My newsagent shop is in decline. How can I save it?
Q I am running a newsagent shop with a small amount of general retail space with essential groceries. There was a time when I was able to make a living from this, but now I find every few months I have to put some of my savings into the bank account as balances are declining. I really don't know what to do next?
AOne of the problems the recession has brought is a decline in general grocery sales in smaller shops. Customers now seem to only want to buy in the larger and discount stores. The first question I would ask is, is there is any other type of product that could be sold at this location? Is there a florist in the area? Is there a cafe in the neighbourhood? Would there be a demand for a small artisan bakery selling fresh bread and cakes every day?
I certainly wouldn't give up, but it may be a matter of removing some of the grocery range and dropping in a new product that has more potential within the limited space you have. What you do seem to have from what you describe is location and that is central to any retail proposition. So now you need to focus your attention on whether you have to tweak the current range or whether you have to completely exit from the current business but start a new type of retail operation.
I would suggest you attack the project with a degree of structure. Go to your local stationery shop, buy a "clicker" and sit in your car at the side of the street and count the footfall at intervals at different times of the day. Next you need to ask yourself what would most likely attract them into your retail unit and that may involve some degree of consumer research to determine what offers are missing from the area. Be careful the way you ask questions, for example: if you ask customers "would you buy X?", you will probably get 100pc saying yes, whereas if you ask "rate the following retail categories you would like to see in your area in order of importance", then you should get a much more accurate direction.
If all of that fails, then the next option will be to see if someone else is interested in leasing the shop from you, but I would encourage first to look thoroughly for options for yourself before you decide to hand the shop over to someone else. Best of luck!
Q I had started baking some unusual breads at home and selling them to six shops around Dublin. Typically, the value of the sales to these shops is approximately €50 per week and I was going to invest approximately €10,000 in fitting out a workshop I own to turn it into a bakery, am I doing the right thing?
AAnyone starting a business should be praised and you have taken the first difficult steps by establishing the product and production processes. The big question for you will be to determine if there is significant volume for you to justify the investment.
The sales from the existing shops are okay, but could not be described as radical. It is not clear how many products you are actually manufacturing so perhaps one of the opportunities for you might be to increase slightly the products you are making, which would drive sales on an individual store basis upwards.
It would be great if you could target each shop to be worth €100 per week to you, as that means the annual purchases from you will be €5,000 which is significant.
May I also challenge you to look at the food service sector? There are many great cafes and restaurants out there who simply don't have the time or space to make their own breads even though they would like to. Bord Bia will provide you with lots of advice on the food service sector and the opportunities that lie in this area. A call to them will open up a whole new channel for you.
Certainly having your own premises will eliminate the need to be renting premises. Does the facility have enough space to keep you going if the business grows successfully? If everything went wrong, and you lost your €10,000 investment, would it spell disaster for you or could you survive it? There is one key word in your email that certainly would give me confidence and that is the range of breads is unique and this is always a good place to be in the food business. Do let me know how things go.