The best advice governing investing in your own business is easy: it should be an ongoing activity – it should be under consideration every month of every year.
You may not actually DO anything for months or even more than a year at a time but it should be part of your ongoing business thinking.
When to invest is likely to draw the response ‘when we’ve got the money’. That’s entirely reasonable, but it’s only part of the picture. Discuss this with your accountant and your bank, both of whom should be delighted at the prospect of a growing client.
Organic growth – where you grow the business by doing more of what you are already doing is both satisfying and comfortable – you know what you are about and you probably have some ideas of how to grow. But it often has limitations. Growth may be prevented by lack of space and/or a lack of alternative premises. This is especially true for retailers. Equally if you don’t like what is available it’s useless to you.
Keep an open mind
I’ve spoken to a lot of owners of small groups of shops, eg three or four outlets in one county. They have always started with one store and expanded by applying the same business model to another town and then a third but none of them planned to grow this way. This growth model is dependent on availability You would be very ill advised to take over premises just ‘because they were available’ but you might equally be making a bad mistake to turn down an opportunity because it’s come a little too early for your plans.
Keep your premises updated
This is particularly true for retailers but it applies to everyone. If your premises look a bit down at heel, it doesn’t matter how brilliant a job you do, some and prospective customers are going to down value your excellence. That’s a rotten reason to miss out on a new client. I recommend bringing a fresh set of eyes into play. Another small business owner will give you an honest assessment, a favour which you can return. You may be absolutely amazed at what someone else sees, hears or smells.
Don’t be tempted to put off this expenditure. A visibly worn carpet could be losing you turnover every week but nobody is going to tell you (except maybe the owner of a carpet business). You can do partial refurbishments over time to keep the standards up without the costs being a cash flow squeeze. I have been recommended a tub of sugar soap – you can clean up the walls with warm water in jig time without actually repainting.
What other areas of a business demand investment?
The first answer is your people. That includes you the business owner. The fastest way to expand a business is to motivate and enable you and your people to make more sales – a statement of the bleedin’ obvious, but vital to keep top of mind.
Start with what you personally want or need. Do your sales skills, your merchandising experience and other skills specific to the business still stand up to scrutiny? If not – and that is often the case with people who have been running their own business for some years – get it sorted!
Retailers can call upon the skills of their suppliers’ reps who can retrain you in the above. It’s what they are experts at. Non-retailers may find their suppliers are keen to do the same in their different disciplines. It’s somewhat embarrassing, perhaps, but it is free. But you may need training in a whole new skill set. Your existing skills may have been superseded by technological change such that your 18 year old staff member has more practical knowledge of how the business operates than you do. That’s not a comfortable thought and for sure it’s a rarity but it can happen.
If this proves valuable for you apply it to any other staff members who want their skills updated. Incidentally, you should not be worried about making your staff more skilled and hence more valuable to competitors who will then poach them. If anything, it’s the other way round. Employers who invest in their staff with training typically report that it makes them more, not less, loyal. At the same time, failure to invest in your people is a factor in staff disgruntlement which makes them look for a new job. Note that your staff will talk to competitors’ employees and they don’t just want to know about rates of pay.
Look hard at the opportunity offered by concessions
If your own premises have the necessary space, could you bring in another business which would attract more and different customers and give someone to share overheads? Might this justify expanding by taking on larger premises than you actually need? Equally, look at being a concessionaire yourself. This can come in a wide variety of forms. The classic examples are shop within a shop or shop next to a shop. So long as both parties need to recruit a similar customer base there are lots of synergies. The more you are in the same overall market without being competitive, the better.