Running more than one store: how to keep control of stock and cash

On this page

1. 1. Sort out the paperwork for each location
2. 2. Set up every store the same way
3. 3. Put a manager in charge and write down the limits
4. 4. Control who can do what
5. 5. Keep cash separate and visible
6. 6. Keep stock under control across stores
7. 7. Price changes that reach every store
8. 8. Watch every store from a distance
9. 9. Keep the books by store
10. 10. Before you add the next store
11. Where Advantage fits

With one store, you are the control system. You see the drawer counts, you know which delivery came in short, and you notice when the cooler runs warm. With two or more stores, you are always away from at least one of them. Control has to come from routines, records and access rules that work when you are not there.

This guide covers what to put in place, in order. If you are about to add your second store, start with our article on running a second store, then use this guide to keep stock and cash under control across all of them.

Rules for licenses, taxes and employment differ by state and city, and stores in two states face two sets of rules. Ask your accountant and attorney before you decide how to set up each new store.

1. Sort out the paperwork for each location

The SBA says that getting licenses and permits in a new location is much like getting them at home: check with any federal agency that licensed you, then with the new state, county and city. If the new store is in another state, you may need to register your company there too, and you will usually pay taxes and fees in both states.

Many permits belong to one address, so do not assume your first store’s permits cover the second. Two federal examples:

• SNAP. A SNAP permit is valid only for the location and owners on record. Each store location must be authorized on its own.
• Alcohol. TTB requires a retail dealer registration for every location that sells alcohol.

Ask each state and local office the same question about tobacco, alcohol, lottery, food and scale permits. Ask your insurance agent the same about each policy, and put every renewal date for every store on one calendar.

One company or several

Some owners run every store in one company. Others form a new company for each store. The IRS says you generally need a new Employer Identification Number when you change your company’s ownership or structure, not when you change its name or location. A store added to the same company keeps the same EIN, and a new company gets its own. The right choice depends on liability, taxes, loans and licenses, so decide it with your accountant and attorney.

Employees in a new state

If a store is in a new state, its employees fall under that state’s rules. The SBA notes that state employment taxes vary and often include workers’ compensation and unemployment insurance. Check the new state’s minimum wage too.

2. Set up every store the same way

Comparing stores only works if they are set up alike. Decide the setup once and copy it everywhere.

• The same departments and item names. If one store files energy drinks under beverages and another under snacks, department reports will not compare.
• One master item list. Add a new item once, then send it to every store, so the same barcode means the same thing everywhere.
• Pricing rules, with exceptions on purpose. Use the same prices unless a store’s street really needs something different, for example for fuel or tobacco against a nearby competitor. Write the exceptions down.
• The same routines. One opening checklist, one shift close, one receiving routine and one count schedule, written down and used at every store.

3. Put a manager in charge and write down the limits

Each store needs one person in charge when you are not there. Give each manager a written page that says what they decide alone and what comes to you. For example:

Manager decides	Comes to you
The weekly schedule and covering call-outs	Hiring and firing
Refunds up to an amount you set	Refunds above that amount
Orders from regular vendors, up to an amount you set	New vendors, and orders above that amount
Moving staff between shifts	Price changes outside your pricing rules
Small repairs	Any cash difference above an amount you set

Talk with every manager on the same day each week, using the same agenda: the week’s numbers, problems, staffing and anything waiting on you. Train at least one experienced clerk who can work at any store, so a call-out does not land on you.

4. Control who can do what

Shared logins make every record meaningless, because you cannot tell who did what.

• Give every person their own login. The SBA’s cybersecurity advice is to make sure each employee has a separate user account with a strong password, and to audit access regularly so former employees are removed.
• Give access only to the stores and screens each job needs. The FTC advises businesses to restrict access to sensitive information to the people who need it to do their jobs.
• Remove access on the day someone leaves.
• Keep a record of who changed prices and who edited a closed shift, and read it when a number looks wrong.

5. Keep cash separate and visible

Cash is easy to blur when stores share an owner. Keep every store’s money on its own track.

• Each store closes its own shifts and makes its own deposits, into its own bank account where you can.
• Every shift records the count, the safe drops and the over or short, with the clerk’s name. Our cash over/short calculator shows the math.
• Set the same drop limit and safe rules at every store, and know who holds each safe combination.
• Never move cash between stores without a slip signed at both ends, and record it as a transfer, not a sale or an expense.
• Match each store’s deposits to its bank statement every week.

A worked example with made-up numbers

On a busy Saturday, Store A sends $500 in change to Store B and nobody writes it down. On Monday, Store A’s safe count is $500 short, and Store B’s safe holds $500 more than its records say. Two managers spend a morning looking for a theft that never happened, and a real short that week would be hidden inside the noise. A one-line transfer slip, recorded at both stores, prevents all of it.

Our article on safe drops, loans and bank deposits covers the daily cash routine.

6. Keep stock under control across stores

Once you have two stores, stock starts to move between them: a case of soda to cover a shortage, cigarettes before a delivery, extra beer for a busy weekend.

• Write every transfer down. Use a transfer slip with the items, quantities and cost, signed by both stores. Record it as stock out at one store and stock in at the other. Stock moved without a record looks like shrink at one store and a gift at the other.
• Decide who orders. Some vendors work best ordered centrally, others store by store. Decide for each vendor and write it down.
• Receive the same way everywhere. Count against the invoice before the driver leaves, at every store.
• Count the same items on the same schedule. Count high-risk items, such as cigarettes, at every store on the same days, so you can compare shrink between stores.

Compare purchases with sales, store by store

Example with made-up numbers: Store A and Store B each buy about 60 cases of a 12-pack of beer a week. Store A’s register sells about 59. Store B’s sells about 50, week after week, while its purchases stay at 60. Ten cases a week are missing from either the register or the shelf. A count, a look at Store B’s voids and department-key sales, and a check of its transfer slips will show which.

Our retail inventory management guide covers counts and shrink in more depth.

Buy as one, record as many

More stores can mean a stronger hand with vendors. Ask each vendor whether it prices by account or by total volume, whether it will deliver to every store on its route, and who your contact is at each store. Whatever you negotiate together, keep each store’s invoices, credits and returns separate, so each store’s costs stay real.

7. Price changes that reach every store

A price change that reaches one store and not another causes two problems: a margin you did not plan, and a customer who sees two prices for the same item.

1. Make price changes in one place, for every store that should get them.
2. Send them to each store’s register, and check that each register took them.
3. Print and hang shelf tags at each store the same day.
4. Have each manager scan a few changed items at the register and confirm the price.

Inspectors check this too. NIST says all states have laws or regulations on price accuracy. Many state inspectors use a NIST procedure, and under it a store fails when more than 2% of the prices checked differ from what the register charges.

8. Watch every store from a distance

You cannot be everywhere, so the numbers have to come to you on a schedule.

Every day: each store’s sales, cash over or short by shift, the deposit, and voids and refunds.

Every week: one sheet with every store side by side.

Number	What a gap between stores can mean
Sales by department	A pricing, stocking or staffing problem at one store
Gross margin by department	Different costs or prices, or a missed price change
Over or short by shift	A cash handling problem on one shift
Voids and refunds	A training issue, or someone covering a theft
Shrink on counted items	Receiving errors, unrecorded transfers or theft
Labor hours and labor share	Scheduling that does not match traffic

Our labor cost calculator works out labor share and sales per labor hour for any week.

Every month: a profit and loss statement for each store, compared with its plan.

Visit each store on a schedule, and sometimes off it. Regular visits keep you close to the crew. A visit nobody expected shows you how the store runs on an ordinary day.

When a number looks wrong

Use the same routine every time, so managers know what to expect:

1. Check the record first: a missing invoice, a transfer not entered, a shift closed late.
2. Ask the manager what happened, with the numbers in front of you both.
3. Agree on a fix and a date, and write both down.
4. Check the same number the next week.

A gap that is only paperwork is quick to fix. A gap that keeps coming back is the one worth your time.

9. Keep the books by store

• Give each store its own profit and loss statement: sales, cost of goods, payroll, rent, utilities and card fees.
• Pay each store’s invoices from that store’s records.
• Split shared costs, such as your own pay or your accountant’s fee, by a rule you write down, for example by each store’s share of sales.
• Keep records long enough to prove your taxes. The IRS says to keep records for 3 years in the usual case, longer in some situations, and employment tax records for at least 4 years.

Separate books show which store is carrying the other. Mixed books hide it.

10. Before you add the next store

Run down this list first:

• Every store runs the same close, receiving and count routines without you.
• Every store has a manager with written limits, and you trust them.
• You can see every store’s numbers each day without visiting.
• Cash and stock transfers are recorded at both ends.
• Your accountant has reviewed a profit and loss statement for each store.

The SBA suggests that before you expand, you update your marketing plan and build a forecast of costs and revenue for the new location. Our guide to small business cost control can help you check each store’s costs first.

Where Advantage fits

Advantage puts every store you own behind one login, on the web and on the phone app. A store switcher moves you between stores, and each report covers one store. Roles and privileges are set store by store, so a manager can open only the stores they run, and the Events log shows who changed what, and when, at each store. Each person chooses the phone alerts they get from each store. See Advantage for multi-store owners, one login for every store and the phone app.