Sunday 22 July 2018

The owner's commitment is what will drive sales

Q MY retail clothes business has been losing around €5,000 per year over the last two years. I have two staff with myself and our biggest challenge is that customers aren't coming in in the numbers they should. What should I be doing or is there any hope?

A Yes, there is always hope, but you also need to be smart about what you are doing. From the other figures you have given me, I can see that your sales are very tight and in my opinion you have too many staff hours. See if you can reconfigure the staff hours to create savings, but only do this if you can be sure it is not going to affect sales.

There are some other key questions to ask. How is your gross margin compared to the industry average? Is your product range pitched at the correct level for customers? Are you buying in quantities of clothes that are too large and you end up discounting the majority of them in a subsequent sale? Are you as involved in the shop yourself as you should be?

The sales level in most shops is determined by the passion/energy of the owner/manager. Set yourself sales targets and drive the business towards these figures.

Develop a calendar of activity to work with your existing customers and to attract new customers through events like fashion shows and new season launches. My experience in Superquinn was that working with your existing customer base will always generate faster and larger results.

This is the group that will help you out of the current dilemma so the use of text data bases and a strong calendar of events for these customers will help you.

Q I run a hotel together with a relative. We don't see eye to eye and disagree on many aspects of running the business. The end result is public squabbles, confusion among staff and now, when we need to be focused, deep divisions in our outlook for the future.

AI am sorry to hear this, but I have encountered it on a number of occasions. I think there is no point in me saying that you should sit down with your relative and work things out. Had the solution been this simple, you would have done so.

Why do the two of you need to work within the business? Is it not possible for one of you to leave the day-to-day operations while still retaining their shareholding? That could be a practical solution and I am sure in the current environment one of you would relish the opportunity to leave.

As another option, is it possible that the business could be expanded, with one running one element and you a separate division? That would allow you to operate independent of each other and develop your own parts of the business.

Whatever the solution is, you both need to bring the issue to a head. The current arrangement simply cannot continue; your staff will become disillusioned and indeed the overall direction of the business will suffer badly, which I think you are already indicating is happening.

Your own personal differences will bring the business to its knees and potentially close it.

While the solutions may seem harsh, with one of you having to leave the business, you will both look back in a few years' time and realise that it was entirely the correct thing to do and you will both end up with a much better quality of life and job satisfaction with whatever you go on to do in the future.

Irish Independent

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