Close or Carry On?

[Deleted User]

Hi, bit of a stranger here as haven't been on for ages.


We really need some advice and help.


We have a successful (well sometimes makes money) events management business.


In addition to the above we have a shop, with staff a few days per week, offering party goods and a bit of what we do in the main business.


The idea originally was that this would showcase our main business and make us more professional, i.e. business premises, somewhere for customers to visit etc.


Anyway the shop takes "0.00" absolutely nothing at all. We pay staff wages of around £100 per week for what they do (few hours). We are open 3 days - we cant afford to open more.


We don't have time to work in the shop ourselves, we work and have 3 kids to look after too.


Another local company is opening the same business, same store, 7 doors up from us.


What do we do? Feeling like we cant do anything now. We have been open 6 months, have put a lot of money into this shop, cant seem to get it to work even with advertising. And now this - should we just give up?


Please be nice as we are really not sure what we have done, as we were sure this could not fail. (P.S this wasn't the shop I posted about in the last post - we didn't take it on, we already had this one at that time)

[Deleted User]

Oh and nobody comes into the shop either, nobody other than staff.

Opinion

1. Have you spoken to your accountant? Have they offered any advice?
2. Does the underlying events management business turn a profit? If you ditch the shop, do you have a viable business?
3. How much is the shop costing you altogether per week/month/etc?

[Deleted User]

Thanks for reply, nobody is really giving us any opinion they say it takes time to get going - but we feel like we don't have time.


The shop costs £500 PCM and the staff costs are the same so £1000 PCM.


And the shop returns nil. We should get a profit from the events business, but we spend most trying to support the above and make it work - which it doesn't.


The only issue that concerns me is not having a business premises again - which is why we took the shop to use for multiple purposes I suppose.


Thanks again

Opinion

How long was the lease you signed? How far in to the lease are you? Have you got a break clause or any way of getting out of it?

You should get a profit from the events business or you do get a profit from the events business? If you separate the retail portion from the events business portion, does the latter turn a profit?

FoxyGuyHawoo

My layperson's thoughts (have run businesses, but only online):

~ You've got an awful lot on your plate as it is - 3 children, separate jobs, and a shop? And that shop is causing problems?

~ On the other hand: the rival shop 7 doors up might bring more customers to your road - you say you have zero customers. Bear in mind that similar shops are often right next door to each other on the high street. It optimises their respective spheres of influence and there can be a funny kind of synergy going on.

~ Your problems are in the 3 Ps somewhere. Unless there's something else really weird going on.

~ Tried eBay? Online search results? I'm not talking about Adwords or linkbacks, l've no idea how these work. I'm just talking about literally putting yourself on the map, that's all.

~ Haemorrhaging money on excess business / storage space was a major major regret in my last business. Major regret.

That's all l can think of, and these are just a layman's thoughts.

EDIT: P.S. I envy you for knowing how to employ staff and run a shop however well it may be going. That puts you far ahead of many online shopping channel sellers who wouldn't be able to cope with the learning curve of employing staff, VAT returns, keeping shop, etc.

FoxyGuyHawoo

Oh and one weird tip: bringing stock to store at home could possibly bring a stowaway mouse into the house. Ok that's the height of my knowledge, l'm bailing out of this thread.

[Deleted User]

Thanks for the info, so to answer questions, yes the events makes profit - but we spend it on the shop (some of it anyway)


The shop is located on a busy road, i.e. stop ten seconds and you nearly get hit by traffic (cars I mean)


There are very few passers by, originally we thought our current customers would come in and buy - but apparently not.


Our contract ends in December of this year and we can leave. I'm probably more disappointed that it wont work yet we were so confident that it would.

Mistral001

The fact that the OP's is not in the shop and running it themselves, must make it difficult. Can you take one full week off and just spend it in the shop and see what is happening with regards to staff, customers, passing shoppers etc.

PasturesNew

Shops that aren't open full-time aren't on people's radars. If you want something you want to go to the shop - not to go to the shop on the off chance you're lucky and they're open.

The shop needs to be marketed independently.

I think you've also opened in the "dead spot" of the year, with the peak season being October to December (Halloween/Xmas parties).

A shop might typically do marketing via social media, competitions, engaging in the local community (supporting local events, being seen out and about), media interviews/photo opportunities, writing advice columns in small/local publications, loyalty cards etc... as well as a full online shop/ebay shop.

What do the staff do all the day if there's nothing to do? They have the time to create a social buzz online, create listings, package up/send parcels ordered online .... if you've got people able to do that, or do you have "a couple of old dears who are at a loose end"?

paddyrg

The shop may act as a convincer for your other clients, maybe also as storage, office space, meeting rooms, show rooms, registered address etc., so there may be secondary benefits. When Beeching cut the unprofitable branch train lines to keep the intercity network, it cut a lot of the feeders to those profitable lines by forcing people into cars! Sometimes the value is more than the cash through the till.

That said, it's clearly not working so far, although 6 months isn't a long time. I'd be tempted to plan now for a December closure, get storage, start dumping stock slowly and bow gracefully out.