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I Want A Shop – How Do I Start A Retail Business?

I received an email from someone who wanted to own a shop but she didn’t know how to start a retail business.

I thought this was a common enough problem to make it worth blogging about my advice.

The lady who asked the question already knew what type of shop she wanted. If you’re a budding retail entrepreneur but you’re not sure about what to sell, you need to decide the broad category first.

General Thoughts About Retail Businesses

Setting up a business can be a great idea but it can also be a way of losing a lot of money, especially in retail.

I feel that the first thing you both need to do is to read two or three books about retailing and what makes one shop successful whilst others struggle.

Here is a link to amazon.co.uk or amazon.com for retail books in the business section.

As well as learning more about how to start and manage a shop, I think several aspects are particularly important. [click to continue…]

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Search Marketing versus Outreach Marketing

I teach my clients that there are two main types of marketing – search marketing and outreach marketing.

What Is Search Marketing?

Search Marketing is doing everything necessary to be found when your potential customers begin their search for information about their problems, together with possible solutions in the form of products and services.

It is sometimes called inbound marketing because you are trying to pull customers into your business.

The main method of search marketing in the 2010s is to be found on the first page of Google or the other search engines through a combination of being found in the organic search results based on the ranking algorithm or by paying to be on the page through pay per click schemes like Google Adwords.

Another popular way that your customers will find out about your business is by asking their family and friends for recommendations. This also includes social media activities along the lines of “Does anyone know of a good small business accountant in Birmingham?”

What Is Outreach Marketing?

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Why I Use Mind Maps In My Business Coaching & Advice

Over the years I have experimented with using mind maps as a way to store ideas and knowledge.

In 2017, I made the decision to make mind maps an integral part of my business coaching and advice process.

Generally I like people who deal with me to use Skype, at least some of the time because there is a facility that lets us share screens. This means that I can show you what’s on my screen or you can show me what’s on yours, even though we may be separated by hundreds of miles.

Using mind maps is just an extension of that principle.

Why Use Mind Maps?

When I was doing classroom training, I used a saying that went along the lines of…

  • Hear and forget.
  • See and remember.
  • Do and understand.

Business coaching is all about help business owners do more to solve business problems and issues. This involves analysing the situation, identifying potential actions, selecting the best or most appropriate steps and then doing them. It also then involves reviewing the implementation and seeing how well the original issue has been solved and then identifying what else needs to be done.

A mind map helps to do all those steps because it doesn’t rely on you taking accurate notes of what I’ve said or what we’ve discussed or, even worse, trying to remember on your own. [click to continue…]

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From time to time, a business owner will contact me and ask for a free Business SOS because their business has cash flow difficulties.

The first issue we face is the problem of diagnosis. A business may be experiencing cash flow problems for a number of different reasons and curing the problem for the long term means getting to the root cause.

Cash flow difficulties normally mean that the business is struggling:

  • To pay suppliers when they chase for their money after selling on credit, or
  • When another supplier insists on payment on order or delivery and no money means no goods, or
  • When the business owner is struggling to find the money to meet the weekly or monthly payroll, or
  • When  the business can’t meet a periodic payment like the quarterly rent or VAT, or
  • When the business owner wants to take money out of the business for personal use and the money isn’t there.

The Causes Of Cash Flow Problems

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My Business Is About To Fail, What Should I Do?

I’m sorry to hear about the serious problems with your business.

The big question with any struggling business is whether you are in the early stage of decline or whether problems have been going on for some time and have used all or virtually all of your spare cash in the business together with any money you can invest or lend to the business.

From your query, it sounds like the second so turnaround options are probably not available.

In that case you may have to follow an insolvency procedure.

This depends on the legal form of the business in the UK. [click to continue…]

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One of my favourite business gurus, Jay Abraham contrasts tunnel vision with funnel vision as different approaches to finding ways to improve the business.

Tunnel Vision versus Funnel Vision

Tunnel vision is the process of focusing entirely on what’s going on in your profession, trade or industry. You watch your competitors closely together and  when you see something that looks a good idea, you copy it.

You should also keep an eye on best practices from your sector in the rest of the country or world, depending on how widely you compete. Many local businesses don’t bother to look at what companies are doing in other big cities and, as a result, they miss out on ideas that they could adapt.

Funnel vision is the process of taking a wider perspective on business ideas and best practices. You keep your eyes open and watch how other types of businesses deal with you, your family and friends. You also keep an eye on the media to widen your scope further. If you see a good idea that comes from outside your industry that is helping to achieve an objective you want to meet, you ask yourself how you can borrow or adapt the idea. [click to continue…]

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What Should You Do If Your Business Is Losing Money

If your business is losing money, you have a situation that can’t be sustained indefinitely. The clock is ticking and, unless changes are made, your business will fail.

The Cash Burn

In the days of the dot.com bubble in the late 1990s, a new measure became the rage called the cash burn, measured in months.

This was the number of months the business could continue to trade as it currently was, before it ran out of cash.

This was simply the amount of funding available divided by the monthly cash outflow.

If there was £80,000 in the bank and the business was using £20,000 of it a month, the cash burn was 4 months. If nothing changed, then the following month, it would be three months as the cash would have dropped by £20,000.

This meant that an end date could be calculated. If your cash burn at the end of April was 4 months, then everything was over by the end of August unless:

a) the net cash used changed for the better;

b) more money was invested into the business to give it an extended life.

It’s simple arithmetic that halving the burn rate, from £20,000 to £10,000 per month extended the life of the business. The £80,000 = 4 months became 8 months and that gave much more time for bright ideas to be thought about, implemented and improved before the crunch.

The Break Even Point

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The best business advisors and coaches will tailor the advice given to business owners depending on the particular situation and the needs of the business owner.

Basically there are two options:

  1. The advisor or coach has a well defined process and the client is expected to bend to fit in with the process. As far as the coach is concerned “it’s my way or the highway”. This is perhaps best typified by the traditional approach taken by E-Myth coaches where the entire process is so systematised that it can be delivered by inexperienced people with few qualifications. The system is everything and, therefore, deviating from the system isn’t allowed although there are some choices allowed within it. Michael Gerber has made a great virtue of this turnkey system in the past as he created the McDonald’s of small business consulting and put his ideas into practice. Please note, I don’t know if the E-Myth coaches still work in such a regimented style. I feel it’s also an approach that you can expect from many of the advice based franchises since their strength is in the franchise system and the way to protect their reputation is by making sure that the system is followed closely.
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  2. The advisor or coach is well qualified and has plenty of experience and is ability to adapt to the individual needs of the business owner. It would be wrong to say that there isn’t an underlying process, approach or body of knowledge but the focus is on the client. Here the emphasis is on the skills of the advisor and not the system.

I don’t think you’ll find it hard to work out which camp I fit into.

I very much believe that advice should be tailored to the business and the business owner. Change is hard and, as far as I’m concerned, it doesn’t make sense to put unnecessary obstacles in the way.

I have a natural affinity to Theory Of Constraints (TOC) style thinking. What is the biggest thing holding back the business? How can we fix it or at least maximise the current potential? When that’s done, what’s the next biggest constraint?

It’s about aiming to deliver change and improved results quickly. To identify where the low hanging fruit are and then to pick them.

That’s not to say that I don’t think there aren’t advantages in starting at A and gradually moving through in sequence to Z. If a business owner wants to make a radical overhaul of the business and there is no urgent need to get something fixed, starting at the beginning is usually the most efficient way.

Years ago, I developed a coaching approach I called the Eight Pillars Of Business Prosperity which looked at every aspect of your business.

In the ideal world, I liked to start with Pillar 1 which was about establishing your critical numbers or key performance indicators (KPI). As far as I was concerned, this area is under-developed in many small businesses and it helped us to find out where a business was and we could identify an initial set of benchmarks that allowed us to monitor progress.

However if a client had a major customer service problem, it made sense to jump straight into Pillar 7 (about your team of employees and suppliers) and Pillar 8 (the systems and processes in the business). I’d still want to set and monitor some KPI for customer service at the beginning but we wouldn’t worry about all the other aspects of the business until we could see real progress on the customer service issues.

Getting Advice From Me

I no longer offer the full Eight Pillars coaching because it was killing me to keep up-to-date with the latest ideas in all the different areas.

However, I offer a free 60 minutes consultation to business owners in the UK which I call a Business SOS. Together we’ll look at your particular problem and I’ll give you help and guidance if I can without any obligation or expectation that you’ll become a client.

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The Three Ways To Grow A Business

The Three Ways To Grow A Business Model is one of the most useful ways for thinking through the options you have to increase the sales value of your business.

It has been made famous by American marketing legend Jay Abraham although I’m not sure he can claim to have invented it as it arises from the arithmetic within a business.

The Three Ways To Grow A Business

The three ways to grow a business are:

  • Increase the number of customers who buy.
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  • Increase the average sales transaction value.
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  • Increase the number of times a customer buys.

Often when people think about growing the top line, the automatic focus is targeted towards winning more customers (method 1) and little attention is given to getting more sales from the existing customers in terms of selling more and more often. [click to continue…]

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I offer business owners based in the UK, a free Business SOS consultation if they feel they or their business is stuck or struggling.

The Business SOS Offer

This is a 60 minutes conversation that can be on the telephone although I’d prefer to do it over Skype because it means that we can share screens.

We’ll have a look at your difficult issue together:

  • Have you made the correct diagnosis of the underlying problem?
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    This is harder than you might think because you’re too close to your business and too emotionally involved. If it’s a big problem, you’ll be desperate to find a solution which may mean that you snatch at the first reasonable solution that occurs to you or one that’s suggested to you by someone selling you something.
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  • Have you identified a solution that can fix the underlying problem?
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    Even if you’ve accurately identified the underlying causes, you may have too many or too few ideas about what to do to fix it. You need objective advice from an experienced professional. We all have blind-spots or things that we’re irrationally committed to until someone else identifies the flows in our logic.
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  • Have you implemented the solution effectively or do you need help and advice on how to do it?
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    It’s easy to say that you’ll do something but it’s much harder to actually do it. For example, did you think that a website was the answer to getting more sales before you learnt that you needed to understand about ways to get traffic to the website like search engine optimisation or pay per click strategies or social media? Or found that more visitors don’t turn into more sales or enquiries?

There’s no pressure to buy my services. I learnt a long time ago that I can only help people who really want to be helped.

The SOS stands for Second Opinion Service and that’s what it is. Just as you might go to see a second doctor if you don’t like the originally diagnosis or prescribed treatment, you can talk to me.

If my second opinion is the same as your first opinion, you may not like it but you’ll have more confidence that it’s correct.

If you’re in one of those businesses that make it hard for you to commit to spending an hour in a meeting, the Business SOS can also be done as an email service.

Check out the Business SOS offer.

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