what will i do?

missandrea2009

i own a small business an independant off licence. have it up and going a few years now. everything was going good until the middle of '08. sales in december were down about 30% alone, things have really quietened. i owe the bank no money as i recently paid off the loan, however there is very little money in the bank (1K). i have bills at the end of this month for 10k i dont know whether to try and struggle on or just leg it now, any advice would be really welcome.

Darragh29

missandrea2009 wrote: »

i own a small business an independant off licence. have it up and going a few years now. everything was going good until the middle of '08. sales in december were down about 30% alone, things have really quietened. i owe the bank no money as i recently paid off the loan, however there is very little money in the bank (1K). i have bills at the end of this month for 10k i dont know whether to try and struggle on or just leg it now, any advice would be really welcome.

I live in an estate where there is a pub with an off-licence that is doing absolutely nothing and a Eurospar where they are taking all the off-licence business from the pub with the off-licence.

The difference seems to be:

Friendlier staff in Eurospar.

A huge difference in price. For example Eurospar can sell long neck bottles of Millar for 1 Euro, I know they are probably buying them up the North or wherever but 1 Euro is 1 Euro for the same thing, which costs 2 Euro in the off-licence.

Also, did you ever think of offering an online ordering system??? If you set it up so customers can pre-pay before 10PM, you can deliver up until whatever time you want to stay open until! That's a little loophole not many people know about!

m5ex9oqjawdg2i

I think it will be difficult for the next few years, but when things pick back up will you miss out? If you can afford it then try to soldier on, you may be rewarded after all the hard work.

Bandara

missandrea2009 wrote: »

i own a small business an independant off licence. have it up and going a few years now. everything was going good until the middle of '08. sales in december were down about 30% alone, things have really quietened. i owe the bank no money as i recently paid off the loan, however there is very little money in the bank (1K). i have bills at the end of this month for 10k i dont know whether to try and struggle on or just leg it now, any advice would be really welcome.

Hi Andrea

Firstly well done for not making the mistake most retailers do and ignore the problem and blindly plough on and start accruing losses rapidly before realising in a years time with €150k of debt that you should have got out sooner. There are too many busy fools out there at the moment.

The 'recession' is going to effect some industries more than others, yours for example is far more likely to do okay in the next while as people will not go to the pubs as often as they used to and home drinking will maintain its current level or even increase slightly in my opinion.

Don't panic because you've seen a downturn over the past 3 or 4 months, if your business is well run and you have your overheads and margin spot on you'll still do okay, maybe not the profits you did before but enough to keep you in a job that you enjoy and thats yours. Revise your staff budgets, get rid of some of them if you need to, and do more hours yourself for the next 3 months until the Christmas credit cards bills have been cleared and people venture out spending again.

I'd advise you do a complete stocktake now yourself or get an expert in to do it (if you need a number of someone reputable pm me), then in three months time do the exact same again, give the data to your accountant and get detailed management accounts for the period, you'll then get a crystal clear picture of your trading condition over the 3 months. Such specific information will make things a lot clearer in your mind and you'll get a strong idea if things are a runner going forward or not.

If they are not and you can't see them improving then sell the business and get out while you have a strong set of accounts from last year to get yourself a good price for it. Get your accountant to do one year accounts up until the end of June 2008 and give these to any prospective buyers.

A lot of your business is being eaten up by the Spars and Centras etc with their full off licences in convenience accessible locations, this is going to be reduced greatly with a LOT of such stores struggling very badly now and imo this year will see a huge culling of Convenience stores that are simple not viable without the huge deli trades they had propping them up before the building downturn etc. So I can see the competition in the sector being lessened somewhat. Spar for example closed/debranded 45 stores last year and there are currently about 40+ more stores on their last legs with huge debts (and thats just Spar, the maces and centras etc are all in the same boats)

Have you considered taking these guys on by offering more than the standard off license does? Why not give two bays of your store over to basic grocery and get a 1 meter fridge for dairy? I'm not suggesting diluting your status as an off licence but if I'm going out at night time to get a few beers and the missus asks me to get some bread and milk I'm not bothering going to your off licence for the beer and then Spar for the bread and milk when Spar does it all for me. Hit back if you can, offer everything that the 10pm last minute shopper needs, its actually quite a narrow range of products and you should be able to incorporate them easily enough. Expand your other offerings, boxed chocolates, fresh flowers outside the door (you can get them on sale or return). If you want to really push it out there get a small payzone machine in and you can sell phone credit, accept billpay and accept toll payments, the margin is tiny but it might increase footfall and there is no real cost involved in setting it up. Even a coffee machine on a free 3 month trial might be an option, if you sell ten coffees a day your going to make close to €110 a week profit.

I know this one might be teaching my granny to suck eggs but another one is the old Wine Club option, I know its hit and miss but depending on your area it might be a runner, get your main supplier to provide with with one of their knowledgeable people and advertise a tasting masterclass etc, get free stock from suppliers and get your customers to sign up, get them in, give them lots of tastings with explanations for all the wines etc. It might be a complete failure but its an added service that your supermarkets can't provide and its added value image for your store.

Sorry, I know I'm going on a bit but I hope you find some of this to be of use to you. Good luck with it and I hope everything goes well.

Edit - I'd also be approaching my landlord and asking for a reduction in rent, the last thing he'll want is an empty unit in this climate and if you present your case to him well he'll nearly have to do something for you.

shoutman

Great post HT, always insightfull and full of well thought out, knowledgable ideas. You should be charging

Hanley

+1 Stunningly good post

niceirishfella

Top post - and the rent review is a must!
Also, look at every other utility bill cost and all costs infact. Theres a thread here on savings on costs for business in this recession.