Well, neither did I until September 2006 when I opened my second business, a delicatessen in the Southside of Glasgow. But plans had started well before this and like many situations in business, it wasn’t exactly what I had planned to do.
So, before we start, I should give you some background:
At the beginning of 2006, I set out to start a new business project. I had planned to open a soup wholesale company to supply food suppliers with fresh soups who would in turn supply food outlets. So it started with researching the market, made a business plan, registered the company and set up suppliers and a main client. I viewed suitable premises, calculated operations, carried out projections and other financial plans. This took a few months. While researching recipes, I started on an idea of opening a soup deli. This would be deli centred on many soup varieties. After meetings with clients, I quickly realised that my profit margins would be quickly squeezed making cashflow a problem. The initial start up cost for industrial soup making equipment would drain crucial operating costs. So, I decided before I spent any significant money to pull the wholesale operations. It seemed cashflow was more important and that mean’t a more retail operation.
So here we go;
- there’s actually a good chance you already know about retail. If you have come from hospitality, then many skills you have learned will equip you well. If you have risen through promotion, you will more than likely have had to manage people, control budgets or stock, and be capable of developing business. These are all important attributes. Getting down to nuts & bolts, there are many ways to do be successful, not just only one sure fire method. When it comes to margins and profits, opinions can vary differently between professionals. What I would say is research your market well, look at competitors, market value and supplier prices. But be careful and have reasons for your strategy. It’s important because once it’s out, that it, you will be judged on that figure. But don’t just use same prices as competitors, their costs will more than likely be different from yours. It’s a balance between making it work for your business plan and what customers are prepared to pay, so keep that in mind.
- Manage suppliers carefully. You may need credit terms for main suppliers, so it’s important to get the best deals. Be shrewd with orders and make sure whoever spends your money knows exactly what’s at stake. Building strong relationships and being professional no matter how difficult times can be. Always probe suppliers, delivery teams for deals, top sellers and insist on best dates possible. As a small business, it can be tough when bigger companies seem to get the best terms, you got to outsmart them.
- Managing staff and hiring the right staff is key, especially in small businesses. You have to good judgement calls and show you can lead a team, keep them focussed on your vision. This can be challenging, with a small budget, you’ll have to find way to reward that isn’t always numeric. This where your creative side comes in. If you’ve managed in previous roles you will more than likely have had to implement schemes and you will know what works and what doesn’t. So now it’s your business and your money being used, bring out your best. Make sure your up-to-date with employment issues, training and know your staff needs. Be firm but fair.
- Cashflow – cash is king. It’s true, especially in these times. So, it’s important to understand not only the basics but how to see problems before they start. Really get to know your daily, weekly & monthly costs. Measure them and keep tabs on them. If costs are rising but turnover is not then alarm bells should be ringing and you must react. Get the best for what you spend. Use the right tools for the right job, that means if sudden costs appear that your not prepared for, then find the right payment method to ensure cashflow safety.If perishables or short dated products are causing headaches, then think smarter. Use sampling, sense experiences to lure customers to your products.
- Sell. Make your retail space as buyer friendly/easy to buy as possible. Be creative but with a purpose, every inch counts. Uping your POS is a good way of uping spend. Add new lines, excite customers with your knowledge and let them buy into you. Make sure products are priced and look their best. Queue efficiency will make sales count.
- Have a good complaints plan. Make sure your staff know how handle complaints well, for customers they are a reflection of you. Always act professionally and react to ensure a positive outcome.
- Market your business well but not expensive. Be shrewd and don’t get carried away with ‘branding’. Use relevant social media platforms well, keep updated and be careful. Be open to new opportunities.
- Retail is like any other business. You buy or make stuff and sell it on to make a profit. So do it and bring all your clever ideas. Make sure your registered & legal for your chosen trading activities, invite authorities in beforehand.