Before you get to the stage of signing a lease, write a business plan. This needs to cover the following.
◆ Why you are going into business.
◆ What your personal goals are.
◆ What you want to achieve from the business.
◆ Why it is going to be a success.
◆ Why people are going to buy your products.
◆ Why your business will survive and thrive when so many others do not.
If you need to borrow money to set up the business you will have to write a very full and professionally presented business plan for the bank. This should include details of:
◆ the company structure – sole trader/partnership/limited company;
◆ what the business will do;
◆ the market size and potential;
◆ competitors;
◆ suppliers;
◆ cash flow forecasts;
◆ projections of takings and growth;
◆ a complete résumé of all the people involved;
◆ your qualifications, experience and the strengths you will bring to the proposed business;
◆ the proposed premises;
◆ any plant, machinery and vehicles;
◆ your assets and financial needs.
Be realistic
Calculate how much money you need to earn for the shop to break even and how much money you need to earn to live off. There is no point saying you can live for £50 a week when the mortgage on your house is £1,000 a month.
When writing the cash flow forecasts you will be able to enter accurate figures for the likes of rent and rates once you have found your proposed location, but will have to estimate how much you will be spending on telephone or stationery. Remember that the more your turnover goes up, the more you will spend on things like carrier bags and probably wages, but your heating and lighting costs for example will remain the same.
Turnover ratios are available for some types of business such as grocery and menswear shops. This means that if £x of stock is held in a shop floor area of y square feet, then turnover can be expected to be £z. For most types of business, however, you can only guess.
понеделник, 30 ноември 2009 г.
неделя, 29 ноември 2009 г.
Rent deposits
Unless you have been in business before, prior to taking possession of the shop, most landlords will require you to pay a deposit of six months’ rent (plus VAT if the landlord is VAT registered) in addition to the first quarter’s rent. If you are going to beVAT registered you will be able to claim all the VAT back but remember to include it in your setting up budget as it must be paid in advance.
The British Property Federation (BPF), which represents the UK property industry, has been campaigning for flexible leases and a fairer rents regime. As a result, there is beginning to be a move in rental payments from quarterly to monthly in advance. The BPF is encouraging landlords to sign up to its Commercial Landlords Accreditation Scheme (CLAS), which highlights landlords committed to offering the best service. Landlords can sign up to it via www.clascheme.org.uk.This should be raised with any prospective landlord as part of your lease negotiations. Flexibility has always been possible if the landlord is desperate to find new tenants, such as during an economic downturn, but even on my current shop, the lease of which was negotiated prior to the credit crunch of 2007, I negotiated six weeks’ rent free to help with the fitting out. All fitting out was done within two weeks and I had four weeks rent free to earn the first quarter’s rent.
The British Property Federation (BPF), which represents the UK property industry, has been campaigning for flexible leases and a fairer rents regime. As a result, there is beginning to be a move in rental payments from quarterly to monthly in advance. The BPF is encouraging landlords to sign up to its Commercial Landlords Accreditation Scheme (CLAS), which highlights landlords committed to offering the best service. Landlords can sign up to it via www.clascheme.org.uk.This should be raised with any prospective landlord as part of your lease negotiations. Flexibility has always been possible if the landlord is desperate to find new tenants, such as during an economic downturn, but even on my current shop, the lease of which was negotiated prior to the credit crunch of 2007, I negotiated six weeks’ rent free to help with the fitting out. All fitting out was done within two weeks and I had four weeks rent free to earn the first quarter’s rent.
събота, 28 ноември 2009 г.
Premiums and other charges
A premium (or key money) is a sum of money charged by the previous tenant, payable by the new tenant for the right to take over an empty shop for the remainder of the lease.You get nothing more for your money than that. Premiums were routinely charged in the late 1980s when the economy was booming but fortunately, this practice does not seem to have been resurrected since and I am not aware that premiums are currently being charged.
Another practice that was commonplace in the boom-time of the late 1980s was the need for prospective tenants to make payments to property agents just to ensure that they were sent details of properties that were available to let. Those who were not in the know about this did not receive any mailings. I do not believe in subscribing to such practices but suspect that some agents (who have not sent me information on shops I know to be available) still operate in this way.
Another practice that was commonplace in the boom-time of the late 1980s was the need for prospective tenants to make payments to property agents just to ensure that they were sent details of properties that were available to let. Those who were not in the know about this did not receive any mailings. I do not believe in subscribing to such practices but suspect that some agents (who have not sent me information on shops I know to be available) still operate in this way.
петък, 27 ноември 2009 г.
Rental charges
Rent is a complicated calculation. It is charged at so many pounds per square foot, but not every square foot of a shop is worth the same value. The front part of a shop, looking from the window inwards, is the most expensive part.The rent for a shop that is wide but not very deep, will cost more than the same sized shop next door, which is narrow but goes back a long way.
If there is an upstairs sales area, the rental for this area will be less expensive than that downstairs.
The value per square foot varies depending on which part of the country and which town the shop is in. It will also vary depending on which part of town and the exact part of the street.
If there is an upstairs sales area, the rental for this area will be less expensive than that downstairs.
The value per square foot varies depending on which part of the country and which town the shop is in. It will also vary depending on which part of town and the exact part of the street.
четвъртък, 26 ноември 2009 г.
Length of lease and rent reviews
Shop leases have traditionally been for 25 years or more but following the recession of the early 1990s, this has tended to be cut to shorter periodssuch as 12 or 15 years.You might even be lucky and agree one for six years. The period of your lease will probably be split into three or five year periods, depending on the length of the lease. At the end of each of these periods you will be subjected to a rent review. Most leases specify an upward-only rent review, meaning that even if other rents in the area have fallen, yours will rise, or at best remain the same. If your landlord is pushing for a rent rise above inflation, it is worth employing the service of a commercial property surveyor, who will charge in the region of 10% of the finally agreed rent.
At the end of my first leases, the landlord tried to push the rents up from £7,750 and £9,750 to £9,500 and £14,000 respectively. Having failed to negotiate a more reasonable figure myself, I employed a commercial property surveyor to negotiate on my behalf. The process took over 18 months, cost me £1,750, involved both shops being re-measured (one was found to be smaller than it had previously been!) and resulted in new rents being agreed at £8,000 and £10,250. These figures were less than the £8,500 and £10,500 I had originally offered to pay!
At the end of my first leases, the landlord tried to push the rents up from £7,750 and £9,750 to £9,500 and £14,000 respectively. Having failed to negotiate a more reasonable figure myself, I employed a commercial property surveyor to negotiate on my behalf. The process took over 18 months, cost me £1,750, involved both shops being re-measured (one was found to be smaller than it had previously been!) and resulted in new rents being agreed at £8,000 and £10,250. These figures were less than the £8,500 and £10,500 I had originally offered to pay!
сряда, 25 ноември 2009 г.
Taking on a licence
A licence is also a legal agreement, but one which can be terminated at any time by either the licensee or the landlord.This can be an advantage if your plans are short-term but it does not give you any long-term security. A licence will be issued for example:
◆ on a shop that is available only for a short period of time, eg if it is earmarked for re-development;
◆ for an indoor market stall, which is not a permanent trading location but the licence gives you the right to the same location on the market, each week of your licence;
◆ for most small storage units, such as lock-up garages.
◆ on a shop that is available only for a short period of time, eg if it is earmarked for re-development;
◆ for an indoor market stall, which is not a permanent trading location but the licence gives you the right to the same location on the market, each week of your licence;
◆ for most small storage units, such as lock-up garages.
вторник, 24 ноември 2009 г.
Taking on a lease
A lease is a legally binding document that entitles the tenant to trade at a specified address for a stated period of time. If you leave during that period of time, then you (the tenant) are still responsible for paying the rent. If you can find a new tenant, who is acceptable to the landlord, then you should be able to assign (hand over) the lease to the new tenant, who will take over paying the rent for the remaining period of the lease. Legally, however, you (the original tenant) are still liable should the new tenant, or any subsequent tenants, stop paying the rent. This is the standard type of agreement for renting a shop.
понеделник, 23 ноември 2009 г.
THE FINANCIAL AND LEGAL ARRANGEMENTS OF TAKING ON PREMISES
In town centre retailing it is highly unusual (if not completely unheard of nowadays) for the retailer to own their own premises. Dedicated property management companies or investment companies such as pension schemes own most commercial property in desirable locations.These landlords will offer you either a licence or a lease to occupy their premises.
неделя, 22 ноември 2009 г.
FINDING A PROPERTY
Registering with an internet site such as www.shopproperty.co.uk will enable you to search any town in the country and provide you with a list of shops available, together with brief details of size, rent and a map giving the exact location. Such sites are good for the big locations but not all the smaller premises available are listed, so try the following:
◆ The local paper – commercial property to let is usually at the end of residential lettings.
◆ Specialist trade magazines, such as Dalton’sWeekly, which advertise businesses being sold as going concerns.
◆ Commercial property agents and business transfer agents listed in local telephone directories.
◆ The local authority – many keep lists of property to let/for sale.
◆ Walk the streets of the towns in which you are interested, there may be a ‘To Let’ or ‘For Sale’ board outside the shop you want.
◆ The local paper – commercial property to let is usually at the end of residential lettings.
◆ Specialist trade magazines, such as Dalton’sWeekly, which advertise businesses being sold as going concerns.
◆ Commercial property agents and business transfer agents listed in local telephone directories.
◆ The local authority – many keep lists of property to let/for sale.
◆ Walk the streets of the towns in which you are interested, there may be a ‘To Let’ or ‘For Sale’ board outside the shop you want.
събота, 21 ноември 2009 г.
Getting it wrong
Remember the boom time of the 1980s? A study was done to find a centre of mass affluence in South East England – a place where a shopping centre would be built that would be in the centre of what was deemed to be the wealthiest part of that area. The idea was to build a specialist shopping centre for small, exclusive, up-market shops that would be highly attractive to the surrounding high-income earners.
A, B and C represent areas in the South East of England, where people with high incomes had been identified as living. The hatched area represents the most central area for all of the above people to travel to. This was calculated to be the most favourable place to build the new shopping centre.The place chosen was Hatfield in Hertfordshire and the new building was called The Galleria.
Hatfield was hit badly by the recession of the late 1980s/early 1990s, losing the town’s main employer – British Aerospace. The shop units in The Galleria failed to attract sufficient exclusive boutiques to fill the centre. Those that did sign up quickly closed down.
It was eventually turned into a discount outlet centre and although pretty much the opposite of what it was designed to be, seemed to survive happily in that format during the economic boom of the early twenty-first century. It remains to be seen how the centre will cope with the latest downturn.
A, B and C represent areas in the South East of England, where people with high incomes had been identified as living. The hatched area represents the most central area for all of the above people to travel to. This was calculated to be the most favourable place to build the new shopping centre.The place chosen was Hatfield in Hertfordshire and the new building was called The Galleria.
Hatfield was hit badly by the recession of the late 1980s/early 1990s, losing the town’s main employer – British Aerospace. The shop units in The Galleria failed to attract sufficient exclusive boutiques to fill the centre. Those that did sign up quickly closed down.
It was eventually turned into a discount outlet centre and although pretty much the opposite of what it was designed to be, seemed to survive happily in that format during the economic boom of the early twenty-first century. It remains to be seen how the centre will cope with the latest downturn.
петък, 20 ноември 2009 г.
Amenities
Is it opposite the busiest bus stop in town? If it is in an arcade, is it walkthrough or dead-end? What is at either end? Where is the nearest competition? Will your neighbours complement or compete with what you are planning to sell?
I opened my second shop, selling ethnic and alternative clothes, jewellery and accessories, opposite my first, a New Age gift shop. Next door there was a CD shop and an Extreme Sports shop, which made that part of town quite a centre to draw in young people. The street was a covered arcade, the main thoroughfare from the beach and the town’s main car park, to the High Street and town centre bus stops.
I opened my second shop, selling ethnic and alternative clothes, jewellery and accessories, opposite my first, a New Age gift shop. Next door there was a CD shop and an Extreme Sports shop, which made that part of town quite a centre to draw in young people. The street was a covered arcade, the main thoroughfare from the beach and the town’s main car park, to the High Street and town centre bus stops.
четвъртък, 19 ноември 2009 г.
The opinion of fellow traders
Whether you are planning to buy a business or take over vacant premises, speak to the other traders around and see if you can get a feel for what business is like in that area. Some may view you as competition and not tell the truth but if you speak to enough people you will be able to build up a reasonably accurate picture of the situation. If you are planning to take on premises in a communal development where you will share the same landlord, find out if there are any particular issues you would want to know about.
I enquired about the landlord with one group of tenants and found that for some time not all tenants had been paying their service charges. As a result there were a number of serious maintenance issues with the property and existing tenants were being asked to contribute large lump sums of money to effect the repairs. I found out more information than the landlord had volunteered to me and was able to make a more informed decision on whether or not to take on the lease – I did.
I enquired about the landlord with one group of tenants and found that for some time not all tenants had been paying their service charges. As a result there were a number of serious maintenance issues with the property and existing tenants were being asked to contribute large lump sums of money to effect the repairs. I found out more information than the landlord had volunteered to me and was able to make a more informed decision on whether or not to take on the lease – I did.
сряда, 18 ноември 2009 г.
Footfall
Stand outside and check how many people walk past. Do this on particular days of the week and at particular times. Compare this to other parts of the town on the same days and times.
I compared a shop unit by the railway station on a main road with one in a covered arcade. My expectation was that there would be more people passing the unit by the station. The actual result was that far more people walked through the arcade.
I compared a shop unit by the railway station on a main road with one in a covered arcade. My expectation was that there would be more people passing the unit by the station. The actual result was that far more people walked through the arcade.
вторник, 17 ноември 2009 г.
Checking for yourself
Think of your local town centre:
◆ the shops on the top floor of the indoor shopping centre that are never as busy as those downstairs;
◆ the street that used to be so busy before the one-way system was brought in and now nobody walks down there or can park there;
◆ the number of times in the past five years that the shop round the corner from the main precinct has changed hands … four, five, six? Make sure you are not number seven.
The best location for any shop looking for passing trade will be the one with the most passers-by and you will be looking to rent the best location you can afford. Shops are classed as being in:
◆ Primary Locations
– the busiest part of the High Street
– the main entrance to a busy shopping centre
– the centre of things
◆ Secondary Locations
– the quieter ends of the High Street
– the approach roads to the main shopping area
– not quite in the centre of things
Then there are others that I will put in a third group
◆ the ‘Terminal’ Location
– the one where it is only a matter of time before the latest tenant goes out of business.
If the only shop to rent in the whole town is at the end of a no-through alleyway, with derelict and boarded up warehouses all around, don’t kid yourself. Customers are not going to come flocking down there just to see what you sell. If the location is in any way quirky – upstairs, on its own, off the main drag – it will not be as profitable as the one 50 metres away that is in a secondary, but conventional location.
Generally a primary location will be too expensive for a small independent just starting out.
In December 2008 the cheapest available shop to let in Bluewater Shopping Centre, Kent, was £108,000 per annum for 640 sq ft. In the Trafford Centre, Manchester, the smallest unit available was 1,989 sq ft for £355,000 per annum. With rates of £125,000, a service charge of £20,000 plus a management fee of 7.5% per annum, you need very deep pockets indeed to get started in places like these.
◆ the shops on the top floor of the indoor shopping centre that are never as busy as those downstairs;
◆ the street that used to be so busy before the one-way system was brought in and now nobody walks down there or can park there;
◆ the number of times in the past five years that the shop round the corner from the main precinct has changed hands … four, five, six? Make sure you are not number seven.
The best location for any shop looking for passing trade will be the one with the most passers-by and you will be looking to rent the best location you can afford. Shops are classed as being in:
◆ Primary Locations
– the busiest part of the High Street
– the main entrance to a busy shopping centre
– the centre of things
◆ Secondary Locations
– the quieter ends of the High Street
– the approach roads to the main shopping area
– not quite in the centre of things
Then there are others that I will put in a third group
◆ the ‘Terminal’ Location
– the one where it is only a matter of time before the latest tenant goes out of business.
If the only shop to rent in the whole town is at the end of a no-through alleyway, with derelict and boarded up warehouses all around, don’t kid yourself. Customers are not going to come flocking down there just to see what you sell. If the location is in any way quirky – upstairs, on its own, off the main drag – it will not be as profitable as the one 50 metres away that is in a secondary, but conventional location.
Generally a primary location will be too expensive for a small independent just starting out.
In December 2008 the cheapest available shop to let in Bluewater Shopping Centre, Kent, was £108,000 per annum for 640 sq ft. In the Trafford Centre, Manchester, the smallest unit available was 1,989 sq ft for £355,000 per annum. With rates of £125,000, a service charge of £20,000 plus a management fee of 7.5% per annum, you need very deep pockets indeed to get started in places like these.
понеделник, 16 ноември 2009 г.
RESEARCHING YOUR CHOSEN LOCATION
1. Count the chimney pots
Every business benefits from high volumes of customers and the denser the local population (I am talking quantity here not IQ) the greater the number of potential customers. If you have enough people, all you have to do is stock what they want. The perfect product at the best price can only be a best seller if there are sufficient people to buy it.
2. Who and what is round about
◆ Is your intended site near ‘like-minded’ shops? If you are a florist, can you find a location near an undertaker, a bridal wear supplier or outside the bus/train station to catch people on their way home from work?
◆ Are you in a busy thoroughfare with lots of people walking past? The more exposure your shop has, the more likely you are to make sales.
◆ Where is the nearest car park? Parking, particularly if free, brings people into the town and is important if selling bulky items that customers need to collect.
◆ If your product is aimed at young people or ‘clubbers’, how many schools, colleges or nightclubs are there in the area?
◆ If the target customer is retired, are there many bungalows or retirement homes nearby?
The saying is ‘location, location, location’ – the three most important points to
consider when setting up a business.
3. Counting the footfall to find the most customers
Once you decide on a location, the local council may be able to provide information on pedestrian footfall ie, identifying different streets in a town by the number of people who walk through them to discover the busiest areas. There are market research companies that will sell you this information but you cannot beat checking for yourself.
Every business benefits from high volumes of customers and the denser the local population (I am talking quantity here not IQ) the greater the number of potential customers. If you have enough people, all you have to do is stock what they want. The perfect product at the best price can only be a best seller if there are sufficient people to buy it.
2. Who and what is round about
◆ Is your intended site near ‘like-minded’ shops? If you are a florist, can you find a location near an undertaker, a bridal wear supplier or outside the bus/train station to catch people on their way home from work?
◆ Are you in a busy thoroughfare with lots of people walking past? The more exposure your shop has, the more likely you are to make sales.
◆ Where is the nearest car park? Parking, particularly if free, brings people into the town and is important if selling bulky items that customers need to collect.
◆ If your product is aimed at young people or ‘clubbers’, how many schools, colleges or nightclubs are there in the area?
◆ If the target customer is retired, are there many bungalows or retirement homes nearby?
The saying is ‘location, location, location’ – the three most important points to
consider when setting up a business.
3. Counting the footfall to find the most customers
Once you decide on a location, the local council may be able to provide information on pedestrian footfall ie, identifying different streets in a town by the number of people who walk through them to discover the busiest areas. There are market research companies that will sell you this information but you cannot beat checking for yourself.
неделя, 15 ноември 2009 г.
FINDING YOUR LOCATION
Where do you want to be in business? Could it be where you live? Your local shops may not always seem the most obvious location but consider:
◆ A long journey to work every day takes up valuable time. Especially in the early days, when you will need to be in the shop early and stay late. An hour each way in the car could have been the day’s bookwork and orders done.
If your home town is a holiday resort:
◆ Will the local population provide sufficient trade to keep you going out of season?
◆ Could you afford to close?
◆ Would your lease allow you to close?
◆ Could you use the quiet part of the year constructively, say to travel abroad sourcing and importing stock?
Think about where you go to shop for your groceries, clothes, household goods, furniture and furnishings, presents, sports kit and so on. Ask your local family and friends where they prefer to go. If none of you shop locally for one specific type of goods there could be a gap in the market and the need for that type of shop in the town. If everybody you know prefers to travel for all of their shopping needs, your local High Street could be in need of more regeneration than you will be able to give it single-handedly by opening a shop there.
What am I selling and to whom? Am I a specialist, niche market, mostly mail order or do I need high volumes of sales?
The parade of shops at the end of the street could provide:
◆ low rental;
◆ customer parking;
◆ easy access;
◆ street frontage;
◆ back-room workshop or storage facilities to a business that does not rely
mainly on passers-by, impulse sales or high volume trading.
This would be:
Good for a specialist antique clock repairer advertised in Yellow Pages, the horological magazines and on the Internet, distributing spare parts by mail order, with a workshop in the back room and parking outside for customers to deliver and collect repair items.
Bad for fashion jewellery, greetings cards or other goods where a busy location is needed to give high volumes of passing trade, often buying on impulse.
◆ A long journey to work every day takes up valuable time. Especially in the early days, when you will need to be in the shop early and stay late. An hour each way in the car could have been the day’s bookwork and orders done.
If your home town is a holiday resort:
◆ Will the local population provide sufficient trade to keep you going out of season?
◆ Could you afford to close?
◆ Would your lease allow you to close?
◆ Could you use the quiet part of the year constructively, say to travel abroad sourcing and importing stock?
Think about where you go to shop for your groceries, clothes, household goods, furniture and furnishings, presents, sports kit and so on. Ask your local family and friends where they prefer to go. If none of you shop locally for one specific type of goods there could be a gap in the market and the need for that type of shop in the town. If everybody you know prefers to travel for all of their shopping needs, your local High Street could be in need of more regeneration than you will be able to give it single-handedly by opening a shop there.
What am I selling and to whom? Am I a specialist, niche market, mostly mail order or do I need high volumes of sales?
The parade of shops at the end of the street could provide:
◆ low rental;
◆ customer parking;
◆ easy access;
◆ street frontage;
◆ back-room workshop or storage facilities to a business that does not rely
mainly on passers-by, impulse sales or high volume trading.
This would be:
Good for a specialist antique clock repairer advertised in Yellow Pages, the horological magazines and on the Internet, distributing spare parts by mail order, with a workshop in the back room and parking outside for customers to deliver and collect repair items.
Bad for fashion jewellery, greetings cards or other goods where a busy location is needed to give high volumes of passing trade, often buying on impulse.
събота, 14 ноември 2009 г.
FINDING YOUR MARKET
The following are examples of what some people have found customers want to buy in their particular area:
◆ Imitation perfumes for £2.99 a bottle from a car boot sale near a council estate.This worked because although the people there did not have much money to spend, they were prepared to treat themselves once a week.
◆ An Internet café thrives in a town where there is a base of foreigners who want to keep in touch with home, for example a barrack town used by the Gurkhas.
◆ Fish and chip shops often rely on those leaving the pubs after last orders but one located by a market, opening early to cater for stall holders, can afford to close early. Much more sociable working hours for the owners and staff, and they avoid the hassles and dangers of drunk, and sometimes disorderly, customers.
◆ A seaside town increases its population dramatically during the summer months and gives its traders a new set of customers each week.
Competition comes directly from other shops selling the same products as
yours, and indirectly from other ways that customers spend their money.
In 1999 mobile phones really took off with every teenager having one. Girls’
spending habits changed from using all their pocket money to buy nail varnish, to
buying top-ups for their phones. Initially my takings took a dive but I retaliated by
selling funky mobile phone holders and cases.
◆ Imitation perfumes for £2.99 a bottle from a car boot sale near a council estate.This worked because although the people there did not have much money to spend, they were prepared to treat themselves once a week.
◆ An Internet café thrives in a town where there is a base of foreigners who want to keep in touch with home, for example a barrack town used by the Gurkhas.
◆ Fish and chip shops often rely on those leaving the pubs after last orders but one located by a market, opening early to cater for stall holders, can afford to close early. Much more sociable working hours for the owners and staff, and they avoid the hassles and dangers of drunk, and sometimes disorderly, customers.
◆ A seaside town increases its population dramatically during the summer months and gives its traders a new set of customers each week.
Competition comes directly from other shops selling the same products as
yours, and indirectly from other ways that customers spend their money.
In 1999 mobile phones really took off with every teenager having one. Girls’
spending habits changed from using all their pocket money to buy nail varnish, to
buying top-ups for their phones. Initially my takings took a dive but I retaliated by
selling funky mobile phone holders and cases.
петък, 13 ноември 2009 г.
WHAT IS YOUR USP?
USP stands for Unique Selling Point. It is what makes you and your business different from the competition.Why will customers buy from you and not someone else?
Will it be because you offer:
◆ better service;
◆ greater convenience;
◆ faster delivery service;
◆ a better after-sales service;
◆ a wider range of products;
◆ car parking;
◆ child-care facilities;
◆ or has your product got a story to it?
Small shops can compete with the big boys because of their uniqueness and diversity. Independent stereo and television shops sell the same products as the likes of Dixons and Comet, but by offering a delivery or installation service they will be particularly attractive to the shopper who does not have a car or is technologically challenged. That is the story that will attract the older shopper.
I had been selling combat trousers for two years before they started appearing in
shops like Marks & Spencer or even New Look. Once they were on the High Street
combat trousers quickly became over-trendy and largely died out as a fashion item.
Incidentally, I bought only combats from that supplier, until they suddenly brought
out a range of Tommy Hilfigger fleece tops. These proved to be tremendously
popular for a few months and then that trend died completely. I would never have
become involved with selling them had it not been for the combats.
Will it be because you offer:
◆ better service;
◆ greater convenience;
◆ faster delivery service;
◆ a better after-sales service;
◆ a wider range of products;
◆ car parking;
◆ child-care facilities;
◆ or has your product got a story to it?
Small shops can compete with the big boys because of their uniqueness and diversity. Independent stereo and television shops sell the same products as the likes of Dixons and Comet, but by offering a delivery or installation service they will be particularly attractive to the shopper who does not have a car or is technologically challenged. That is the story that will attract the older shopper.
I had been selling combat trousers for two years before they started appearing in
shops like Marks & Spencer or even New Look. Once they were on the High Street
combat trousers quickly became over-trendy and largely died out as a fashion item.
Incidentally, I bought only combats from that supplier, until they suddenly brought
out a range of Tommy Hilfigger fleece tops. These proved to be tremendously
popular for a few months and then that trend died completely. I would never have
become involved with selling them had it not been for the combats.
четвъртък, 12 ноември 2009 г.
FUNDING THE VENTURE
Try to be more imaginative than rushing to your bank for a loan.These are some alternative ways to fund your venture:
◆ A redundancy payment can provide the basis for your business.
◆ With most deposit accounts offering less than 1% interest, offer the ‘bank of Mum and Dad’ a better return on their money and you could be paying a lower rate of interest than your High Street bank would demand.
◆ Reduce your personal outgoings to a minimum; after all, you won’t have time to use that gym membership with a new business to nurture.
If you do need to borrow, make sure it is for essential costs but do not under-estimate your needs and pay off the debt as quickly as possible.
◆ A redundancy payment can provide the basis for your business.
◆ With most deposit accounts offering less than 1% interest, offer the ‘bank of Mum and Dad’ a better return on their money and you could be paying a lower rate of interest than your High Street bank would demand.
◆ Reduce your personal outgoings to a minimum; after all, you won’t have time to use that gym membership with a new business to nurture.
If you do need to borrow, make sure it is for essential costs but do not under-estimate your needs and pay off the debt as quickly as possible.
сряда, 11 ноември 2009 г.
PREMISES COSTS
Premises are a substantial cost when setting up. As a new business, unable to provide references from your (business) bank manager and a commercial (not residential) landlord, you will be required to pay:
◆ three months’ rent in advance;
◆ six months’ rent as a deposit.
A 250 sq ft shop in a reasonable, secondary location could cost £10,000 plusVAT per annum in rent. This could mean paying nearly £9,000 to the landlord alone before redecorating, fitting out the shop or buying stock to sell, let alone getting to the stage of opening the doors to customers and earning any money.
◆ three months’ rent in advance;
◆ six months’ rent as a deposit.
A 250 sq ft shop in a reasonable, secondary location could cost £10,000 plusVAT per annum in rent. This could mean paying nearly £9,000 to the landlord alone before redecorating, fitting out the shop or buying stock to sell, let alone getting to the stage of opening the doors to customers and earning any money.
вторник, 10 ноември 2009 г.
Shops
Shops can be set up from scratch or taken on as a going concern by buying an established business.
A moderate investment is required when setting up from scratch, together with the need to research thoroughly both the market and the proposed location.You start with a blank canvas but can create a lasting and growing empire to be proud of.
Buying an established retail business is the most expensive option but it benefits from the security and goodwill of an existing client base and an established location. The risks of an all-new venture are reduced, as you have access to the business’ accounts and can judge whether fresh impetus will even improve takings.
For more information about these two options see ‘Buying an existing business
v setting up from scratch’
A moderate investment is required when setting up from scratch, together with the need to research thoroughly both the market and the proposed location.You start with a blank canvas but can create a lasting and growing empire to be proud of.
Buying an established retail business is the most expensive option but it benefits from the security and goodwill of an existing client base and an established location. The risks of an all-new venture are reduced, as you have access to the business’ accounts and can judge whether fresh impetus will even improve takings.
For more information about these two options see ‘Buying an existing business
v setting up from scratch’
понеделник, 9 ноември 2009 г.
Fêtes, fairs, festivals or markets
This can be a cheap and flexible way to start up. It provides market research on what sells best whilst earning the capital to set up a permanent business should you decide to do so at a later date.
Some events provide everything you need but for others you will need a decorator’s paste-up table and a cloth to cover it, or even your own market stall. These, together with your stock, can all be stored in your own garage, garden shed, or rented lock-up garage.
You need to be strong and hardy to work this way. Setting up a market stall and carrying all the stock from your car to your pitch is hard work, especially if it is pouring with rain or worse snowing. Some trading days will be a complete washout when trading in the open air.
Some events provide everything you need but for others you will need a decorator’s paste-up table and a cloth to cover it, or even your own market stall. These, together with your stock, can all be stored in your own garage, garden shed, or rented lock-up garage.
You need to be strong and hardy to work this way. Setting up a market stall and carrying all the stock from your car to your pitch is hard work, especially if it is pouring with rain or worse snowing. Some trading days will be a complete washout when trading in the open air.
неделя, 8 ноември 2009 г.
Flooring
The main choices are stone or ceramic tiles, wood or a laminate, linoleum or carpet.The pros and cons are as follows:
◆ Tiles are long lasting, and easy to clean. It is a lengthy job to lay them. They can be noisy to walk on.
◆ Wood is very trendy but scratches and I would not want to own one should stiletto heels come back into fashion. Noise can be an issue.
◆ Lino style floors are to be expected in a supermarket but cheap and down market in most other shops.
◆ Carpets are quick and easy to lay. Cheap carpet will wear out quickly so it is worth spending more for industrial quality. Carpet tiles have the added advantage of being easy to move around, enabling worn or stained areas to be swapped or replaced individually. The downside is chewing gum, which is frequently trodden into my carpets and is difficult to remove.
The deciding factor for me is that things are always being dropped in a shop, whether by customers or staff. Carpet, being soft, means fewer breakages. A classic mistake that new business owners make is to over-do the refitting of their premises. The ultimate in this is taking up a perfectly serviceable floor covering and replacing it with a carpet that has been specially woven to incorporate the name of the premises.
One of my shops was fitted out with carpet tiles when I took it over. They did not fit to the wall, however, as they had been cut to go around previous shop fixtures. Did I put down a new carpet? Not when there was a supply of half-price carpet tiles to be had at the local DIY store. The new ones were brown; the original ones were blue – but who noticed!
Another carpet that I inherited when I took on a lease had been very worn where the previous counter had been. I moved the counter and these patches were exposed for all to see. Did I replace the carpet? Not likely. A subtle application of carpet tape kept the worn part in check as a temporary measure until the shop had earned enough to afford a new carpet.
Both the mismatched tiles and the tape were still in place when I sold the shops many years later. Had they affected sales in the meantime? Not in the least. Did they prevent the sale of the businesses? Clearly not!
Sundries
Price labels, clothes hangers, paper bags and other sundries can be sourced locally through Yellow Pages or The Trader. If there are no local suppliers, then buy mail order from a company like Morplan.
There are a number of shop-fitting suppliers which you can visit in Commercial Road, in London’s East End.This is a centre for the rag trade, with numerous clothing wholesalers supplying to small retailers and market traders.
◆ Tiles are long lasting, and easy to clean. It is a lengthy job to lay them. They can be noisy to walk on.
◆ Wood is very trendy but scratches and I would not want to own one should stiletto heels come back into fashion. Noise can be an issue.
◆ Lino style floors are to be expected in a supermarket but cheap and down market in most other shops.
◆ Carpets are quick and easy to lay. Cheap carpet will wear out quickly so it is worth spending more for industrial quality. Carpet tiles have the added advantage of being easy to move around, enabling worn or stained areas to be swapped or replaced individually. The downside is chewing gum, which is frequently trodden into my carpets and is difficult to remove.
The deciding factor for me is that things are always being dropped in a shop, whether by customers or staff. Carpet, being soft, means fewer breakages. A classic mistake that new business owners make is to over-do the refitting of their premises. The ultimate in this is taking up a perfectly serviceable floor covering and replacing it with a carpet that has been specially woven to incorporate the name of the premises.
One of my shops was fitted out with carpet tiles when I took it over. They did not fit to the wall, however, as they had been cut to go around previous shop fixtures. Did I put down a new carpet? Not when there was a supply of half-price carpet tiles to be had at the local DIY store. The new ones were brown; the original ones were blue – but who noticed!
Another carpet that I inherited when I took on a lease had been very worn where the previous counter had been. I moved the counter and these patches were exposed for all to see. Did I replace the carpet? Not likely. A subtle application of carpet tape kept the worn part in check as a temporary measure until the shop had earned enough to afford a new carpet.
Both the mismatched tiles and the tape were still in place when I sold the shops many years later. Had they affected sales in the meantime? Not in the least. Did they prevent the sale of the businesses? Clearly not!
Sundries
Price labels, clothes hangers, paper bags and other sundries can be sourced locally through Yellow Pages or The Trader. If there are no local suppliers, then buy mail order from a company like Morplan.
There are a number of shop-fitting suppliers which you can visit in Commercial Road, in London’s East End.This is a centre for the rag trade, with numerous clothing wholesalers supplying to small retailers and market traders.
HOW DO I WANT TO TRADE AND WHERE FROM?
If you are a plumber or electrician selling a service, you can probably work from home, storing your equipment in the garage and using a desk in the corner of the lounge as your office. If you plan to sell goods you will have a supply of stock. This must be stored and possibly displayed somewhere, and you will need some way by which your customers can obtain these goods from you. How you do this will determine whether or not you need premises to operate your business from.
Party plan
You take your products to your customers so do not need premises. Small items work well, such as jewellery, cosmetics and the original party plan classic–Tupperware. Certainly in the early days of your business, stock can be stored in a corner of your home with paperwork being done at the kitchen table. Going into people’s homes in the evenings or offices at lunchtimes, to sell to them in their own environments, is a cheap way to set up a business. This way of selling relies very much on the personality of the seller and would suit someone who is gregarious and outgoing.
Mail order
To do this really well, traditionally you would have needed to produce a glossy, colour catalogue, showing photographs of all the products you sold. This was a costly exercise to produce and frustratingly inflexible to maintain when you wanted to include new products or delete those that were no longer available. Postage was expensive to send copies out to all enquirers, not all of whom would have placed an order.
Nowadays, with the invention of the digital camera and the Internet, this is a much more appealing way to trade. There is no question that a professionally photographed catalogue should look superb but you can get started by taking photographs yourself and setting up a website. Email prospective customers or post them a one-page flyer directing them to your website for the full catalogue.
Party plan
You take your products to your customers so do not need premises. Small items work well, such as jewellery, cosmetics and the original party plan classic–Tupperware. Certainly in the early days of your business, stock can be stored in a corner of your home with paperwork being done at the kitchen table. Going into people’s homes in the evenings or offices at lunchtimes, to sell to them in their own environments, is a cheap way to set up a business. This way of selling relies very much on the personality of the seller and would suit someone who is gregarious and outgoing.
Mail order
To do this really well, traditionally you would have needed to produce a glossy, colour catalogue, showing photographs of all the products you sold. This was a costly exercise to produce and frustratingly inflexible to maintain when you wanted to include new products or delete those that were no longer available. Postage was expensive to send copies out to all enquirers, not all of whom would have placed an order.
Nowadays, with the invention of the digital camera and the Internet, this is a much more appealing way to trade. There is no question that a professionally photographed catalogue should look superb but you can get started by taking photographs yourself and setting up a website. Email prospective customers or post them a one-page flyer directing them to your website for the full catalogue.
събота, 7 ноември 2009 г.
WHAT SORT OF BUSINESS AM I GOING TO HAVE?
There are many questions to ask yourself when you decide to set up a business. These will range from ‘Why am I going into business and what do I want to achieve from it?’ to ‘How will my business operate?’The answers to the first question may be very complex and personal to you but the secondquestion is answered in this chapter:
The legal classifications of a business
Sole trader
You are on your own, no one to answer to, no one to tell you what to do – you are your own boss.You will, however, be responsible for purchases, sales, advertising and marketing, accounting, shopfitting, cleaning...
It is good to have someone to share the burden of work and to throw ideas around with. This helps to keep you focused and stops you taking the business off at a tangent. Beware, however: you need to be sure that your objectives and those of your partner(s) are the same. Be quite clear about the allocation of work, how much each has invested financially and how the profits will be split. Unless these matters are clear from the start, there will be arguments about who is pulling their weight and who is not, who has put the most into the business in terms of time, effort and money.
The other problem with a partnership is ending it. If you are undertaking a specific venture for a set length of time, that should be fine. If it is to be an ongoing venture, then when and how will you arrange to go your separate ways? Anyone who has ever been divorced will tell you that when a marital partnership breaks up the main asset usually has to be sold to give each party their share. In a divorce this will be the family home, but for a business … the business will be the main asset.
A limited company
This is a legal and regulated entity, which must be registered with Companies House.The advantages of being a limited company include:
◆ the potential to reduce your tax and national insurance liabilities
◆ greater personal protection financially should the business fail
◆ protection of your business name to prevent other people trading with it
◆ potentially a perceived higher status of your business.
The downsides include:
◆ extra administration and costs, both in setting up and ongoing
◆ the inconvenience of closer scrutiny of your financial affairs.
The legal classifications of a business
Sole trader
You are on your own, no one to answer to, no one to tell you what to do – you are your own boss.You will, however, be responsible for purchases, sales, advertising and marketing, accounting, shopfitting, cleaning...
It is good to have someone to share the burden of work and to throw ideas around with. This helps to keep you focused and stops you taking the business off at a tangent. Beware, however: you need to be sure that your objectives and those of your partner(s) are the same. Be quite clear about the allocation of work, how much each has invested financially and how the profits will be split. Unless these matters are clear from the start, there will be arguments about who is pulling their weight and who is not, who has put the most into the business in terms of time, effort and money.
The other problem with a partnership is ending it. If you are undertaking a specific venture for a set length of time, that should be fine. If it is to be an ongoing venture, then when and how will you arrange to go your separate ways? Anyone who has ever been divorced will tell you that when a marital partnership breaks up the main asset usually has to be sold to give each party their share. In a divorce this will be the family home, but for a business … the business will be the main asset.
A limited company
This is a legal and regulated entity, which must be registered with Companies House.The advantages of being a limited company include:
◆ the potential to reduce your tax and national insurance liabilities
◆ greater personal protection financially should the business fail
◆ protection of your business name to prevent other people trading with it
◆ potentially a perceived higher status of your business.
The downsides include:
◆ extra administration and costs, both in setting up and ongoing
◆ the inconvenience of closer scrutiny of your financial affairs.