The economy hasn’t stopped the mults from opening new stores - why should indies be different?
In these austere times, are the multiples battening down the hatches and calling a halt to store expansion? Not at all. Every one of them is on the lookout for new sites to develop - particularly in our heartland.
Entrepreneurial independent retailers should be doing the same. It is my view that the recession has actually created opportunities in certain areas - by improving availability of sites and consumer demand for local stores, for example - so maybe this is the perfect time to be looking at a second, third or fourth store.
The benefits are undoubted. Economies of scale is an ovious one. You can use your increased size to improve the buying terms from your wholesaler and get better support from the major manufacturers. Being part of a symbol group also helps enormously - their advice and merchandising support can be invaluable during the acquisition process.
By definition, more stores means more headaches when it comes to staff, banking, administration, security and so on, but you should not be put off by such concerns - once you have the right people in place, you can delegate a lot of these tasks.
I remember being surprised just how helpful other retailers were when I was looking for advice before opening my second store. Part of your preparation should include a visit to two or three of these multi-site operators to talk through their experiences - the challenges they faced and how they overcame those obstacles. Generally speaking, you will be made to feel very welcome. Not only did I get some excellent advice during these visits, but, psychologically, I felt more confident.
Like everything in life, it’s all about preparation. I learnt very quickly that, once I had identified potential sites to acquire, the best way to research the potential was to drive around the catchment area, looking at the demographic profile of the local residents, weighing up the competition and assessing the traffic. The next thing to do is to get out and wander around on foot, looking for signs of anti-social behaviour and checking the busiest times of day for the store you’re looking to take on. You also need to assess the other retailers in the street or precinct. Chatting to local residents in the local pubs was also most revealing. It allowed me to find out what they liked about the current store and what they didn’t like.
In addition to extensive on the ground research, you also need to prepare financially. The kind of investment you are looking for will obviously depend on whether you are taking on the store for the short term or for the long term. The capital and the loans should be sufficient to not only cover the purchase of the business but also to finance increased stockholding and develop the fabric of the store inside and out.
Key to the success of a new store opening is the quality of the management team you appoint to run it. If you already have a tried and trusted, enthusiastic manager in your existing store or stores, it is advisable to have him or her involved in the acquisition. They know what you are looking for and can introduce those same philosophies into the new store - it’s an area that often needs to be handled delicately with the staff you are taking on.
And make sure you communicate with your new customers as soon as you sign on the dotted line - don’t wait until you open the store. Involve them in the decision-making process, let them know who you are and what your plans are for the new store, as well as listening to their concerns and wishes.
Finally, make use of all the modern technology at your fingertips to avoid the need to be in several places at once. CCTV, EPoS, accounting controls, temperature monitoring and so on, all allow for certain aspects of managing the store to be handled remotely. But don’t lose sight of the need for regular store visits to ensure you retain the element of command and control.
The benefit of experience has taught me to be bold and, with the extra advantage of hindsight I would have no hesitation in encouraging fellow retailers to take the plunge - as long as they do that all-important preparation.