Business is difficult this year, and the open source is not hopeful for the time being, and it has to be managed from the current.” i fear that since 2026 i have heard the most from the owners of the retail chain。
But is this simply a reduction in procurement costs and deduction of staff benefits? Big mistake! Many times, real “cost assassins” in an enterprise are hidden in management and human effects that you cannot see。
Today, we're here to reveal this secret and tell you how to find the hidden costs and spend every penny on the blade。
I run 10 shops, but i feel like i'm raising 10 golden swallowers
A few days ago, he gathered with a friend who made a chain of fruit brands. His name was mr. Li. General lee's company has grown rapidly, operating more than 30 straight-camp shops in just three years. The outsiders look like they're infinity, but he's sad。
"the thing i regret most now is that the store is open too fast." lee lighted a cigarette and said, "the more the shop, the more the management, the less the profit. I don't feel like i'm running a company, but i'm raising a bunch of "golden-beasts," and every day i open my eyes to all kinds of costs, but the sales are not going up."
He gave me a few examples:
A 100-metre-square-metre door shop with a director plus four shopkeepers. But every morning and night, the peaks are too busy to get any rest. The shopkeeper felt that it was not motivated to do anything less than work on fixed wages. The loss rate is particularly high and hr at headquarters is recruiting and training every day, at a cost that alone cannot be achieved。
Headquarters has designed complex formulas to stimulate, using excel for half a day. However, policies that reach the door often change. The shopkeeper either failed to understand it, was lazy to implement it and was ultimately paid the usual salary. Hq's exhausted and the store doesn't feel anything。
To manage more than 30 shops, he has several levels of regional manager, city manager and operations director. And? More layers, slower communication, more bureaucracy. A simple promotional campaign, with a one-week process from the door shop to headquarters approval. When you're ready, it's cold. Many of these highly paid managers have not only failed to solve the problem, but have become itself。
The plight of general li is a typical example of many retail chains today。
In an era of growing competition in markets and slower growth in industries, the past eras in which broad-based expansion had been profitable had been lost. In the second half of the competition, it is not the speed of opening a business, but the precision of internal management and the degree of organizational effectiveness。
Your throttle may be killing your company
When it comes to reduction efficiency, the first reaction of many bosses is to “cut”. Cutting procurement costs, marketing costs, wages and benefits for employees. But such a simple and brutal “suspension” often has disastrous consequences。
You think it's cheaper to compress the cost of the procurement, but it may have sacrificed the quality of the product, eventually damaging the brand credibility and losing the core client。
You think it's a saving to lower the wages of employees, but you're actually forcing off good employees, leaving behind a mediocre generation, leading to a fall in the quality of services and ultimately affecting sales。
This “sustained” thinking is tactically diligent and strategically lazy. It avoids the real core of the problem: does your cost structure really make sense? Did your human costs really translate into effective productivity
We have to subvert a traditional idea: costs are not as low as possible. Effective costs are investments, ineffective costs are liabilities。
The 20,000 monthly salary paid to a shop that can generate 100,000 profits is an efficient investment; the 8,000 monthly salary paid to a shop that can only generate 10,000 profits is an expensive liability。
So the real efficiency gain is not to cut off the “investment” expenditures, but to remove the “ineffective costs” hidden in the tissue body — people, things, processes that do not produce any value。
Reaction to a chain of convenience stores: from pay packs to everyone
In the south china region, there is a chain of brands of community convenience stores called "sweat every day" (alias)。
In 2023, they faced the same expansion bottlenecks as general li, and the more doors, the greater the losses. At that time, they had made a bold pay reform in which the core idea was a closed-door profit package, combined with the ppv concept of quantifying pay, turning every employee into an “operator”。
This is the case:
Headquarters thinness, delegation of authority:
The first thing they did was to cut off the intermediate level of the regional manager and hold the door shop directly accountable to the operations centre at headquarters. This builds on the successful experience of enterprises such as masha's to improve efficiency by reducing management levels. The role of headquarters, moving from a “manager” to a “server”, provides supply chain support, brand marketing and data analysis, rather than directing the day-to-day operations of the door shop。
Promotion of door shop profits:
Based on the geographical location of each shop, size, historical sales data, etc., the headquarters approved a base “profit return index”. As long as the door shop fulfils this target and exceeds part of the profit, the head office and the door shop team are divided in proportion (e. G. 4:6). This means that shopkeepers and shopkeepers are no longer mere workers, and the profits of the shop are directly linked to their own income。
Staff pay ppv to break the pot:
Within the door shop, instead of simply splitting the bonus to the head, they introduced ppv to quantify pay. The manager will work with the employees to quantify and price all work in the store:
Cash collection: prices based on scanned merchandise items (e. G. $0. 05 per item) are waived for errors. (b) uplifting: the price is based on the quantity and type of goods on board. Immediate processing: successful promotion of a reimbursable product with additional incentives. Member card processing: $10 for every successful one. (c) sanitation: daily check-ups have been carried out with a fixed value. The final income of the employee = the basic security wage + the personal value wage + the profit-sharing of the door shop。
Once this mechanism was put in place, something amazing happened:
Previously, five people were needed in a shop, and now three highly qualified staff could handle it and the quality of services was higher. Because everyone wants more work and more money. The staff will take the initiative to speed up cash collections during peak periods, actively managing and marketing membership cards during peak periods. The human cost of the door shop has moved from “fixed to “flexible” expenditure, which is closely linked to sales. There was a pilot shop, and the reform resulted in three individuals performing the work of the original five, but the average salary of the three individuals was 40 per cent higher than the original five。
The shopkeepers started to care about costs spontaneously. The last staff member who leaves at night will take the initiative to check whether all lights and air conditioners are off. The lack of interest in the forward-looking goods before the expiry of the term would now be used to sell them at a discount, since each reduction in losses would mean an increase in the profits of the door shop and an increase in its own dividends。
The mechanism, like a filter, automatically screens the most capable and active employees. Good shopkeepers and shopkeepers earn far more than they do, and naturally stay. And the workers who live in the middle of the day can't stay because they're low-value and low-paid. This addresses the core pain of high brain drain rates in the retail sector。
In the end, not only is the daily loss and loss positive, but single-shop profitability and per capita sales have reached industry-lead levels. They did not press suppliers, nor did they deduct staff benefits, but simply unlocked the huge potential within the organization by changing the distribution of benefits mechanism。
Three to find the cost assassin, from the manager to the operator
The “new daily” cases provide a replicable set of hits for all our troubled retail chains. At the core is a shift in management thinking from the former “managers” to the heart of the operator and the value of the business。
First move: division flattening -- cutting off the extra voice. Box
Isn't there too many layers to look at the structure of your company? From first-line employees to bosses, how many reports do you need? Each level of management is a potential cost centre and efficiency bottleneck. Examples of past failures like carrefour warn us that unreasonable levels of governance and decentralization can lead to disaster。
Be daring to organize “skinned” by cutting off middle posts that are responsible only for “uploading” without creating real value. More powers and responsibilities are delegated to the front-line stores closest to the fire。
Step 2: bundling of interests - from “doing for the boss” to doing for oneself
Whether it is a “door shop profit-package” or a “door shop partner” system, the core is to bind the door shop's performance to the depth of the employee's personal income。
It should be noted, however, that such bundles must be based on financial transparency, full delegation of authority and clear rules, otherwise they can easily become, as in some cases of failure, a recipe for starvation and, ultimately, mistrust and loss of staff。
Step 3: quantification of work (ppv) — a clear return on each payment
Within the broad framework of the bundle of interests, the doorshops must be allocated twice under the ppv model, so as to avoid “rich monks and poor husbands” or large internal meals。
Summary
Bosses, the business environment in 2026 no longer allows us to waste anything. The biggest waste within the enterprise is human waste and the waste of management costs。
Stop the unhelpful “tactical swings”. The real efficiency gains are a management change that goes deep into the organizational marrow. It requires that we move from a high “manager” to a “mechanical designer” who understands the rules of design and shares the benefits。
Through organizational flattening, benefit binding and quantification of the three axes, you will no longer need to stare at the staff on a daily basis, because a powerful benefit-driven mechanism will automatically screen, motivate and empower your staff。
And then you'll find that your company is no longer a group of gold swallowers, but a vibrant fleet of thousands of small bosses. This is fundamental for smes to be competitively neutral。
The market will not wait for us to find out. Are you still worried about the business's profitability? Don't hesitate to answer the word “performance”, and i'll give you a free copy of front pay performance, internal partners studying videos and periodicals
This programme has the distinctive characteristics of being quick and innovative, as a blade to help you in your business。
