The Hardest Lesson Learned!
I spent this past weekend in Florida with my parents. They’re 80 and retired from the paint business. My father took his 30-year turn at the helm of Tremont Paint like all the Lipton men before him while my mother ran our wallpaper and decorating department for a decade and a half.
Of COURSE…. my father and I spent much of the weekend talking about the paint business.
More on those conversations in a moment!
I find myself thinking a lot about my paint stores these days, but not for the reasons you might think. I’m in a strange situation with my stores at the moment. It’s summertime and we are busy.
Yet I find it unsettling.
Usually when the stores are busy is when I’m most at-ease. Not this year.
At the moment, I have a lot going on outside of my stores. It’s all paint related, but none-the-less, it takes my attention off my store’s operations. This is not the first time in my career that I’ve gone through a period when I was out of the stores more often than in them. About 20 years ago, I did a nearly 5-year long, full-time consulting project while maintaining ownership of my stores.
The emotions are always the same when this happens that i must spend a lot of time outside the stores: satisfaction in the outside work while worrying about my lack of attention to the retail side’s details.
The five years I was gone for did not go well in the stores. The manager I had with me (for a decade before I left) decided to take advantage of my absence and promoted himself to partner! By the time I was done paying for the investigations, I was out well in excess of six-figures.
I became my own cautionary tale. I hope to avoid that this time.
I made a few mistakes that ended up being tragic. I had always thought of theft from my stores as a “small” problem. I knew that in retail, people steal. I had experienced it previously and knew other dealers who had had the same experience. As I prepared to leave my stores, I envisioned theft as the missing screwdrivers from the counter display. I got comfortable with the trade I was making: opportunity at vast wealth in exchange for a few missing screwdrivers.
It was my accountant who alerted me I had a problem bigger than a few screwdrivers; though I was already suspecting it. I was starting to hear from my bookkeeper saying she was short on funds to cover the bills.
Never a good sign!
The investigation cost an arm. The losses were the leg! It was financially and emotionally devastating.
It was a VERY hard lesson to learn!
This time things are going to be different. For one thing, I’m not gone 100% of the time and so I am still a presence in my stores. I also have been very careful about how I have set up the work in my absence.
Now, one-person orders and another checks the goods into inventory. Then when I’m there, I “audit” both of those processes. Using my POS system, I can easily confirm that my intake of a given product somewhat equals my sales of that item. I can also confirm that the amounts that were checked into our POS system match the amounts that the vendor billed us for. That doesn’t ensure that I don’t get stolen from of course. But it does ensure that if anyone wants to get rich stealing from me, they’re going to have to take just a little at a time; and then take it many times! That's a risky proposition that bends the odds in my direction.
I won’t bore you with other things I’ve done to ensure my financial safety because I’ve got another topic I want to mention. But, here’s one good rule to ensure compliance with your “no stealing allowed” policy: someone has to guard the guards! Don’t let any one person control all aspects of the inventory control process! You should not leave one person in charge of ordering, checking in, POS data entry and inventory counting! Even if you are a small business, you MUST spread this work out.
I have a tendency to travel with a recording device these days. Occupational hazard of being a podcaster I guess. Or maybe I just think it’s cool? While I was unpacking at my parents house, I came across my microphone and had an idea.
The next day I made a podcast with my father!
Billy Lipton was a beast at the counter, often taking care of 3-4 customers at one time and able to carry two buckets of paint in EACH hand! People loved him and loved doing business with him. Old-timers who are still hanging around the paint business STILL ask me how he’s doing.
Well for those that wonder, Billy is doing just fine AND you’re going to hear from him soon! Give me a few weeks and I’ll have a new episode of the "Mark, My Words!" podcast featuring my father. We talk about what life in a paint store was like over the years and the many changes he saw working in a paint store from 1958 to around 2014!
Final thought: I know I’ve been promising some hardware content for all the hardware followers I’ve picked up since the Ace-Benjamin Moore announcement. I’m excited to have been invited to attend the Orgil show in Chicago next week! This will be my first hardware show! I’ve got a lot to learn and I’m looking forward to sharing the experience with you!