Proper research, understanding your costs, and having the right team are crucial if you want to succeed in business. In fact getting them wrong are the three main causes of small business failures.
You might be starting from scratch, taking a hobby full time, or moving an online business into premises for the first time, but with around half of all UK start-ups failing within five years, making sure you get everything right before you take the leap is time well spent.
David Harris, Manager at Middlesbrough’s Dundas Market uses his experience of running a busy indoor market, supporting more than 25 retail and service businesses, and the latest research into business failures, to give you his top three tips for starting a small retail business in 2018.
1. Do your research
Getting this wrong is the main reason why start-ups fail. 42% of business failures said it was down to lack of research. They had not tested their business idea, their pricing and their location well enough before they launched. Talk to as many people as you can about your idea, particularly others already running a business, and not just to family and friends who are likely to support your idea however good or bad it really is. Visit lots of locations, talk to shoppers, talk to neighbouring retailers, talk to management in markets and shopping centres. Vince Gibson who runs The Sweet Corner visited every market in the North East before he chose Dundas Market for his traditional sweet shop.
Find somewhere to test your concept, maybe at a weekly or monthly market, before committing to a permanent pitch. Dundas Market runs monthly food and craft markets, vintage and handmade markets, special markets such as Youth and Halloween Markets, and offers free trials for one week in May as part of the national Love Your Local Market campaign. Brickyard Bakery was a regular at our monthly food and craft markets before it went full time in Dundas Market.
We only allow businesses to take a unit in Dundas Market if we believe they will be successful and the idea has to be right for a value for money market. We employ a balance of trade policy to ensure traders are not directly competing with each other and we also support them with a campaign of social media, public relations and events, to encourage more shoppers and boost their profile.
2. Understand all your costs
Make sure you take account of all your business costs, including all premises costs, and do not be caught our by extra personal costs such as travelling expenses or childcare. Dundas Market offers a small number of Enterprise Units from £60 per week, which equates to just £10 a day, on short term tenant agreements. It’s a great way to fix your premises costs. Making enough money is vital to success – 29% of failed small businesses ran out of cash.
3. Get the right support
Running a retail business is a nine am to five pm, six or seven day a week commitment. You cannot do it all by yourself. You’ll need the support of family or friends, or you’ll need to take on staff to give you a break and time to visit suppliers. Having the right people in the business when you are not there is crucial. 23% of small business failures put their lack of success down to not having the right team.
There are plenty of free sources of advice to help you develop a new business. If you are under 30, the Prince’s Trust can help, and they also have good online tools, which anyone can use, to help with things like writing a business plan. Enterprise Made Simple provides fully funded pre-start business training for anyone based in the Tees Valley, as well as a number of other very useful courses and support services, including getting your business online and using social media to promote it.