Our blog ‘5 things to do when starting-up a UK retail business’ was published on 31st July 2011, rounding off Independent Retail Month. We’d hoped to galvanise those inspired by Independent Retail Month to follow in our footsteps.
The last 12 months have been an ‘experience’! Here’s our retrospective view of……
5 things to do when starting-up a UK retail business
- Business planning & research
- Understand the maths
- Use your connections
- Listen to & respond to feedback
- Focus, focus, focus
Ok, our list is identical to last years but, with the benefit of hindsight, here’s what we’ve learnt:
Business planning and research
It proved essential to invest time and effort creating a credible, robust, realistic business plan. Every time we’ve required finance – ranging from securing a lease; lines of credit; access to financing for customers – we’ve produced our business plan.
Securing a lease in a prime retail location, as is central Kingston upon Thames, was more competitive than we’d expected in this recession. However, by demonstrating our professionalism through planning and research, we fended off established businesses to secure the lease. We were told offering 0% credit (to compete with other furniture businesses) ‘wasn’t possible without at least 2 years trading history’. It was achievable – thanks to research and our business plan. The lesson? Don’t be deterred. And use the business plan.
Understand the maths
It’s fair to say we underestimated our start-up costs. Do be aware that the rent bond (what you have to put down as a deposit) for a retail unit will be circa 6 months’ rent upfront and it incurs 20% VAT. Negotiate a rent holiday to counterbalance this expenditure.
Invest in accounting software as soon as you start spending money. We waited several months – a mistake. Excel and manual records aren’t sufficient. We’ve found SAGE One Accounts cheap, easy and efficient. Constant input of transactions means cash flow, profit margins, and expenses are always on our minds. Essential activity for a business to survive, let alone grow! Also, obtain professional accountancy advice to guide you through tax and reporting. Good advice from the bank and the solicitor meant we sourced local experts who knew the trading climate and advised accordingly. We took an annual package to control our costs, only paying for expertise, as we handle day to day activities. The lesson? Money is hard earned, quickly spent. Manage it carefully!
Use your connections…..
….and use their connections too. We’ve networked successfully, using local trades and professionals, who happily introduce their contacts. Social media, which we under-utilised initially, really works. Don’t hesitate to ask for help, there’s a wealth of expertise out there. Do be prepared to be proactive and be willing to try things. Some initiatives work, some don’t. Always reciprocate. Oh, and keep your Twitter accounts separate, never mix business and personal tweets (something we’ve not always been great at).
Actually be should have also said “….and create new connections”. Facebook has been great for us, as we’ve published photos of customer’s pieces. Given our bespoke and customised range this has been useful developing our profile. It helps that we’ve enjoyed customers ‘liking’ us. Importantly we’ve enjoyed their repeat custom in addition to their referrals and recommendations. Building connections becomes so much easier when others are willing to help. Our tip? Take time to say thanks, it costs nothing, and always discount by way of rewarding return business.
Listen to and respond to feedback
As we opened, Habitat (amongst others) went into administration. This resulted in a number of jittery ‘could-be’ customers needing reassurance before buying from us. We addressed concerns as appropriate, including encouraging purchases on credit cards so they’re properly insured. We’ve been transparent about who we work with, offering visits to the UK manufacturer’s factory show rooms where necessary.
We’ve used satisfied customers as referees. As a new business we’ve solicited feedback. When it’s positive – great. When it’s less so, we’ve responded, quickly and gracefully.
Having traded for 9 months we’re becoming well established locally. We change the look of the shop regularly, moving products around. We’ve changed and added products. We happily sell pieces off the shop floor, offering discounts with immediate delivery. This means that we can refresh pieces – often with identical pieces in new fabrics or colours. We know what sells, what doesn’t. If it doesn’t sell, we take it off the floor or reduce the price. We know which suppliers are able to fulfil orders quickly and who won’t. If a supplier lets us down, we address it with them. Two strikes and they’re out. We develop relationships with suppliers and customers creating trust and credibility. Lessons learnt? Communicate constantly. Keep it fresh. Offer what your customers want.
Focus, focus, focus
Or more appropriately ‘work, work, work’! Yes, we’re focused, but we’re also hard working. Be warned, it’s not easy building a business in this climate. Retail is 7 days a week, whether or not you open each day. Retail isn’t just about having a shop unit, it’s so much more. This does mean thinking about online and/or trade opportunities. Customers visiting the shop ask for details of our website or tell us they’ve already researched via our website. Keeping the site up updated is as important as constantly remerchandising the shop. Accurate, timely administration is essential for customer service, supplier relations and managing profit margins efficiently. If someone wants to visit out of hours, requests a home visit, requires advice that involves putting in extra hours – do it. If you don’t, someone else will. The moral? Work hard but have fun. Enjoy!
About Seriously Sofas
Seriously Sofas are independent furniture retailers. We specialise in affordable quality, bespoke UK & customised European sofas, sofa beds, corner / modular units, chairs and accessories. Provide your room sizes (drawing, plans etc.) and photos so we can really work with you to create exactly what you want in terms of size, style, finishing and comfort.