Intensive care for independent retailers

For some reason it’s a call we’re received more in the last six months than for several years. It’s the call from a small independent retailer asking for our help because their business is in trouble. Sometimes it is clients calling and other times it’s not. All the calls follow the same track. “We just can’t seem to get out of the ditch.”

The shame in their voices is heartbreaking.

The callers are usually relatively new to their businesses – under two years in most cases. They’re had successful careers elsewhere and have bought the business for independence and to bring to their own business what they have been paid salaries to do elsewhere. In many cases they’ve been going to call someone for help for weeks and even months. So by the time I get the call things are desperate.

I’m no business turnaround expert. Far from it. It’s my 24 years in the newsagency business and that my software company serves about 1,300 newsagents as customers which gets them calling me.

Right now I’m aware of 14 of these businesses in what I would call intensive care. The work we do can vary from providing advice through to physically getting into the business and making changes to boost sales and or cut costs.

There are several factors causing the problems this year more so that others: a tougher than usual retail climate; years of drought; tougher supplier policies; greater competition; and, ignorance about business.

It’s this last factor which causes the most damage. Poor or ill considered business decisions which the owner does not have the capacity to weather. I’ve made plenty of mistakes in business and still do almost daily. The best ones are those you discover for yourself and learn the most from. The problem with some businesses is that there is a considerable lag from the making of the mistake to discovery and the inability of the business to cover the cost of the mistake.

For a business to make our intensive care list and encourage our help it needs an owner who understands the problem, is open and who is prepared to make tough decisions. It’s tough though because not matter what you do sometimes some small businesses cannot compete against the might of the major chains.

We take this situation very seriously. An independent retailer failing not only impacts the owners and customers of that business, it also impacts on their suppliers and other independent businesses in their space.

The Federal Government ought to be researching the plight if small business and independent retailers. Professional research would, I suspect, uncover serious problems which if not addressed could wipe out the savings of hundreds and even thousands of families.

While big business had been successful in using competition policy to get access to products and services outside their reach, small business has lost the economic fundamentals which kept them alive.

The answer is not handouts or subsidies. The answer is in smarter business support by government and the community. It is also pressure on big business to be fairer in its dealings with these small businesses.

In the meantime, we’ll keep working on the intensive care group. One learning for us is the creating of some basic measurements our clients can use to check their health – in a non business way because as soon as we put it in a report or make it a function of our software they’re think the computer does it all and that they don’t need to engage.

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