Store #: For Month Ending: GM:
Customer Growth: Goal 3 months from this month end:
a) Customer Count:______Growth:_____ Customer Count:______will require: ______deliveries / month
b) Were customer deliveries at least 10% of the beginning customer count? (Goal = greater of 10% or 100)
Yes No Actual %: Improvement Plan:c) Were customer returns less than 3% of the beginning customer count?
Yes No Actual %: Improvement Plan:d) Were customer charge-offs less than 1% of the beginning customer count?
Yes No Actual %: Improvement Plan:e) Discuss one thing in this area that your store can do better than it’s doing now? ______
Non-renewals and Percent Collected:
f) Was closing Non % (Aaron’s %) after charge-offs less than 39.9%?
Yes No Actual %: Improvement Plan:g) Was percent collected greater than 95%?
Yes No Actual %: Improvement Plan:h) Discuss one thing in this area that your store can do better than it’s doing now? ______
Gross Profit and Inventories:
i) Was Inventory Depreciation as a percent of “Potential revenue + ASP” less than 31%? (From scorecard)
Yes No Actual %: Improvement Plan:If not, think about possible reasons: (1) Potential Lease Income too low vs. available inventory, (2) Available Inventory or inventory out on service too high, (3) Previously leased items discounted too much, (4) Too many 18-24 months agreements vs. 12 months.
j) Were Write-offs as a percent of Net Revenue less than 2.5%?
Yes No Actual %: Improvement Plan:k) Was the original cost of Available inventory less than $115,000 (or what your RM set $ ______)?
Yes No Actual $ Improvement Plan:l) Discuss one thing in this area that your store can do better than it’s doing now? ______
Pretax Profit and Expenses:
m) Did the store meet its profit forecast for the month? Forecast $______
Yes No Actual $ Improvement Plan:n) Is the store on track to meet its profit forecast for the quarter? Forecast $______
Yes No Actual $ Improvement Plan:o) Were Salaries, Wages, & Overtime less than 18% of Net Revenues?
Yes No Actual %: Improvement Plan:p) Compare other controllable expenses (below) with the Forecast Target and explain variances.
Expense Description / Actual $ / Forecast Target $ / Variance Fav (Unfav) / Comments and ExplanationsTruck Expense
Gas & Oil
Office Supplies
Store Supplies
Postage
Meals & Entertainment
q) Discuss one thing in this area that your store can do better than it’s doing now? ______
Comments:
a) Customer Growth is good in stores. This drives revenue, of course, but it also drives morale, camaraderie and other motivational factors to help each store be a happy ship.
b) Mathematically, if a store hits the averages on average length of agreements, returns, payouts, and writeoffs, it can grow customers only if the monthly deliveries exceed 10% of its beginning of the month customer count.
c) 3% is our target on returns. Most stores are closer to 4%. If a store reaches this goal and has low writeoffs, it will have higher percent collected, higher customer growth, and more repeat customers.
d) Customer chargeoffs of 1% will result in dollar writeoffs of about 2.5%. If a store hits its target on returns and writeoffs, it is healthy if its customer count is around 700 or more. It almost certainly will be profitable at these levels.
e)
f) Non Renewal percent aka Aaron’s percent, is not really a percent. It is a weighted scoring method that weights older nonpayers more heavily. The target is 39.9. If this is kept in line by collecting instead of by returning or charging off, then percent collected will be high, leading to more profitability. The combination of Aaron’s percent, Returns, and chargeoffs (along with “new money” from new customer deliveries) produces the percent collected.
g) Percent collected is calculated as follows: (1) Denominator is the Sum of Lease revenue for all active agreements at the beginning of the month; (2) Numerator is the sum of (a) payments received on active agreements during the month and (b) payments received on new customer deliveries. This is all on a cash basis. If we collect next month’s payments on the last day of this month, then it is considered this month’s revenue.
i) Inventory Depreciation percent is Inventory depreciation expense divided by Potential Lease Income plus ASP (Aaron’s Service plus, usually 10% of Lease rate but cannot be charged in some states, so I add it so all of the stores will be comparable). This is the key number on inventory efficiency. Items that impact this number are listed in the box in the form.
j) These are dollar writeoffs. Usually if customer chargeoffs are kept at 1%, this number will be below 2.5%. There are exceptions if too many new big screens, for example, are being leased to customers that are too risky.
k) Because our stores are all about recurring revenue and we are only, at most, one week away from a delivery, this number can be $115,000 original cost no matter the size of the store. Our very busiest stores may need a little more.
m) These forecasts are coordinated quarterly with the District Manager.
o) This is the minimum goal for all stores around 700 customers or more. It’s impossible to achieve this for the smaller stores.
p) Straightforward variance analysis for other controllable expenses.