Advice needed.

[julieMD]

I started my small business one year ago it is a retail gift shop with online shop business. I started in a location just off the main shopping high street and in November (after 9 months trading) took the gamble of moving on to the high street for the extra footfall. If I had kept the business where it was I would be out of business already, there was very little footfall. It was an ill advised decision for the location for the business to set up because of the low footfall but affordable because of the 100% rates relief I qualified for. The gamble was because for higher footfall I would have to pay the rates which are more than the monthly rent! Don't get me started on that.

Christmas trade was fine, I took in enough to cover all the bills for Jan and Feb but this month I am struggling to make ends meet for March. I do have several 'renewals' due this month because it is a year now since the business started which are adding more financial pressure. I understand that Jan and Feb are tough months for retail, but it is getting to the point where I feel like the business is not performing. The gamble doesn't seem to be paying off. I knew the move would be boosted initially from the "new shop" effect ( because hardly anyone knew we existed before the move) and also Christmas trade. But now the reality is sinking in that I will not be able to cover the bills. My online part of the business is self sustaining. I have regular orders that make up approx 1/3 to 1/2 total sales each month. But instead of taking in the £120- £150 between online and in store sales a day needed to sustain the business I am lucky to take in £60. At the moment I have several 'birthday' offers running to try and get some extra sales which are not paying off.

I have not taken any wages from the business since I started as I was in the position of my partner's wages covered all of our personal expenses, however he has had to go to extremely reduced hours because of ill health and so we are struggling financially at home.

I really don't now what to do.

Ideally I would like to close the store and concentrate on running the online store from home that way I could get a second full time job. But the lease for the shop requires 6 months notice which I will not be able to give until May, even if the landlord agrees to keep the deposit for an early exit, I still have 6 months lease( and rates) to finance. I do not know or have the means to find someone to assign the lease and can not sublet.

I feel that my only choice for now is to really push the business forward. I am a sole trader with no employees. Advertising is, as you know expensive, I utilise Facebook and twitter but those can only get you so far. I am reluctant to spend on advertising considering that I doubt I have the funds to be able to cover it. I made a few mistakes in my first year, I was also a victim to a advertising scam. So I am now extremely wary of where and how to advertise. I tend to stick with advertising I can control, Facebook and GoogleAds.

Word of mouth and the partially increased foot traffic from the new location had helped. I have even been nominated by my customers for a local retail business award which is bitter sweet considering that I feel like a failure.

Any suggestions on what I could do to help boost trade on a very very tight budget would be helpful.

 

[Annoying Donkey]

How about an offer to your past customers...
Also a reward for referrals...

Offer some space to an off high street business for share of profit...
Are there other non competing businesses who would offer your stuff for a share of profit...? Or an exchange, you promote their stuff to your customers and they promote yours to theirs...

 

[BeMarketed]

Generally you should look at what makes the highest profit margin (the 80:20 rule). E.g. If this is your high street location them work out what will be achieved if you focus all your additional efforts on growing this as much as possible.

However it does depend on the online side, if you make 20% less margin but feel your additional efforts can grow your business 50% quicker then focus on this.

Basically you need to work out which side to Focus on in the short term and this might mean lower volume but higher margin or Higher volume at a lower margin. It all depends on where your efforts are best used!

 

[John-C]

May I ask the industry you are trading in? If I have to be honest you can really laser target your ad campaigns with both Google and Facebook to drive down ad costs and ultimately improve your ROI - consider using demographics to target the precise audience and even then you can use geographical targeting with Google AdWords to say a 10 mile radius of your business address.

But with a better understanding of what you sell there are a few ways you can market your business locally too. Perhaps running local competitions like spend "x" amount and be in with a lucky chance to win a goodybag or something like that.

P.S your not a failure. Life is a learning curve and even the best still make mistakes

Thanks,
John

 

[julieMD]

Thank you everyone for the advice, I have taken much of it on board and put my thinking cap and positivity pants back on.

I own a small gift shop. I specialise in gifts for cat and dog lovers, themed gifts for people not pets. About 40% of my stock is non themed to draw in non pet lovers. I also stock locally made items not available elsewhere on the high street. Very niche! The high street is slowly transforming with more and more independents like mine opening but it seems that still if you don't sell coffee, tobacco or anything for a £1 no-one is interested. The public as so hypocritical! they say they want more new shops and businesses to open, more original and unique places to shop but then they don't use them.

I tried having a local 'giveaway' during the school holidays.... an advert in the local press with a coupon for a freebie for the kids. I had 2 people redeem the offer! Because it is my first year in business birthday, I am running an offer where anyone who makes a purchase goes into a draw to win back what they spent. So far it has a good response but only for the customers I am getting through the door and on the website. I need more customers! I have posters up and I have leafleted the local area.

I liked the idea of an offer for past customers and also the possibility of hosting pop up shops for local artists and crafters for a fee. I will have a look at my margins on some on the more 'high-end' stock.

 

[The Byre]

We have been running a training scheme to prepare staff for a new venture. To do this, I have been buying books. Let us compare The High Street to Amazon -

If I want to buy in the High Street, I have to drive into the nearest town that is 12 miles away and either park two miles away and walk, or 'just' one mile away in a park-house that smells of urine and costs money. There are two bookshops on our local High Street and neither stocks anything like the training aids and books that we need. The fun part is, they wouldn't even know where to get them, as they are too industry-specific.

I can't do anything else on the High Street, as there are no supermarkets there, other than Marks & Spencer and I can't buy clothing there, as I am in my mid-60s and therefore still too young for the stuff they sell. All the other shops are either strange creatures that sell cheap tat to tourists and gift shops, or shops that sell unidentifiable bits of coloured plastic for a pound.

You don't need me to tell you how stuff sells on Amazon, or that most books arrive within two or three days.

Along with daily newspapers, halogen lights, 405-line television and the Black-and-White Minstrel Show, the High Street as a main-stream shopping experience is dead or dying.

The High Street used to be where pimps, thieves and whores plied their trade to the drunks they preyed upon. It is now returning to that ancient and traditional role, though why anybody would want to be in amongst that, beats me!

 

[myfairworld]

Julie, I happen to be or have recently been in a somewhat similar situation to you though I've been trading for 20 years but we're going through a bad patch - as you do. All sorts of reasons, some of them factors around me that it is difficult to control and, also, sometimes, I think you run out of inspiration for a while and it takes a lot of inspiration to keep a bricks and mortar shop afloat.

There is indeed a huge gap between what people say they want and how they actually react when they've got it! The fact is that in contrast to what The Byre says, and despite the growth of online shopping, for many people (and many of the them young as well as older folk) 'real' shopping is going around the shops preferably combined with a visit to a cafe. Unfortunately there is a tendency for the public to regard shops rather as they regard museums and stately homes and art galleries. Something to go and look at and browse around and enjoy as a form of entertainment. I suppose that today the specific job of the shopkeeper is to get as many people as possible into your place of entertainment by any possible means and then find a way to almost shock them as it were into actually doing their shopping there!

However I agree with part of what The Byre says as, like it or not, small shops are profoundly affected by the businesses around them and in many places the shop mix is indeed made up of charity shops, shops selling plastic whatnots and shops selling frankly peculiar things which most people are unlikely to want to buy.

 

[julieMD]

However I agree with part of what The Byre says as, like it or not, small shops are profoundly affected by the businesses around them and in many places the shop mix is indeed made up of charity shops, shops selling plastic whatnots and shops selling frankly peculiar things which most people are unlikely to want to buy.

I also agree, however the location of my store is in a part of the high street that is being re-invigorated. Almost becoming the "independents quarter". Over the last year there have been several independent stores opening with unique niches. A furniture restoration and homeware retailer, a farm shop,a holistic/new-age shop, independent cafe, a sushi bar, a paint your own pottery place and the main post office is moving in directly opposite. Of course there are pound shops, phone shops and the usual big retailers but they are about 25m in the opposite direction. The independents try to work together to cross promote ourselves. We all open late on thursdays, we recommend each other to customers and so on. The way people are shopping is changing, for high streets to survive they need to offer something different. We can't rely on the big retailers to keep our highs streets alive.

 

[The Byre]

This statement -

The fact is that in contrast to what The Byre says, and despite the growth of online shopping, for many people (and many of the them young as well as older folk) 'real' shopping is going around the shops preferably combined with a visit to a cafe.

- does not match up with this statement -

Julie, I happen to be or have recently been in a somewhat similar situation to you though I've been trading for 20 years but we're going through a bad patch - as you do.

Constant and almost violent change is the new reality! Your 'bad patch' is the future.

As author and screenwriter Ayn Rand said "You can avoid reality, but you cannot avoid the consequences of avoiding reality!"

 

[John-C]

What I would do in this situation is whilst you still have the shop is to start taking sales online via e-commerce and other platforms which may be suitable such as Amazon and eBay.

A lot of ready-to-go e-commerce stores integrate directly into Facebook pages which creates great cross-platform advertising. To get you off the ground run a competition on Facebook to generate some brand awareness. Be sure to post on relevant Facebook groups for some free fans

You can also use Facebook ad's and Google AdWords too and if you are worried it will cost a lot you can drive down the cost by laser targeting your audiences using demographics so only the people who are interested and ready to buy will see your ad.

Once you start flowing with some online sales you can then retarget your existing customers on Google and Facebook to try and upsell to them again.

Now, with your shop - you said you have a contract period before you close the doors. Use this time to generate more sales using local advertising methods as you are already. also submit your business to Google's directory, yellow pages etc. to make sure the public can see you. Also with AdWords you can target audiences within a certain distance from your location that are searching for your products.

I guess the point I am getting at is online retailing is certainly becoming bigger then your typical high street "brick and mortar" shop but whilst you have the shop you need to make the most out of it as well as establishing your business online. You can definitely use online platforms to promote your physical store too.

I hope this helps

Thanks,
John

 

[Chris Ashdown]

You have done your research and run the shop for a relatively short time but found your research was not working as planned, Nearly all new shops have suffered the same way and in many instances it is because the shop owner buys in what they personally like and not what the customers want.

You have a few months left so you may as well use them to see if you can change things around at little cost

Are there any other items you can buy in to widen the appeal to your customer base, go to pets are us and see what customers are buying and try a limited stock of these items, Pet food is another possibility if you don't already sell it not the supermarket tins but some selective dried foods, Children's pet t-shirts would be a low risk buy there are plenty of printers of t-shirts on the web who sell in low quantities printed with whatever your want on them, Make up pets birthday presents wrapped up in nice paper

All the best

 

[myfairworld]

I also agree, however the location of my store is in a part of the high street that is being re-invigorated. Almost becoming the "independents quarter".

Well in the long term that could work out well. I can think of two towns in my own region which have succeeded in retail terms - apparently against all the odds - by becoming what are essentially independents quarters. I wish I was in such a place as my own efforts to persuade local shopkeepers/cafes etc to work together have so far fallen on barren ground. I had a rare Saturday off last weekend and went to visit the larger of the two towns I'm thinking of. It was astonishing to see so many people - and on a cold & damp day - out and about and going in and out of the shops, cafes and showrooms. I hasten to add that though it is a pleasant old town it is not for example a tourist destination but it does have the advantage of a LOT of free parking and cheap parking and the range of shops is very wide. Like many independent shopkeepers I buy mainly from my own store but I had my debit card out several times last Saturday!

The catch is how do you survive until the independents quarter gets well enough known to pull people in who are not currently visiting your shopping area? People will always wander around and 'look at' new shops but getting the real buyers to know about the area and make the effort to travel to it takes much longer, much much longer especially if you don't have an IKEA or Harrods size advertising budget! The town I visited last weekend involved quite a long drive in the wrong direction if that makes sense. I went partly as a shopkeeper who when time allows always likes to look at what is going on in independent retail and the approaches that other people are taking. I went partly as an individual who needed to do some shopping. I knew when making the decision to set off both that I'd be able to park within reasonable distance of the shops/cafes (owing to an arthritic condition my 'reasonable' distance may be shorter than yours) I also knew that there would be a lot of interesting businesses to visit and a big choice of interesting cafes and restaurants where I could eat. I even knew that I'd be able to get a good veggie meal and not just a poor grade veggie lasagne which is the common veggie offering in many places.

One thing I've found in retail is that it can take ages before customers latch on to a product (or coming to an area of course) regardless of how much you try to promote it. You know you have that special range on a special display in the shop. You have that special range on display in the window. You pair that special range with this and that around the shop. You give info about the special range on Facebook, Twitter, etc. You theme your A boards on that wretched special range. Months later regular customers, people who 'see' your window display every day, who see your A boards every day, who see the special display near to the cash register once or twice or three times a week actually discover that you've got x, y, or z available and fall on it with delight...

 

[billmccallum1957]

One of your major problems is that niche is Called "niche" for a reason, the clientele is far more limited that "general public", everyone needs clothing at some point, but relatively few will buy a bowler hat (if you get the analogy).

What are you selling? Where is it available from? How much are other retailers charging for the same items? Are you pricing yourself out of your own market? Is their a demand for your products?

 

[julieMD]

What are you selling? Where is it available from? How much are other retailers charging for the same items? Are you pricing yourself out of your own market? Is their a demand for your products?

I own Present Purrfections. It is a cat and dog themed gift shop with online store. I have several online competitors, all well established and my prices are reasonably aligned with theirs. With there being 7.4 million cats and 8.5million dogs as pets in the uk( 2015 statistics) there is enough business for everyone. I don't just stock cat and dog themed gifts, I do have some 'generic' gifting. I have no real competition for my B&M store. I am careful not to stock anything that anyone else has and I tend to stock more locally made hand-crafted products that no-one else has.

 

[Chris Ashdown]

I am careful not to stock anything that anyone else has and I tend to stock more locally made hand-crafted products that no-one else has.

Can you afford such luxury you must compete on what others sell.

If it sells with others then stock it. you are in a market that may get the small hand crafted item but your daily bread will come from the much more commercial products that the big stores sell. Its not what you like its what customers want.

Hence my suggestion a high quality pet food may bring customers back every week or two as they want their pets to have the best where as tinned or more normal stuff they will always buy at the supermarket

 

[The Byre]

Its not what you like, its what customers want.

That sentence should be tattooed on the inside eyelid of every person starting a business!

 

[billmccallum1957]

I own Present Purrfections. It is a cat and dog themed gift shop with online store. I have several online competitors, all well established and my prices are reasonably aligned with theirs. With there being 7.4 million cats and 8.5million dogs as pets in the uk( 2015 statistics) there is enough business for everyone. I don't just stock cat and dog themed gifts, I do have some 'generic' gifting. I have no real competition for my B&M store. I am careful not to stock anything that anyone else has and I tend to stock more locally made hand-crafted products that no-one else has.

Julie

We run two retail outlets (not in the same market as you) and have found a combination of leafleting and Facebook is generating a good response, with a little ebay trade on the side.

We generally leaflet small areas on a weekly basis, which gives a few extra leads every week, we also post to multiple selling groups on facebook (sometimes 20 groups a day), we target local selling groups such as "facebay Kirkcaldy" (not our area), this type of group with 10,000+ members is a good way of reaching new customers.

 

[billmccallum1957]

Another point I would make is your web site, personally I would have the landing page as the first page of your shop, rather than make people search for it.

Secondly, a page about the B&M shop should be highlighted, possible with inside & outside photos and good visible directions.