Knowing When To Grow And When To Hold
Posted on June 4, 2008 - Filed Under Business
Bank interest rates being favorable today makes expansion very tempting. How often have you seen your favorite eating establishment open a second location only to see both locations go out of business? The second location being successful will depend on either spreading the current management and owners thinner or hiring employees that may or may not have the same expertise to run the business. Oh, they maybe able to run it “in the ground.”
If you can restructure debt at lower rates, great! I am addressing taking on more debt in uncertain retail times.
Have you gone to a mall lately? No problem finding a parking place, right? Have you ever seen so many sell ads flooding your mailboxes as in recent months. Retailers are hurting. I see buyers searching for bargains on leftover holiday dresses in May and June, perhaps something they should have been doing all along.
It takes careful monitoring of current expenses not easily accomplished when the owner has to monitor both investments. Often the fact that the owner has taken such pride in growing the business based on the success of the first location that they stay and invest way past the point of any hope of return.
Currently with the rising fuel prices, consumers are being more careful with their disposable income portion of their household budgets. So business owners need to monitor and use the same discretion in their inventory buying, computer upgrades while looking for trends to change in consumer purchasing.
I find that while in the “wait and see” mode that some very good purchasing opportunities have arisen. Suppliers are discounting while I have cut my profit margins drastically as well.
My goal is to meet my monthly gross goals while not cutting employee hours which is a delicate balance. On many of the Clearance Items I welcome a break even point to allow for the upcoming season arrivals.
We continue to offer flat rate shipping and did not increase our rates on May 12 when the USPS raised rates and made it know in our next email to our patrons. In addition; we email our previous customer about new arrivals and coupon promotions. Our excellent customer service and quality products have built afforded us to build a very loyal customer base in a very short period of time.
Our customers feel that they can call to have garments measured or to discuss our suggests for an upcoming occasion. They have become more friends than patrons and have learned to trust that if we do not have a particular size in a style they need we will go out of our way to find it elsewhere for them.
Do we loose business by sending them to a competitor? Perhaps, but that is a chance you take when you want to excel at providing excellent customer service.
Ask yourself what can set you apart from your competitors? Can you expand that product or service?
Failure is not an option for most of us that have taken the plunge into starting a small business so more than ever we need to be creative in our buying and marketing. Tough times call fro tough measures and even tougher monitoring of expenditures.
Mary Riggs is the Owner of Cute as a Bug Boutique in Hickory, NC
http://www.cuteasabug.biz
Tags: expansion, growth, monitoring, Business
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