Do I give up?

[bbb1]

I have been running a retail business for almost 6 years. 3 years ago I moved premises. I have 9 years remaining on my lease which I personally guaranteed, however, do have 12 monthly break options. I have loans with my bank and have other debts amounting to approx £18K. The problem I have is this. I have extremely good weeks, were I can pay my suppliers regularly, pay loan repayments, all is good. However, I only have to have 2-3 bad weeks, and all goes extremely pear shaped. I am currently at the point where sales have been so bad, I am not able to pay several suppliers who have now put me on stop. I have customers orders I cannot fulfil and have come to a bit of a dead end. I can only obtain further backing from my bank if I personally guarantee it. Having two young children, I really cannot put my home at risk. Without stock, I am struggling to continue trading. Whilst this could change overnight and sales increase, this will not solve the problem next time we have a "lull". I have now been losing sleep and health for 5 years, some days are better than others, but I have now started to feel extremely depressed and cannot see a way to turn this around, and beleive me, it is not through working every hour god sends and exploring every avenue.

Where do I go from here? I have already had 3 ccjs, which I managed to clear, but it is only a matter of time before I receive more.

Any help or advice would be greatly appreciated.

 

[Kernowman]

What is it you are retailing?

Might gives us a clue how to help.

 

[Geoff T]

What do you retail?

Ignore - Kernow asked it first...

 

[garyk]

Agreed, without knowing what the 'product' is it will be hard for others to help.

 

[bbb1]

I sell baby products.

 

[estwig]

If it's making you ill, stop it, get out whilst you can and file for personal bankruptcy.

Live to fight another day.

 

[Kernowman]

I wouldn't say that was a tough sector to be selling into because babies are one of those little 'facts of life' that actually NEED what you are selling.

Whereabouts are you located and is it in a town centre with stiff competition?

 

[rp84]

Give us more information about your business, location, where you trade, any online, ebay ? etc

 

[bbb1]

I am not in a town centre, but quite close to. Competition is very very high. My biggest problem being the internet. Unfortunately a lot of my suppliers do supply internet only companies many of whom have no rent, rates, staff etc expenses. I know for fact that I am used many a time as an internet showroom, ie I demonstrate the product then they buy online cheaper. Whilst I know that I could compete with them, I have not got the cash flow to have the available stock to sell online. I do have a couple of lines that are exclusive to limited stores, however, these alone do not provide enough income to cover all outgoings.

I have spent the last five years fighting, and thinking that I will get there, I have a good reputation that has cost me a lot personally to keep, but unfortunately, I am about to lose that as I cannot get the stock due to lack of funds to pay suppliers.

 

[Allan123]

Needs more info but without... are you just bricks and mortar? Do you have a website? Have you had it optimized? Do you sell on marketplaces? Is the competition in the town rife? Are you positioned in a good place in the town?

There's always a way of turning something around, but only if you have the drive left to give it 1 last push. Identify your weakness and streghten them... identify your competitors and exploit them.

 

[downsouth]

I wouldn't say that was a tough sector to be selling into because babies are one of those little 'facts of life' that actually NEED what you are selling.

its a very competitive sector, lost count of the amount of companies out there at present selling allosorts of clothing, accessories, toys, bathing, equipment etc etc

without knowing if the OP produces their own products etc can only say from my exp in my sector that the high st retailers are in the box seat, i used to stock very very good products, very good brands that often had visiting salesman from other brands looking at them in disgust that they were actually better than there brands, only problem was that these products cost and the high st simply copies them for a fraction of the cost.

Despite premium retailers stocking them and raising the profile of some ranges i'm stuck with a pile of product i cannot shift. I realised this and got out very soon after.

OP - what baby products are you stocking?

 

[Geoff T]

OP - another question if you don't mind...

Where are you?

 

[bbb1]

I sell prams, carseats, nursery furniture and accessories, safety products, and so on. I think my biggest problem is competing with the internet, but without working capital, I cannot do so. Since starting my business, over 6 more independent shops have opened within a 15 mile radius!

My biggest worry is - if I cannot pay my suppliers, and I cannot provide the products - what happens next? Whilst I would not like to go down without a fight, there has to come a time when I put my health and family first. But where do i stand legally?

 

[Allan123]

Do you have a website?

If you do can you deliver direct from suppliers so you don't have to hold large stocks?
That way, something sells online you pay for the item, supplier ships direct, you bag the profit, etc etc.

 

[cali0_14]

discover some sort of high end niche of selling baby clothes and just concentrate selling some of this (high end/expensive clothes) to the right market and take the money first and work on a 1-1 basis with the approproate suppliers and pyramid your sales up by using some form of selling via post. Also, I would start moving to the internet for lack of overheads insurance etc. etc. and ditch low profit margin ranges of clothes and concentrate on expensive brands. That's easier said than done but you're expending far too much energy, mental and physical to worry about 10% mark-ups. A cheap way to go online is via ebay shops. Just so you may know there are Magic Words that when you put them in your advertising just explodes sales for some reason, you should try this and see, maybe create some professionally designed flyers with theses magic words and see people flood your business during the bad times. google "Magic Words", hope this helps...

 

[bbb1]

I do have a website, and am currently having a new one built (which I have had to put on hold whilst deciding the future of my business), however none of my suppliers drop ship.

I am hoping that I am not sounding too negative, I would do anything to make this business survive, but, I have been trying all avenues for the last five years and it is has now got to the stage where I have been affected financial wise personally and no longer am able to put any further funds into the company.

 

[Geoff T]

Have you got up to date accounts?

Have you talked to your suppliers about this?

 

[Kernowman]

I sell prams, carseats, nursery furniture and accessories, safety products, and so on. I think my biggest problem is competing with the internet, but without working capital, I cannot do so. Since starting my business, over 6 more independent shops have opened within a 15 mile radius!

My biggest worry is - if I cannot pay my suppliers, and I cannot provide the products - what happens next? Whilst I would not like to go down without a fight, there has to come a time when I put my health and family first. But where do i stand legally?

Even if you do go down the internet sales route you are still going to be up against very stiff competition from that quarter and that too will take time to become 'organic' out on the web. When you also have 6 other shops in the same line within a 15 mile radius, I can see now why your trade is dwindling away

Have you thought then about diversifying into something else? Just off the top of my head, how many schools outfitters are in your locality? School uniforms are as expensive now as ever they were, so there may be an opening there to gradually introduce into your stock.

 

[patientlady]

Sorry bb1 you find yourself in what must seem impossible. Give these guys as much info as you can as they will be able to help you.
Unusually I know of two babies that have been born this week & I need to buy two gifts. I have absolutely no idea where to go locally to purchase such gifts & would be pleased if there was a local shop that will have both gifts and would be able to wrap them and have an appropriate card. Just a thought... p/l x

 

[Bri]

Yup, bin there and had same experience in the sports industry.Firstly speak to your suppliers about your predicament.If your on stop with a couple, hey ho, doesnt mean they dont want to deal with you.If you can secure an order for something, get the customer to pay upfront if you can, get the supplier to pro forma you which they undoubtedly will, pay for it and deliver goods. Rep is up 10 points already.The internet is a minefield but its there, a global market. I couldnt sell in the shop to locals, now I sell my stuff on ebay alone( I know its not ideal,but its ok for me at the moment) recently to California, Slovenia, Canada, Switzerland, Japan.I would never have done that from the shop.

My guess is youve undersold yourself, time to stand up and shout about yourself, make yourself a nuciance with the local media( I bet theres some charity event going on that involves prams or rafts, donate something and get recognised)

When in business failure is not an option, its when people stop buying off us completely then its time to say ok I tried, now its time to try something else.And its only people who have had their own business can get away with this.

My all time favourite is with suppliers, theyd come around pre season with their goods and their stories about their competitors and why theirs is better than the rest, then two seasons on their working for the competitors now saying that theirs is better than the rest.Makes you laugh.

 

[bbb1]

Thank you, you certainly have been there - you are so right, if I had a pound for every Rep that had been into my store to sell me "the best on the market" only to visit me 3 months later, working for another company with "the best on the market". Its infuriating!

 

[papverpoppies]

I sell prams, carseats, nursery furniture and accessories, safety products, and so on. I think my biggest problem is competing with the internet, but without working capital, I cannot do so. Since starting my business, over 6 more independent shops have opened within a 15 mile radius!

My biggest worry is - if I cannot pay my suppliers, and I cannot provide the products - what happens next? Whilst I would not like to go down without a fight, there has to come a time when I put my health and family first. But where do i stand legally?

If six other companies have set up business in a 15 mile radius of you, then surely there must be business to be had - or they would not have moved in.

Could you run the business from home as well as on the Internet, even if you have to basically start from scratch again, do you offer home delivery within a certain radius, try and offer something the others do not.

Good Luck

Poppy xx

 

[deniser]

Unfortunately the baby market is one of the most difficult to operate in. Where there would have been a baby shop on every high street, they have been closing down everywhere as they just can't compete with the supermarkets, big chains such as Mothercare and the internet.

Childrenswear is officially one of the worst areas to be in.

Price is key. Quality is no longer important or even recognised by customers.

The last baby shop in our town closed down when Toys R Us (inc Babies R Us) opened up nearby.

If you haven't got a strong internet presence by now you have probably missed the bandwagon.

I have closed a baby shop down myself in the past.

If I were you I would take steps to exercise your break option and then see if you can negotiate an early surrender simultaneously and try and wind it down as neatly as possible. I say this only from my view of the state of the baby market.

I wish you luck.

 

[Searcher]

I am not in a town centre, but quite close to. Competition is very very high. My biggest problem being the internet. Unfortunately a lot of my suppliers do supply internet only companies many of whom have no rent, rates, staff etc expenses. I know for fact that I am used many a time as an internet showroom, ie I demonstrate the product then they buy online cheaper. Whilst I know that I could compete with them, I have not got the cash flow to have the available stock to sell online. I do have a couple of lines that are exclusive to limited stores, however, these alone do not provide enough income to cover all outgoings.

I have spent the last five years fighting, and thinking that I will get there, I have a good reputation that has cost me a lot personally to keep, but unfortunately, I am about to lose that as I cannot get the stock due to lack of funds to pay suppliers.

Hello OP, have highlighted several points you made yourself.

Firstly, if you're a Ltd company then you need to get advice asap because it sounds as though you're overtrading and trying to trade when you're effectively bust. I hope I'm wrong, but get advice now because you could get into hot water if you continue fighting a lost cause.

The points I've highlighted in your post pretty much answer your own dilemna, I think. You obviously know about the big threat from the internet but so far you haven't engaged it properly yourself. You obviously love the sector you're in but you have to be realistic.

My suggested action points would be take the break in the rent if you can. This gives breathing space. But only do this if you have a seriously good plan for what you're going to do. If you're still vague and can't get finance for the future then you should do the hardest (and bravest) thing which is call it a day. At least you won't make the situation worse, you can recover mental stremgth and come back fighting at a later date.

Options : how can you increase sales from a shop ? I'm not an expert but there are loads of people on the forum who are retailers so maybe they can help. Its down to marketing/footfall and perhaps you should try and tie in with schools, playgroups, young mother groups etc.

In many ways, I like internet shops where I know there's a bricks and mortar business behind it. Its very reassuring, so if you can find the cash then you could do both.

Internet: Go for it. There are loads of people on this forum alone who can advise and help out with PPC, websites, social media you name it.

General message to everyone on the forum
As a daily reader of the forum I see tons of advice given freely and then posts dribble to an inconclusive end. Surely there's an opportunity with our combined knowledge, experience etc etc for a more practical way that fellow business people can help put together a kind of rescue package for not just this OP but others too. Heaven knows, we see queries like this and might wonder 'there by the grace of god .....'

 

[keekaboo]

Hi i also own a baby store there is only one other in the town i live and i have had alot of trouble getting the big brands to stock me as they say they will only stock one business in the town (is this legal???) anyway i just wanted to say i sell alot of goods online the other babyshop has no website which i think gives me an advantage if you want to set up a website yourself cheaply (if you send me a pm i will give you the link) this is where i did my site and ppl comment on how professional it looks. Dont give up hope x

 

[Daniel Jones]

Your personal story comes through very clearly - even though the minutia of your business logistics remains somewhat obscure. It does sound like you are at the wall and something has to give.

I would not risk my personal assets any more if I were you but you'll either need to find a way of injecting new life into this business or give it up. Your health and state of mind are to important.

Give us all as much information as you can about your business - describe everything you can about your location, from size to aspect, neighbors etc, and you're sure to find advice here.

Incidentally, It does sound like a move into the web market might be your best bet from what I can glean from your posts

 

[deniser]

Incidentally, It does sound like a move into the web market might be your best bet from what I can glean from your posts

The trouble is that the internet is saturated with shops selling baby stuff already and it is just as competitive as the high street if not more so. Unless the OP can find a niche which hasn't already been covered several times.......

 

[chiggs]

A shop local to me (sells gifts, baby things, cards) has had a lot of success attending local shopping evenings & baby fairs recently- not only making sales but raising their local profile, making them the first shop locals think about if they need baby goods, or as patientlady says, new baby gifts etc. Might be worth thinking about trying, stands can be pretty cheap for local events (cheaper than advertising!)

Good luck- I deal with a lot of small independent baby stores and I know what difficulties many of them are facing. I also think it's a crying shame that many independents are closing, leaving us with identikit town centres.

 

[jeffbearcroft]

I can't help thinking that if after 6 years you still haven't built sufficient reserves to fund your stock purchases, you may well be in the wrong market for you.

If it was going to work, I suspect you would have cracked it by now but of course, I don't know the details of your position so there may be something that could change the position.

If you want some advice on specific issues, please feel free to PM me. Happy to give some free advice or help if I can.

Best regards

Jeff

I have been running a retail business for almost 6 years. 3 years ago I moved premises. I have 9 years remaining on my lease which I personally guaranteed, however, do have 12 monthly break options. I have loans with my bank and have other debts amounting to approx £18K. The problem I have is this. I have extremely good weeks, were I can pay my suppliers regularly, pay loan repayments, all is good. However, I only have to have 2-3 bad weeks, and all goes extremely pear shaped. I am currently at the point where sales have been so bad, I am not able to pay several suppliers who have now put me on stop. I have customers orders I cannot fulfil and have come to a bit of a dead end. I can only obtain further backing from my bank if I personally guarantee it. Having two young children, I really cannot put my home at risk. Without stock, I am struggling to continue trading. Whilst this could change overnight and sales increase, this will not solve the problem next time we have a "lull". I have now been losing sleep and health for 5 years, some days are better than others, but I have now started to feel extremely depressed and cannot see a way to turn this around, and beleive me, it is not through working every hour god sends and exploring every avenue.

Where do I go from here? I have already had 3 ccjs, which I managed to clear, but it is only a matter of time before I receive more.

Any help or advice would be greatly appreciated.

 

[Rhodes100]

Your answer in increasing your sales is to talk to your potential customers. You have to go and ask then honestly what they think of your shop, why they are not buying in your shop, and what you would have to do to change the situation.

It may be something as simple as a poor window display, and a lick of paint. I.e your shop is not inviting even though what you sell is ok

So go to mother and baby groups, stand outside the local school and ask them are they aware of the shop, and promise you wont be angry (or cry) if they tell you the truth.

The independent shops that are successful are the ones that are unique, so look for unique products and ask your customers what they think of them.

It is an issue of market research to find out what your customers want.

You should also look at your stock control. Profit is margin made on each product multiplied by the amount of times you sell them. If you do not sell a product is it cash sat on the shelves.

Never however try to compete on price with the likes of Mothercare you will never be able to do it. Concentrate on customer service, and your knowledge.

Your customers are on facebook, how many young mothers spend their time on there? Get someone to show you how to use it and market your business there.

Is your business actually making a profit? It may be worthwhile putting it up for sale for £10 -20k, but to make that happen you need to ensure that you will be able to trade for the next 12 months.

 

[Penelope Pitstop]

The others have made some great marketing suggestions but as a mum of 2 under 5's I'd certainly echo the local promotion/networking suggestions. I've seen this done at toddler groups and playgroups I've been to with very positive effects. Go out to groups, take flyers and cards and some smaller products with you to set up a small stall. Try the same at soft play. Offer party plan type shopping evenings - you go along to the hosts house with a selection of stock and some catalogues. Target NCT groups and advertise in their local newsletters. Leaflet drop local nurseries etc perhaps offering a special discount or special offer. Most mums I know are keen to support their local shops but sometimes just "forget" you're there - so remind them! Try a bit of a re-launch, get local press involved - our local paper is always keen to promote local business. Entice mums and kids in with a special event like facepainting for Halloween weekend....Advertise everything on your local netmums site and let them know about what great ranges you're stocking, what promotions or events you've got on. Also if you've got space in your shop premises consider allowing local mums groups use it as a meeting place for free to get them through your door(depends on your lease terms!)

Good luck!

 

[Drpepper]

Sorry if this has been said, but I don't have the time to read all the posts.

I was in the same situation not so long ago. Talk to your suppliers - mine happily accepted instalments on the outstanding balance. Talk to your landlord - mine had no problem with monthly payments rather quarterly ones, hell of a breathing space when that next 3 months rent is due and you only have to find one months. VAT will happily let you pay late or again in instalments, again you still have to pay but gives you a bit of breathing space.

Happily doing the above probably made the difference of getting through the tough times or going bust! Good luck and hang on in there.

 

[Vaheed Akhtar]

Hi bud,

I think situations like yours really give some people a bit of perspective when they think they're having a 'bad week/month' - it certainly has to me. I haven't read all of the replies, so forgive me if i repeat anything anyone else has already offered in advice.

My first bit of advice to you would be to sit down and have a long hard think about whether or not this business is really that important, that your health gets effected. Just thinking of the saying 'health is wealth'. If it is, then you need to work out what you think is going wrong when you're quiet and what you need to do for them quiet periods in order to at least get enough cash flow to pay your bills. Allot of business owners are not open minded enough to criticise their own business and this can sometimes stop them moving forward....I know, because I've half been there myself.

Secondly, how easy/hard would it be for you to find a full time job? are you qualified/experienced in anything in particular? I ask, because if you think it is all too much - then why not start looking for a job and then you do - arrange with your bank/debtors for a repayment method. Ask the bank to take your debt out as a loan over a 7-9 year period?

Good luck and I wish you all the best.

 

[DPOM]

Hi,

Im no means an expert, theres alot better qualified people than me here, but I feel your pain. I've been through similar but theres always a way out.

Have you considered a Company Voluntary Agreement? (CVA). Basically if your business is viable you may be able to get a CVA. This means all of your creditors get off your back and once the CVA is approved (After a meeting with creditors) you pay back a portion of your debt (say 30p out of the pound) out of your profit over 3-5 years or so. Although secured creditors would get the lot back I believe.

Ive been there so I know a bit about it, the downside to a CVA is you'll loose your account terms for a while, but you'll find you'll start getting them back after a few months.

It just might help you sleep a bit easier if things are that bad, but again, please make sure you take professional advice.

Google CVA, a company called Company Rescue or KSA will appear, lots of good info on that (awful looking!) website.

I hope that helps, I wish you the best of luck.

 

[Gaynor Ward]

You have to look at other ways of marketing yourself, use the internet, and companies such as myself , think of ways of selling your products. Maybe by making gift packs, have you been in contact with local maternity hospitals?? Do you have a web site? (I'm not a web site seller

There are many ways of selling a product , not just from a shelf

however.....your health and family are first we are supposed to be achieving to give ourselves an eay life. Only you can make that decision

 

[thebigIAM]

I have similar problems to you, I think, because the stuff I sell is seasonal and it also involves events. The month of February is always a waste of time and bad weather always affects my trade. I have gone for years with a 'two steps forward, three steps back' type of thing going on.

Recently we've been trying to look at ways to increase the amount each customer spends rather than increase customer volume, which is already high. Easier said than done, though. Could you focus more on the products that sell best?

One phrase caught my attention. You said it only took 2-3 weeks of poor trading to make things sticky, whereas I normally have 2-3 months of contingency. Only 2-3 weeks seems like a very narrow shelf to be supporting so much weight. If you've lived the whole of the six years struggling with such tight confinement, I don't recommend you spend another six years doing it. Has it always been this bad or has it worsened in the past 18 months or so?

 

[deniser]

The others have made some great marketing suggestions but as a mum of 2 under 5's I'd certainly echo the local promotion/networking suggestions. I've seen this done at toddler groups and playgroups I've been to with very positive effects. Go out to groups, take flyers and cards and some smaller products with you to set up a small stall. Try the same at soft play. Offer party plan type shopping evenings - you go along to the hosts house with a selection of stock and some catalogues. Target NCT groups and advertise in their local newsletters. Leaflet drop local nurseries etc perhaps offering a special discount or special offer. Most mums I know are keen to support their local shops but sometimes just "forget" you're there - so remind them! Try a bit of a re-launch, get local press involved - our local paper is always keen to promote local business. Entice mums and kids in with a special event like facepainting for Halloween weekend....Advertise everything on your local netmums site and let them know about what great ranges you're stocking, what promotions or events you've got on. Also if you've got space in your shop premises consider allowing local mums groups use it as a meeting place for free to get them through your door(depends on your lease terms!)

Good luck!

All good in theory but not in practice.

I think all of this is OK for a start up business but when you have been manning the shop all day 6 days a week the last thing you have the energy or time to do is go out in the evenings to do party plan especially when you have children of your own. And if you can't afford to employ staff you can't go out during the day either.

Facepaints in shops = disaster. Been there, done that.

Meeting place = more disaster. Pushchairs, kids playing havoc with your stock, food smeared over clothing etc.

Mumsnet/netmums - try mentioning you run a business and see how you will be attacked.

The biggest problem is that people are conditioned to buy from chain stores or supermarkets if they buy in a B&M shop at all and they find indies scary in case they are forced to buy something they can't afford or inconvenient for parking.

I know exactly what the OP is going through and whatever you try to do, nothing works because you can't change public opinion/perception/the fact that people are careful with their money.

It's a brave step to close down but one which needs to be faced eventually as things are only get to get worse in that particular market sector, not improve.

 

[Robert Moore]

Google CVA, a company called Company Rescue or KSA will appear, lots of good info on that (awful looking!) website.

Thanks for your input I am glad to say that we are in the process of redesigning the website for a January Launch!


Yup lots of good stuff there!

 

[Penelope Pitstop]

Mumsnet/netmums - try mentioning you run a business and see how you will be attacked.

Not my personal experience of netmums. I was able to successfully market my business on netmums and found it was very effective free advertising - maybe it depends on the local moderator. The Leeds site for example is very active with a few local independent baby shops advertising on there regularly.

 

[Toni Toni]

never give up... ;.)