In any retail business, by far the largest expense is wages and training. Want proof?
In an article by Erin White, published in The Wall Street Journal, Feb 17, 2005, Domino's Pizza says:
"High turnover hurts the bottom line. It costs money to recruit, hire and train people, and undercuts service when inexperienced employees don't work as efficiently. It costs Domino's about $2,500 each time an hourly store worker leaves and about $20,000 each time a store manager quits, the company estimates."
Since retailers typically average a turnover rate of approximately 110% or more a year, you can see how quickly your profits can be eaten up. At fast-food chains, rates as high as 200 percent a year for hourly workers aren't unusual, so the costs of employee turnover are even higher!
In the first couple of years in business, that could mean the difference between staying in business and losing your life savings. Especially when you consider how long it takes to build up a good customer base!
You don't have to spend a dime to realize that kind of savings. Just invest some time in training yourself in ways of relating to employees.
Your training will pay off in:
1. Lower staff turnover rates;
2. A more enjoyable work environment;
3. Lower hiring expenses;
4. Happier employees;
5. More loyal customers.
Each of these points is inextricably linked with the point preceding it, as well as the one following it. You have a more enjoyable work environment by believing that employees are a valuable asset to the business rather than an expense.
There's not one person on this earth that can run a retail business and succeed by doing it all themselves.
Try it sometime and you'll quickly learn that employees are an integral part of your business.