BUSINESSES FACE TOUGH MARKET
our tough economic climate, staying
in business is difficult, especially
for retail stores. The small retail
store has to offer something different
that the giants and other small
retail stores cannot.
do small businesses fail? There
are a multitude of reasons, starting
with the initial opening or purchase
of a business. Many businesses sell
because they are losing money as
the competition moves in an the
economy changes. A retailer has
to be constantly aware of changing
trends in the economy and cater
you are opening a store in your
area, you have to thoroughly research
the competition. How many restaurants
or flower shops can one geographic
area support? What can you offer
that the competition can't? Your
municipality can provide you with
a list of locations and their addresses,
and also with the demographics of
the area. What is the population?
Who is it made up of? What is their
income bracket? Two questions need
to be asked. Can I fill a need and
a niche in the market, and who are
my target market?
stores carry high overhead, so the
business must generate enough volume
and gross profit margins to support
paying even the rent. You have to
sell $5,000 to pay a $1,750 rent
at 35 percent gross profit. Most
people new to business don't prepare
a business plan and document their
costs, projected income and cash
flow. Those who do plan a business
in fine detail usually have a better
chance of success.
the right staff is essential to
operating successfully, because
your employees will make or break
your business. It's not that easy
to find the right people and cheap
wages are no substitute for paying
a little more for the right person.
They are hard to find and all businesses
experience this dilemma.
reasons include lack of marketing
skills, expensive, ineffective advertising,
trying to undercut the competition,
and offering no-profit or costly
specials that quickly dissipate
profits. Knowing how to market your
business and preparing a marketing
plan is essential.
a business without sound financial,
marketing, administrative and accounting
skills will soon lead to trouble.
Having a profession or trade is
not enough-a business should be
monitored monthly and problem areas
identified and rectified quickly.
This all takes experience and expertise.