So, the result of my conversations with Duncan Sutherland on whether you could piggyback a successful bricks and mortar retail outlet on to a successful e-tailer like Bigoffers.co.uk was that Duncan persuaded me to have a go. Bigoffers opened its doors in the Dalry area of Edinburgh last week. The retail shop carries a wide range of consumer products all at attractive discounted prices. Looking around, you’ve got to be amazed at some of the terrific value for money offers in there. The opening day was quite busy and of course Duncan and I were there to get instant feedback from the most important and knowledgeable critics of a new business – its customers.
So, how do you plan such an opening? You need:
· The right geographic location
· A location with a good ‘footfall’ – footfall is the number of potential customers that walk past a retail location and might be tempted into an unplanned visit. Remember that one of the main reasons for having bricks and mortar in which to display your products is to encourage impulse buying. So the number of possible impulse buyers passing close to the shop is key
· A first class supply chain to maintain a healthy stock of products for customers to buy. As they say in retailing, “If they can’t see it they can’t buy it”
· Premises at a sensible cost – the riskiest part of a retail start up is probably the contract you have to sign for the premises you rent. After all if you sell nothing and shut up shop after two months, you still have to pay the agreed rent to the landlord for the length of the terms on the contract
· The right people to manage and operate the outlet
Now I thought we had got a good solution to all of these essential ingredients. It turns out that one of them will remain unproven for a while.
After all we know that the Dalry area holds a lot of people looking for excellent value for money in discount outlets.
The supply chain is already in place with other companies, either in my hands or associated with me in some way, well-placed to provide stock from well-developed relationships with existing suppliers. (Remember we have the advantage of taking established products into a new market.)
Premises at this time in the business cycle and given the credit crunch are, frankly, going for a song. Landlords are willing to negotiate rents low enough to reduce risk for the tenant even if they only cover the cost of keeping the property wind and watertight.
As for people, well first and foremost we’ve got Duncan to cast his beady eye over the venture. In the marketplace right now, again because of economic circumstances, there is a huge pool of talent looking for work. There are new graduates and people let go by companies that are tightening their belts and down sizing. They are all keen to find exciting and interesting work. So we can definitely get the quality of person we need.
You can now see the one crucial matter we haven’t tested properly yet – footfall. We were not to know that our opening of the outlet would coincide with snow that made Edinburgh more or less grind to a halt for a couple of weeks. So we shall see how things go when the thaw comes; but I feel confident that we have got the risk as low as possible and I think the idea will fly.
Tip from Shaf –
Be prepared if you are going to set up a new retail outlet whether it’s a barber shop or a department store to work harder than you have ever worked before. Entrepreneurship is nine parts perspiration to one part inspiration.
If you have confidence in the people you need to make a venture work you are in the best shape possible.
