Iron Sharpens Iron
Performance 20 Groups Spur Businesses Forward
Image: Moviebirth / Adobe Stock
When I owned my store/range, the second-best business decision I ever made was joining a Performance 20 (P20) Group. The first? Well, that would be selling my facility. (I’m joking, of course.)
A P20 Group is a collection of like-minded business owners who get together to improve their business practices. The firearms model migrated over from the auto industry. Although it’s called a “Performance 20 Group,” there are often five to 12 members per group in the firearms industry.
Origins
The first firearms P20 Group was launched in 2006 by Richard Sprague, owner of Sprague’s Sports in Yuma, Ariz., and Miles Hall, then-owner of H&H Shooting Sports in Oklahoma City. This original group is still meeting. Previously, Sprague was in a P20 Group in the auto industry, as his other business venture sells truck caps and accessories.
Experiencing the benefits of being in a P20 Group, Sprague decided to reach out to some other owners on the firearms side about starting one. Sprague and Hall contacted other business owners they perceived as being good operators (somehow, I passed the sniff test and was a founding member of this group), and held an informal get-together at the 2007 SHOT Show in Orlando, Fla.
Nuts & Bolts
Most P20 Groups meet twice a year (in person) and submit quarterly reports to receive a breakdown at the end of each quarter. Each group has a moderator familiar with successful business metrics to keep the group discussions on point and moving along. (Contact information for two of them is at the end of this article.)
Each quarterly report is large and divides each business into sizable segments. They are then broken down into categories covering everything from general business overhead and range usage to more detailed inventory and line-item data.
These metrics are displayed with each member’s figures across the pages of the report. A store’s position on each page (left to right) changes by its performance numbers for a particular metric. For example, if your store is on the left side of a page, you’re doing better than the group average; if you’re on the right, you’re behind the group average in a particular area.
Seeing everyone’s numbers on one page really puts everything in the open. Although at times it’s painful to see where you land, it offers opportunities to discuss ways to improve your performance in a particular category with the group. For example, Hall was doing much better than I was in holsters. I could see his numbers and get details from him on how he excelled — and then implement them. When the next report came out, I could see if my store had improved.
What Do You Gain?
The impact of being in a P20 Group was monumental for me: I went from being a gun peddler to a businessman. Before being part of a P20, I was all about the top-line number — how many guns could we sell, what kind of advertising and great promotions could we execute, etc. I was a prime example of shoveling the coal and not steering the ship.
Being in a P20 Group forces you to slow down and look at your business from a 30,000-foot view. I’ll never forget looking at the numbers before the first meeting. One of the reports breaks down the percentage of sales dollars versus the percentage of inventory dollars per category — the closer these two percentages are, the better you’re managing your inventory dollars.
The first report showed 33% of my $800,000 in inventory was tied up in handguns, which were 35% of my sales dollars. Looking at this alone, I thought I had a good handle on my inventory dollars. However, it changed drastically when I got to the shotgun category — which was 10.8% of my inventory and under 1.7% of my sales. It doesn’t take an inventory specialist to understand how messed up that was.
Jeanelle Westrom, owner of Davenport Guns in Davenport, Iowa, had this to say about her membership in a P20 Group.
“After sitting in multiple meetings with others involved in a P20 group over the years and hearing about how beneficial it was to them, I jumped at the opportunity to join the group Dick Abramson and the USCCA were starting,” she recalled. “Everyone involved is successful in their own right. The benefit of having a group of folks across the country to access when issues arise is priceless. Based on what I’ve learned in my P20 Group, I’ve changed the way we look at marketing, added new suppliers and even changed how I reward employees.”
Another significant advantage I found in being in a P20 Group is the discussions outside of the actual meetings, which were centered on problems and issues I was dealing with in my business. These conversations tended to be much deeper, focusing on profit margin, inventory turns, engaging employees or conversion rates.
An additional benefit — relating to what Westrom observed above — is you have access to the other P20 Group members year-round. Problem-solving an issue? Call your fellow members and learn how they handled it. Unsure if a supplier is giving you the best price, an insurance provider is making you jump through more hoops, employees requesting new benefits or need direction on which buy group is best for you? Answers to all are available from successful peers.
The Other Side
It can’t all be good, though, can it? Well, there is a lot of work involved in getting the reporting together four times a year. Each member must configure their reports exactly to the group’s particular formula, which can be very time-consuming. The struggle of reporting coincides with how easy it is to get the data out of your POS (Point of Sunshine) system. Some, like Axis, are set up with the reporting mimicking much of what a P20 Group requires already. Other systems will take more effort.
In order to have productive discussions, all members need to report all figures accurately and timely. Nothing can sink a group faster than not having accurate, timely reporting. This gives pause to some wanting to join, as they’re not willing to share their true numbers. I will say, it is a little nerve-racking knowing everyone in the group is seeing your numbers — it’s kind of like sitting around with your friends in your underwear. But, vulnerability is one piece that binds the group together.
Besides reporting, there’s a time and cost commitment. Ownership is required to attend two on-site meetings annually, usually held at one of the member’s locations or at the site of a strategic partner in the industry.
The on-site meetings are extremely valuable, especially when you are the host facility. Hosting a meeting is similar to having a board of directors tour your operation (with all the stress as well) and do a deep dive on your business. Fellow members will interview key members of your staff for insight, examine departments and look over your processes. Your P20 Group members are your peers — you all own successful businesses in your industry, providing unfiltered feedback. Think of how much expense would be incurred just to get these experts on-site.
Mark Gore, president and co-owner of Black Wing Shooting Center in Delaware, Ohio, has been a member of the industry’s original P20 Group with Sprague for almost two decades. He shared the value membership in such a group brings to his operation.
“On top of sharing detailed financial information and best practices, we drive substantial value in having this group of peers in our industry we can lean on for advice, expertise and experience,” he said. “When we run into difficult situations or have a big decision to make, we have a quasi board of directors we can ask for guidance.”
Worth Exploring?
Jeff and JJ Poet from the legendary Jay’s Sporting Goods in Michigan (with two locations, each 90,000 sq. ft.) joined a P20 Group after 45 years in business. Jeff shared the impact it has had on his store.
“Few things have had more of a positive impact on our overall operation and bottom line than joining a P20 group,” he stated. “We have gained a deeper, more comprehensive understanding of our business metrics, which allow us to identify problem areas that had historically gone undetected or overlooked.”
He continued, “This new perspective has prompted improved strategy development as well as implementation which has significantly improved our decision-making, execution and profitability.”
It turns out, meeting with some of the best minds in the industry sharpens everyone’s business acumen.
“Most importantly, the exposure to and collaboration with some of the top-performing retailers in our industry has positively influenced our performance by providing a level of accountability previously missing at a peer level for Jay’s Sporting Goods,” Jeff said. “Simply, joining a P20 Group is one of the best business decisions we’ve ever made.”
