How to Start or Buy a Retail Business, Enjoy Running It and Make Money --

SECOND EDITION

by Geoffrey Heard and Gordon Woolf

Contents

A message from Dick Smith 3

Chapter 1: Why a Retail Business? 9

You can make your fortune 9; The business person -- the entrepreneur 12; First steps 13; Can your small store compete? 15; Will you succeed? 15.

Chapter 2: You call these “business tools”? 17

Three ways to grow your business 18; 4Ps+1 19; 2 Keys and 8Ps 20; SWOT Analysis 21; ANSOFF matrix 22; Competitor Reaction Matrix 23; VENN diagrams 24; Hard dollars and soft dollars 26.

Chapter 3: Going into retail: exploring the idea 25

Specialist or general? 27; Competing with the giants 28; Three halfway houses: be small, look big -- franchises, Buying groups, Leased department 28; Matching you, your customers and the business 30; Businesses built on personality 31; Your prospective customers 32: Location, location, location 32; Destinations 34; Shopping destinations 35; Non-shopping destinations 35; Avoiding competition 36; Alternatives to the traditional store 37; Business from home 37; The virtual store 38; The market stall 39; The store of your dreams 42.

Chapter 4: The next step: looking 43

A ‘model’ business 43; Buy their advice 43; Business sales agents 44; A quick primer on profits 44; Now measure up your prospects 45; Questions to ask 45; What kind of business, what trade? 45; What size? 46; ‘A good family business’ 46; Why is the store for sale? 46; How good is the business? 47; Where and who are your prospective customers? 47; Statistics do not tell all 48; The local authority? 48; Look and count 49; What about competition? 49; Drive or walk around the area 50; Scan local papers 50; Where is the profit coming from? 51; What equipment is owned and leased? 51; Is there room to park? 51; Is it in a good position? 52; Lease terms 52.

Chapter 5: A new venture: starting a store 53

Finance, time and risk 53; Buy premises or lease 54; The lease 55; Lease duration 56; Permitted uses and negotiable conditions 57; Landlords and trust 57; The business plan 58; Advice 59; Keeping track of sales 59; Licenses 60; Sources of supply 62; Store fitout 62; Visual merchandising 63; Lighting 64.

Chapter 6: Buying your store: in detail 65

The figures 65; How stock changes the bottom line 65; Look at them the same way 66; Compare full year figures 67; Gross profit or mark-up? 67; How sellers gussy up figures 68; Look at the cash book 68; Goodwill 69; The equipment 69; What will the business cost? 70; How the cash flows in and out… 71; Borrowing money 72; Going to see a lender 72; Avoid strange finance deals 73; The lease 73; A typical lease situation 75; The contract of sale 75; Adjustments 76; Keep those receipts 76; The impact on your life 77; Taking over staff 77; Licenses: all the bits of paper you need 77; With one week to go 78; The stocktakers 79; Walk in, walk out 80; Insurance 80; Public liability a must 81; Trial week 81; Change-over Day 82.

Chapter 7: Running your store 83

Day 1 -- be ready for hard work 83; First -- secure your future 83; Planning for disaster 84; Under new management 84; Store layout 85; Store fitout 86; Keeping track of the cash 88; The cash register (till) 89; The float in cash 90; Bookkeeping 91; Daily cash report 91; Cash book 92; Check analysis book 92; The reconciliation of accounts 94; Cash and debit card receipts 96; Sales/VAT/GST taxes 97; Budgets 98; Break-even point 98; Dealing with customers 98; Like going on stage 99; Bags and wrapping 100; Making change 101; Giving credit 101; Buying stock 102; Dated stock 103; Dealing with reps 105; Cash-and-carry 105; Cash vans 106; Check quantities 106; Things that go wrong 107; Cash purchase corrections 108; Pricing 109; Inspectors 110; Staff 111; Demonstrate and train 112; Parting company 112; Shoplifting/stealing 112; Tale of two thieves 113; The best defense 114; Security 114; A panic button 115; The armed hold-up 115; Price labels 115; Keep it clean 115; The stock room 116.

Chapter 8: The internet store 117

Use the web as your catalog 117; A local store supplying nation-wide 118; Full virtual shopping store 120; Promoting your web site 121; Getting started 121; Payment on the internet 122; Other uses of the Internet 123; The future 124.

Chapter 9: The grab-bag 125

Stores based on operator skills 125; Books -- new and used 126; Clearance stores 127; Greeting cards 128; Gift shop 129; Off-price stores 130; Clothes 131; Music and video 131; Toys 132; Hobby and model stores 132; Secondhand or used goods 133; Hire and rental 133; Milk, bread, newspapers and cigarettes 134; Confectionery 135; Preparing food 136; Bakery, cake store, doughnuts, pretzels… 137; Restaurants, cafes 138; Cold drinks & ice cream 140; Different kinds of stores 141.

Chapter 10: Growing: planning & first moves 143

Three ways to grow your business 143; A key concept -- mental menus 144; That trial week -- the “transfer of loyalty” 145; Strategies: Advertisements, Sales, Discounts 145; When you can cut prices 147; Your customers 147; The ladder of loyalty 149; Plan to succeed! 150; Going for it 151; SWOT -- Analysis and Synthesis 153; Calculating three way growth 156; Action stations 157; Announcing yourself 157; Actions to build the business towards short-term goals 161; Actions to maintain and protect the business 162; Your guarantee 164; A pain in the stomach can be a big win 165; Scuttling for cover loses 166; The basic rules for your guarantee 168.

Chapter 11: Proven ways to grow your business 169

Product 169; Sampling 169; Bundling and unbundling 172; Place 174; The best I have ever seen (I wish I’d thought of it!) 174; More stores 177; Agencies or partnering -- in other folks’ stores 178; Relocate 179; Price 180; The closed door sale 180; Offer specials 182; People/Professionalism 184; Database marketing 184; Keeping in touch 185; ‘Loyalty’ programs 187; Promotion 188; Five guiding principles of promotion 189; Five steps to promotions that will pull their socks off for you! 192; Measure the results 197; Brainstorm! 199; The magic “total purchase give-away” 199; Random acts of niceness 200; Exploit events and occasions 201; Make your own events 202; A word of warning! 203; Sponsorship -- who is sponsoring whom? 204; Partner people -- complementary traders 205; Non-competitors 206; Your competitors 206; Profit-making promotions 207; Gain cred -- share your expertise 207; Selling your knowledge for profit 208; Helping sales by giving away information -- free 208; Media 208; Mass media -- local newspapers, radio, TV 208; Dominate a medium 209; Create your own medium 210; People in funny clothes with bells 212; Just totally outrageous 212.

Chapter 12: Advertising for Success 213

Attracting customers -- the reason for all advertising and promotions 213; The Advertising Framework 213; Creativity -- reality or myth or ? 214; Some broad guidelines 215; The headline/offer/appeal/key illustration 215; The body text, the evidence 216; Call to action -- changing behavior 216; Key graphic element -- structure to grab and hold attention 217; Real life examples 217; Here’s a classic -- it pulled its socks off! -- Anyone can enjoy the gift of flowers… 26 pages of real life advertisements analyzed, the guidelines applied, ideas extracted and converted to other uses, and made over to help you make the best of your own ads for newspapers, flyers, direct mail, etc.

Chapter 13: Selling your store 244

A broker’s tale 244; Agents/brokers or direct? 245; Dealing with prospective buyers 245; Final days 246; The change-over 247.

Index 249

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