How can small retailers avoid the seven reasons most fail?
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Doctor’s blog.
While the economy and online competition often take the blame when neighborhood boutiques close, the owners in most instances were in over their heads. Yes, barriers to starting a business have lowered, but the causes of failure are still the same.
Here are the seven biggest problems small retail businesses face:
Going it alone. You can do the jobs of two or three people, but you can’t be two or three people. You need someone who can help you do the multiple jobs so you don’t burn out.
Wrong partner. You need to know what each brings to the table, what you’ll do with disagreements, and exactly who will do what. Opening a new business is a rush, but when that rush fades in a few months, you both need to be bound to each other in order to succeed. Your partner isn’t an employee you can fire easily — especially if you’re married to them.
Wrong location. Few of us know about correct egress and ingress to a center, traffic patterns, and demographics.
Enamored with your products. It’s wonderful to curate a great assortment of products from all over the world, but museums are non-profits. You need to be able to sell the merchandise.
Not focusing on the fundamentals. If you don’t want to learn those basics (Profit and loss, breakeven analyses, cash flow, etc.) that’s OK, but you’ll have to pay someone to do them for you.
Not managing the people. Your job isn’t to be the owner. Your job is to manage and train your people so they sell better than you, consistently delighting and surprising your customers.
Not leading by good example. No long lunches, no bringing your three-year old to work, no extended texting with the friend/family, no going home early — employees will see you and do likewise.
If you’re serious enough about competing, you’ll run your store like a business and not like a hobby.
DISCUSSION QUESTIONS: What do beginner entrepreneurs most underestimate when opening a store? Beyond the seven listed in the article, what other surprises wait in store for new business owners?