Lesson from Wal-Mart : Correction of Errors (Business Journaling)

[Vigilante]

Every executive at Wal-Mart Corporate completes what they call a "Correction of Errors" every month. It recaps the month, what worked, what didn't and what they could have done differently to achieve different results. It is somewhat of a succession plan in the event you aren't around in a year to annualize your own numbers, but it is extremely valuable. As you roll around on your own "comps" (comparable year over year sales) it is extremely useful to have a tool that tells you exactly what was happening the year prior.

1. What was happening in the industry a year ago?
2. What worked really well?
3. What new things kicked in to effect sales?
4. Were you in stock? Out of stock?
5. General observations about business conditions

So, it is one of the disciplines that the world's largest retailer taught me that we deploy in our own business. Many of you here keep a business journal. What we include in ours (a single page per month of the year) is :

• sales by week
• ASP (average aggregate selling price) by week
• Units sold
• Orders taken
• Average units per order

In addition, we will add in comments addressing questions 1-5 above, and any other observations or comments.

A side benefit is this : when selling the business, or God forbid that you died and your family needed a roadmap... there's an archive of progressive learning that is unique and private to your business that others could read and follow. The historical archive of sales per week data might prove extremely useful towards the valuation of the business.

Any of you keep a business journal? What are your best practices?

 

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[MJ DeMarco]

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