the difference between strong, positive cash flow or a constant battle to pay your bills. 

It can keep your operation profitable even in times of less-than-robust sales.  read more


Find Your Best (Most Profitable) Customers. Now – Find More of Them!

Today, it is not enough to have profitable products.Or profitable lines of merchandise. Or even profitable stores.

Instead, to continue to survive, we must find—and nurture—our most profitable customers.  read more

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