Retail Business Advice.
We’ve all thought about it, a few have tried, many have failed.
Most of us have dreamt at some time of chucking in the job to start-up our own business. And often that dream takes the form of setting up a shop. It seems as though there is a shop for everything, and a lucrative niche to suit every potential shop owner. What’s more, you can be your own boss and move out of the city to a country town. It might be hard work, but for your own ends.
According to government records, there are now more new start-ups in retail than in any other sector, and perhaps surprisingly for a nation that had long regarded shop keeping as rather an inferior profession, a quarter of those taking the plunge come from managerial or professional ranks.
But, there’s a risk that setting up shop is becoming a sort of modern – day equivalent to seeing the streets paved with gold, a lot of people who’ve never been in retail think they’ll open a little shop. It looks easy, but many people get their fingers burnt. A lot of people have lost a lot of money.
I’m not advising people to steer clear of retail or owing a shop.
Everyone has seen the remarkable successes of Body Shop and a plethora of other new shops that have taken local high streets by storm.
But, it doesn’t alter the fact that 40 per cent of business start-ups collapse within four years – and the shop is no exception.
To succeed requires a more cautionary than cavalier approach, and however much you feel there’s a market for the products you wish to sell, a clear- headed analysis is paramount:
• Is the market you’ve chosen large enough to give you a living;
• Who is the competition;
• What are the best profit margins you can achieve;
• How expensive will the right location be;
• Can you afford any staff or can you cope alone;
• Will you expand to achieve greater operating efficiency?
If you are after an easy life, forget it. The hours will be long; the weekends working.
DOS AND DON’TS
- Think hard: why do you want to be self-employed? You must be ready to work very long hours running your own shop.
- Take a course in financial management. Very important – VAT, PAYE, PROFIT AND LOSS ACCOUNTS, CASH FLOW, cash is the lifeblood of a business.
- Research your market carefully. Who are your customers? Is the market likely to change?
- Draw up a realistic business plan; remember that profit is what you’re left with after paying for everything. Don’t forget your business rate, VAT if your sales is over £83,000 per year, minimum wage – it is criminal to pay any staff either full-time or part-time less than the minimum wage, National Insurance Employer contribution. Employer Insurance etc.,
- Shop around to raise your cash. Interest rates vary widely.
- Read your lease very well for rent reviews and rent increases, any buy out clause? The lease is a legal document so get the services of a competent solicitor.
- Rush into it.
- Borrow money to buy all the latest technology before you know it’ll work.
- Sell on credits.
- Rush into a property. Ask yourself why the other person is selling.
- Above all prayer, prayer , prayer.