Problem solver: Making the right move can help fashion store footfall
Q I am 27 and have just returned from working abroad in the fashion industry. My parents have a retail shop unit in a poor location, but have given it to me at cheap rent. Sales are abysmal, as the footfall I need isn't in the area. Do you think I can build up the business over time?
A It's difficult to say without visiting the area and getting a feel for it. However, from the picture you paint there is a significant doubt in my mind as to whether you can ever create a successful business in this location. The other possibility is that, while it might be possible, it may take you years of running at a loss until you eventually achieve enough footfall.
There are so many contradictions when it comes to location. The general rule of thumb is that if you are in a primary location, life becomes a little easier as you have thousands of customers passing your door on a weekly basis, and your job is to persuade them to walk through your door.
Being located in a secondary location means that you will have to spend an awful amount of money attracting people to that location.
There are plenty of examples of successful business in poor locations, but in many of these cases the owners have worked tirelessly over a long period to build the footfall, and they have a unique offer. If you are telling me that your fashion outlet has a range of brands that are in demand, and not available elsewhere, then I would probably say you have a fighting chance.
On the balance, however, it could also be a case that the lure of the cheaper rent will make it impossible for you to ever have a large business at this location. If I were in your shoes I would be siding with moving to a higher footfall location and paying a little more for rent. Your sales will be a multiple of what they are currently and you should be able to afford the higher outgoings.
Q I run a successful business with my brother. I am 60 and he is 38. Can you give us any advice on how we might structure the business for the future?
A This type of query comes in every six months or so and I am sure that there are many businesses out there that can relate to what you are saying. In some cases, it is the founder who wants to move on, and with other businesses perhaps one of the owners who wants to move on, or at least take things a little easier.
The fact that you have raised the issue in the first instance is a real positive. Far too many businesses leave it until it is too late before they do anything about this. Start by thinking through what you would most like to do. Some business owners prefer to gradually step away from the business, or perhaps keep on a less active role over a prolonged period of time. Others like to walk away and make a clean cut and possibly pursue other interests. Think about ideally at what age you would like to do this. I am assuming your brother is happy to stay on, however selling the business off could also be worth considering if this is what you both wanted.
There are many options to be explored.
In Superquinn, one of the things we did at a very early stage was set up a family council and got some expert external advice on options that were open to us. I would recommend that you do this as it would allow you to put all options on the table and perhaps throw up some new ones neither of you might have thought of.
Whatever decision you make, you must be aware that it can take many years to transition out of a business without jeopardising the stability of the business itself. Early planning and lots of clarity will really help with this.
One final piece of advice - do put as much energy into working out what you are going to do in your spare time as you do to planning your exit from the business. It's really important that you enjoy this also.
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