I watch a lot of those business startup and business troubleshooting programmes on TV with interest and I have run my own business for a number of years now so I feel I have a pretty good idea of what makes or breaks a new business. I also feel I can spot where a lot of small businesses are going wrong. Normally the sort of problems they are having are quite blatant and it's surprising that the proprietors don't realise what they are doing wrong.
I live just off quite an affluent high street and chat to a number of the owners of the shops and I was really surprised firstly by how high the rent was on those shops but also how high the business rate tax was. It kind of made me think and I did a few sums and a lot of the businesses simply don't work on paper. It's not just me that has done this as the guys I talk to have done the same thing. If you add up the sum of what they sell (especially some of the restaurants) and take away wages, rent and tax there is no way they are going to survive much longer. Suddenly it all started to explain why so many shops were disappearing and why a number are now standing empty.
Now I partly blame the council. They set the business rate and it is as high as the rent in most cases which is a hell of a lot of money to have to make just for the priviledge of having your shop on the highstreet. I don't know why they set it so high as that doesn't even include rubbish collection, but surely it is pricing the shops out of the market? Take one small shop as an example, the rent is £800 per week, the rate is the £1000 per week roughly. That's a hell of a lot of sales to just to cover costs and that doesn't include bills or any wages yet. So it's no wonder the sandwich shop that was always busy has in fact gone out of business recently. You simply physically can't sell that many sandwiches.
Now many of the shops simply don't get enough trade to cover these costs. I've seen it with my own eyes, day after day, night after night they simply don't have enough custom to survive much longer.
A children's shoe shop just opened in one of the shops that had stood empty for some time. The owners are new to the business but clearly haven't researched their business very well because just under a year ago a children's shoe shop closed down over the other side of the road. If they had known that would they have necessary opened that shop there? Is it sensible focusing on just kiddies shoes? I think not.
Obviously the other downfall is the way the business is run. A bike shop opened a few months ago just round the corner from me and while it is probably cheaper for me to buy parts for my scooter online I am making an effort to use them. Two things they have done wrong so far. I went in for a drive belt and an oil filter. They didn't have the belt so I said I'd pop in later in the week which I did and they still hadn't got one. It's not a specialist part as it fits a number of other bikes. Third trip in they still didn't have one so they guy gave me the filter for goodwill. Now I know it probably only costs them 50p but every little counts and it's a part that sells for £5 so it's a good profit for little work for them. As I pass the shop every day I dropped in today to see if they had the belt and he sold it to me at cost. So not only have I cost him about 1/2 hour of his time, he has now done it for free. If that continues he is doomed. The forst time I went in there I mentioned that you can't see the shop as you ride or drive past. Something like a sandwich board or a protruding sign like the other shops had would make it visible from the road and almost certainly bring in passing trade. I only noticed the shop because I was opposite buying some takeaway, but the guys still haven't done anything about it.
So what's going to happen to my area? The shops are all doomed to close except the big established ones and no-one will be able to afford to fill their spaces? Charity shops? End of lease discount stores?
Discuss
I live just off quite an affluent high street and chat to a number of the owners of the shops and I was really surprised firstly by how high the rent was on those shops but also how high the business rate tax was. It kind of made me think and I did a few sums and a lot of the businesses simply don't work on paper. It's not just me that has done this as the guys I talk to have done the same thing. If you add up the sum of what they sell (especially some of the restaurants) and take away wages, rent and tax there is no way they are going to survive much longer. Suddenly it all started to explain why so many shops were disappearing and why a number are now standing empty.
Now I partly blame the council. They set the business rate and it is as high as the rent in most cases which is a hell of a lot of money to have to make just for the priviledge of having your shop on the highstreet. I don't know why they set it so high as that doesn't even include rubbish collection, but surely it is pricing the shops out of the market? Take one small shop as an example, the rent is £800 per week, the rate is the £1000 per week roughly. That's a hell of a lot of sales to just to cover costs and that doesn't include bills or any wages yet. So it's no wonder the sandwich shop that was always busy has in fact gone out of business recently. You simply physically can't sell that many sandwiches.
Now many of the shops simply don't get enough trade to cover these costs. I've seen it with my own eyes, day after day, night after night they simply don't have enough custom to survive much longer.
A children's shoe shop just opened in one of the shops that had stood empty for some time. The owners are new to the business but clearly haven't researched their business very well because just under a year ago a children's shoe shop closed down over the other side of the road. If they had known that would they have necessary opened that shop there? Is it sensible focusing on just kiddies shoes? I think not.
Obviously the other downfall is the way the business is run. A bike shop opened a few months ago just round the corner from me and while it is probably cheaper for me to buy parts for my scooter online I am making an effort to use them. Two things they have done wrong so far. I went in for a drive belt and an oil filter. They didn't have the belt so I said I'd pop in later in the week which I did and they still hadn't got one. It's not a specialist part as it fits a number of other bikes. Third trip in they still didn't have one so they guy gave me the filter for goodwill. Now I know it probably only costs them 50p but every little counts and it's a part that sells for £5 so it's a good profit for little work for them. As I pass the shop every day I dropped in today to see if they had the belt and he sold it to me at cost. So not only have I cost him about 1/2 hour of his time, he has now done it for free. If that continues he is doomed. The forst time I went in there I mentioned that you can't see the shop as you ride or drive past. Something like a sandwich board or a protruding sign like the other shops had would make it visible from the road and almost certainly bring in passing trade. I only noticed the shop because I was opposite buying some takeaway, but the guys still haven't done anything about it.
So what's going to happen to my area? The shops are all doomed to close except the big established ones and no-one will be able to afford to fill their spaces? Charity shops? End of lease discount stores?
Discuss
