Business Owner Question: I am running a small retail operation and my wife and I are able to take a salary out of it by working long hours and the business just about breaks even. We are beginning to tire and are looking for some inspiration.
Reply: I meet people in your situation quite a lot who have got their shop to a sales level which makes it barely viable for them to take a salary out of it, but leaves nothing left over. Usually, as you describe, long hours go hand in hand with this model.
I can give you lots of recommendations, however, a lot depends on your point of view and how willing you are to re-energise the business and yourselves. I could, for example suggest that you embark on a programme of promotional activity, improving the look and feel of your shop and generally stimulating your customers to a higher level of activity, however that is going to require some funding and certainly more energy.
It sounds like the business has got a little stagnant and you both are stuck in a slight rut. That is not going to change unless you do something. It would be worthwhile putting in some energy in the short term to allow you to drive sales and profitability upwards and possibly reach a point where you could employ someone so at least you could work more reasonable hours. I understand it is tiresome after such a long time, but allowing yourself and the business to stagnate will only worsen the situation.
You should carry out an analysis of the businesses’ current spend and future cash flow forecast. By doing this you could potentially allocate some cash to marketing activities or to employing an extra person to give you a break from the business.
You don’t have to be a big, high-tech company to reinvent your business. In fact, the smaller and leaner your business already is, the faster you can shift gears and zoom back into action.
Sit back and take a cold, hard look at your strengths and weaknesses and possible markets. Ask yourself the hard questions first: Do customers still want and buy the same type of products or services you sell? Have industries and styles changed since you started business? Have you kept up with the changes? If not, what changes should you implement to make your business competitive again?
Do you need to develop new products or services? Don’t guess at what customers want and will pay for. Analyse your existing sales and talk to living, breathing prospects. What do they need? What can you provide? What’s the best way to deliver solutions to them? What’s going to bring in the most profit?
Is there any particular niche that buys regularly from you now? If so, consider how you can bring in more of the same types of customers, and what other merchandise they’d be likely to buy.
Finally, remember why you started the business. Money is commonly fought about in business, but keep in mind that the business is there to make your life overall better. You didn’t go into business to make your lives worse.
