Lessons on staffing a retail shop

I wish someone had told me this stuff in the beginning

We're about to hit our three-year anniversary at my shop, and for the first time since opening, I think we're staffed correctly. For three years, I've been experimenting with job roles, shift coverage and payroll expenses, trying to find the right balance between what has to get done, who is available to do it, and how much we can afford to pay people.

When I started out in April, 2019, I assumed I could do everything myself, behind the retail counter between customers, and that I'd only need to hire people for shift coverage when I couldn't physically be at the shop. It quickly became clear that this was not the case—I needed at least one day to work on the business, not in the business, managing inventory, bookkeeping, paying rent, running to the bank, creating marketing content, and answering emails.

This only sort of worked. When I wasn’t at the store, I still had to be on-call because I hadn't empowered anyone to so much as order paperclips. This wasn't because I didn't trust people to order paperclips, it was because I could not for the life of me figure out whose job it should be to order them. Do I train every retail person to order paper clips? If they have to order paper clips in addition to working retail, shouldn't they be paid more?

Tell me: whose job is it to unpack this?

It wasn't just the paperclip problem. What if a pallet of pottery arrived on a day when I wasn't in the shop? Could the person working retail unload the freight, bring it inside, check it against the purchase order, sticker it, and merch it on the retail floor?

"No," people would tell me. "That's a manager's job. You need a general manager."

This sounds obvious, right? But when it became clear that we needed a GM, I had five part-time retail people on staff. One person was great at merchandising, so she did the displays. One person had an affinity for inventory management, so she handed re-ordering and shipment processing. Yet another person had amazing customer service skills and experience hiring, training, and shift scheduling. It was like GM Voltron. With their powers combined, I had someone managing the business, but I didn't have that manager in the form of a single person.

Clearly the answer here is to identify one person for the role and train them for the duties they're not currently doing, but that's easier said than done. We were a close-knit team, and promoting anyone meant not promoting someone else. I feared sowing discord, so we carried on like that for a while, a jigsaw puzzle of duties and people to do them, and I'd still get Slack messages saying, "We're out of paperclips."

Then Covid happened, and we opened a second location. With 20/20 hindsight, I know I should have laid everyone off during Covid, but I didn't. I gave people the option, but we had $30,000 in savings—runway to get through payroll until we re-opened—and my staff decided to stay working in swing shifts until re-opening.

Those Covid shifts carved out even more nonsensical specialty duties and exacerbated the issue of siloed responsibility without a job role to accompany it. At some point I came up with term "'take the baby' management" to describe my style, which I knew was inefficient. I assign job roles like we're passing a fussy baby to whomever has a free hand. Whatever babies you were passed at the start of the business, or during Covid, were now your permanent duty. Once that happens, it's difficult to reverse. It's a bit like creating Play-Doh shapes, then being surprised that when you didn't put them back in the canister, they've hardened overnight into something you never intended to last forever.

I think anyone can make these rookie management mistakes, but small retail shops have a unique set of challenges when it comes to staffing and job roles. Many of us are open 6 or 7 days per week, so the typical 9-5 availability expectations are out the window. Order fulfillment, for example, doesn't stop on weekends, so we have to assign daily coverage across several roles.

Clear job structure isn't as apparent in retail the way it is in restaurants, for example. We never assume that a server might also be making omelettes, but in retail, it's challenging to draw that line between front and back-of-house duties in part because retail back-of-house duties don't share the same urgency as those in a restaurant. Inventory processing can be postponed; par cooking bacon for a brunch shift can't.

Ways I messed up, ways I’m fixing it

It took me 18 months to untangle the organizational knots I created in the beginning of the business. Here are some things I learned, most of them the hard way.

• No one should work managerial or back-of-house jobs that don't start at the retail associate position. Everyone starts out training at retail, which ensures anyone can work a retail shift in a pinch.

• We promote managers incrementally. I got this idea from a friend of mine who works as executive chef in a kitchen. People move up stations one step at a time only after demonstrating at their current station that they are capable of jumping up a level. Stations, and the milestones for reaching them, are clearly defined. To that end, we're working on a tiered training system, especially for floral. Everyone starts as a retail associate, graduates to floral retail (or Floral I), then to Floral II, where they're trusted to create arrangements for delivery.

• Anyone in management must have Floral I level training. Right now managers have been grandfathered in, but we're back-training everyone so this rule is consistent. Anyone receiving management-level compensation must be able to make a bouquet, including me. (Real talk: our floral manager let me know I am still not at Floral I level. Working on it.)

• Where we can, we divide managerial duties into teams instead of assigning them to a single person. We do this by cross-training departmental roles so that every manager has a backup. For jobs like marketing and web content, because our revenue can’t support a full-time marketing and web content manager position, I’m creating cross-departmental teams that anyone can join if they would like to contribute and develop skills in those areas. This also helps me take the full load of those duties off my plate.

• I work with freelancers, but only when I can’t reasonably assign jobs in-house or do them myself. I hire freelancers to do work I’m not skilled enough to do or don’t have time for. If we have to conserve cash, I can terminate freelance relationships without affecting team morale or dealing with unemployment, but I’m conservative in hiring 1099 contractors so we ideally don’t have to do this. So I try not to hire for things we can do in-house, like photography and marketing, instead focusing on specialty skills that increase revenue. I’m currently working with four contractors for Shopify web design and development, graphic design, paid search marketing, and driving deliveries, as well as an accountant and lawyer. I use Bench* and TaxJar for bookkeeping, and Gusto* for payroll, three softwares I highly recommend for their user-friendliness and high level of customer service. (* referral links)

• We have a well-structured open and close checklist at both retail locations and are working to manage accountability to ensure everyone is following it.

• I'm working on creating a culture where regular, on-the-spot feedback is normal and expected. If a manager spots something that didn't get done, they'll call it when they see it. Managers are expected to do this in a professional way, and the team is expected to receive feedback constructively and professionally. This is challenging, because so many of the people we hire for retail jobs have had a lot of toxic workplace experience (including me)!

• We schedule structured performance reviews every six months where everyone receives a copy of their job description and assesses their own performance in each category.

• We schedule 4 staff meetings every year, once per quarter, where we talk about new processes and policies to get everyone on the same page.

• We document everything on a team Wiki. All our processes, to-do lists, job descriptions, policies, and information about the business lives in an online wiki (using an app called Notion, highly recommended) where anyone can access it at any time. This frees me from answering random questions when I'm off work like, "What's the Spotify login?" It's also a great place to manage ongoing to-do lists, so we all have insight into what's on everyone's plate.

• We schedule regular team meetings for each department: inventory, marketing, and floral.

• I keep our payroll within a target percentage range based on our current revenue — never based on projections. If we did $830k last year, it means I have up to $249k (30%) to spend in wages this year. If and when we consistently demonstrate that revenue is higher, we can increase pay.

Our current job roles and responsibilities

I’m always curious how other small retail businesses are staffed, so I thought I would share a list of what our current job roles are. This structure is really working for us for now, even though we do not currently have a general manager.

Floral department manager: Responsible for floral retail operations, ordering flowers, developing new floral product, and managing the flow of floral orders and delivery. (Full time, salaried employee)

Floral II: Retail staff capable of building floral orders for special events and for delivery (Two part time hourly employees)

Floral I: Retail staff capable of handling floral retail operations (None currently on staff, but we're getting there through training)

Operations manager: Responsible for retail training, managing the flow of inventory from one location to the other, ordering all supplies, merchandising, answering our customer service email, and all the random tasks like copying keys, printing signs, making sure there are copies of open/close checklists at both locations, and yes, ordering paperclips. Cross-trained with inventory manager so they can swap job roles for vacations. (One full-time hourly employee, exploring this as a salaried position)

Inventory manager: Responsible for re-ordering and processing all non-floral inventory, including the weekly plant shipment. Keeps back stock organized, helps with merchandising, markdowns, and maintaining the flow of inventory between both shops. Also processes all non-floral online orders for shipping and delivery. (One full-time hourly employee, exploring this as a salaried position)

Special events manager: Responsible for the business side of marketing floral for special events and weddings, as well as managing in-store events in the shop. Also develops business in both the wedding and events and corporate gift/party space. Cross-trained with floral department manager so they can swap duties when someone is on vacation. (One part-time hourly position, exploring this as part-time salary position as it involves checking emails at home)

Retail associate: Responsible for front-end retail at both locations, mostly at Proctor, where we don't handle floral operations. (Currently two part-time hourly employees and we're in the process of hiring a third—will all train for Floral I)

I'm happy to say that with this current structure, I can't currently think of a job within our organization that isn't assigned to a specific role, team, freelancer or software. We also have space to carve out a Shift Lead position, which would be somewhere between retail and manager level, someone who handles higher-level duties when managers aren’t present.

Payroll as a percentage of revenue, accounting for seasonality

Our payroll is between 25-30% of our gross revenue, and I've made some clear benchmarks with regard to revenue growth tied to compensation. I also just enacted a 5% cost of living raise for all our hourly employees because inflation is driving the price of everything up like crazy right now. This doesn't stress me out, because we're staying within our target percentage range for payroll.

But more people on salary means we don't have the ability to reduce hours to compensate for seasonal fluctuations in the business. We have to pay people the same regardless of money coming in. Our seasonality isn't too dramatic, but our slowest months are all bunched together (June, July, August, October, and November), which means cash flow becomes a critical issue every November.

Here's how I manage that.

• Training all managers for retail means that in a real pinch, we can cut hourly retail staff temporarily and fill retail with managers who, if necessary, balance retail shifts with their additional duties. Not ideal, but this is a "running the ship on low power" tactic that I have now built in to our organizational strategy. We rarely have to use it, and if we do, it's only for a couple weeks.

• I stay conservative with payroll and other expenses to try and maintain a cash buffer. This is hard, because we're servicing debt right now that's costing me money. I don't currently have a cash buffer, but we are running at a slight profit as we pay down debt, and once that debt is off the books, I'll start saving again. I like to have around $30k in savings to get through slow seasonal times.

• I worked my ass off to establish two lines of credit, one through a private company (Fundbox*) and one through a local community bank. The private lines of credit are easier to establish (less paperwork), but more expensive to borrow from. The community bank line of credit costs less but was basically like applying for a mortgage (lots of paperwork). We will only draw from the lines of credit when we need them, and aside from a $100 origination fee with the community bank, they cost us nothing until we use them, unlike loans.

The road ahead

I knock on wood any time I say anything hopeful about the business, but I am hopeful these days. I can’t believe it took me three full years to figure out staffing, but then again we never planned for a global pandemic, and I didn’t start out intending to open a flower shop or a second location. On top of all that, retail shops are particularly vulnerable to turnover, and we have not been immune. The industry average turnover rate in retail jobs is 65 percent, and in the past year, our turnover rate was one hundred percent. Not a single person who worked for me in the first week of April, 2021 still works for the business today. (That’ll be a future post for sure.) While that’s terrible on the one hand, it also means I’ve been able to exact new systems with staff who aren’t reluctant to adhere to them because they weren’t here before we put them in place. These systems, I hope, will also provide the structure and stability our previous staff didn’t have, which may have been responsible for burnout and turnover.

Hope for the future: did they really call me their “fearless leader”? See, they don’t know. And that’s a good thing.

Two questions I have for you, dear reader, which you can post in the comments or reply to directly if you feel compelled:

1. How is your retail team structured, and what, if anything, have you learned the hard way?

2. Was there anything I talked about in this post that you also struggle with? If so, what?

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