Running a small retail business is not an easy feat. So much competition, people spending less, high rents, high costs in general - the list of challenges is endless.
Running a small retail business the right and smart way is very important and can make or break it (and you).
In this post I am going to share my 5 main learnings from being a member of the board and the marketing director for the Manly Food Co-Op.
The Manly Food Co-Op is an organic bulk grocery store in Manly on Sydney's Northern Beaches. It has a strong zero waste philosophy and has been around since 1997. As a non-distributing co-operative it is owned and run by its members and all profits go back into the business to benefit the community. The Co-Op is open to everyone though, no need to be a member to shop all the organic goodness there (but members enjoy benefits like a special discount).
In 2017 the Co-Op almost closed its doors after having served the Northern Beaches community for over 20 years due to financial issues. I was part of a team of very dedicated volunteers who saved the Co-Op by crowd-funding over $52,000 within a mere 10 days (this is a whole other story to tell). After the successful crowd funding campaign I joined the board and became their (very hands-on) marketing director, a role which I loved.
Despite the different business model, the Co-Op is still a business and needs to be run as one. We turned the Co-Op around and it is now profitable and set up for many, many more years. :)
So my learnings are applicable to any small retail business out there.
What are my 5 learnings of running a Small Retail Business?
Learning No. 1: You Need Passion
A retail business, especially one that is financially struggling means long hours, sleepless nights and constant worries. In order to live through this, you need to be really passionate about what you do and why you do it.
I live a zero waste lifestyle, eat healthily and love a great local community, so the passion was there in the first place and that was what kept me going through the hard times (and there were plenty).
When you are too passionate though and make this business your life, you run the risk of putting in way too many hours and suffer from burn-out. Make sure to be firm on your limits and communicate these clearly to the wider team if you have one. Don't wait too long for getting help in if it becomes too much and don't refrain from relying on your friends and family if needed.
Learning No. 2: Build the Right Team Around You
You can't run a retail store (especially groceries with hundreds of individual products) yourself unless you want to work 24/7 (and even that might not be enough).
You also won't have all the necessary expertise across all areas. Do you know payroll, accounting, tax, human resources, marketing, ordering, waste management, storage, automation, check out, customer service, event management, team leadership, cleaning, ... to the T? Very likely not, so specialists are key for your success.
The Co-Op was lucky, especially in 2019, as we had a group of strong board members from diverse backgrounds, with different skills, passions and clearly defined areas of responsibility.
As a cooperative we benefit from having volunteers who offer their time for a small discount and for becoming part of a local community. Often these volunteers have amazing specialist skills that will be put to good use.
I know most businesses don't have access to volunteers or free labour, but you usually have staff. Your team is absolutely essential in ensuring smooth running of your business and ensure stability and great customer service.
Very importantly, especially when dealing with volunteers, but also with your own staff when your team is small, ensure that everyone pulls their weight. Clear communication and responsibilities are key here and you always need a contingency plan if things don't go the way they should, for example with someone calling in sick on a big day.
So what can you do if you neither have volunteers nor staff to help you right now?
You could offer internships or work experience, collaborate with other local businesses and / or your local chamber of commerce to barter and share your skills. Sometimes you might need specialized help just for a little while, so why not consider a contractor or a virtual assistant?
Learning No. 3: Location, Location, Location
When you are selling physical goods (or running a food business), the location is absolute key.
Your branding might be fantastic and different, you are pulling all the right levers when it comes to marketing, you might have a huge following on social media, ... BUT, if it's too hard to find you, get parking close by or even if you are just a little out of the way, customers will not come. And you will be missing out on all the amazing foot traffic that brings you that extra cash that you need to survive and grow. Just think about tourists visiting or people who have just recently moved to your suburb. If they can't see you, you don't exist in their minds.
The Co-Op was in a central location before, but slightly away from the main pedestrian strip in a side street that only locals frequented. A visitor or even most long-time residents wouldn't venture there.
At the end of 2018, we made the decision to move the Co-Op to a central location in the heart of Manly, right next to a Coles supermarket with plenty of parking underneath, opposite a local school and just one street back from the Corso, the main thoroughfare in Manly. Once we had moved there, our revenue figures doubled within no time, our membership base did the same and long-term Manly residents came in to say that they hadn't even known we existed until our move! And that after trading for over 20 years! We were stunned!
Location is absolutely key, but you will need to do your research and run your numbers. Central means expensive and moving means disruption and extra cost. Know your numbers and plan well.
Learning No. 4: The Importance of Building Loyalty
A membership model like the Co-Op model gives you a big advantage once you have acquired members (and managed to get through all the legislation - OMG ...). You are building a great contact list. As people need to subscribe in order to become a member, you get their data. And that is a fantastic thing (just make sure you use it wisely and keep it safe).
You can now send them a regular newsletter which helps you build community. You can give them information about things they care about. In our case these are healthy recipes, zero waste ideas, new products, getting to know our growers, volunteers, staff and members, sustainability issues, news, events, ... Give them extra value and they will come back and shop with you.
Collect your customers' data if you have a way of doing so. A reason why everyone is open to giving us their email address and phone number is because we are community owned and not part of a big chain of stores. We are local and they are getting a discount when shopping as a member.
Another reason why shoppers are willing to share their contact details is that we don't print receipts because of our zero waste philosophy, so if the shopper wants to receive their receipt, we email it. You'd be surprised how open people are to giving out their contact details if you just ask.
Learning No. 5: Simplify and Automate Your Processes as much as you can
Running a retail / grocery store is super time consuming. There are so many little and big tasks that need doing on a daily basis. You want to ensure you have the best possible processes in place, so these tasks are easy and quick to do (and at least as important your team knows how to use them!).
Have a good Point of Sale (POS) system like Vend that can connect with your accounting software (like Xero). Make sure to automate the ordering process as much as possible (this is dependent on your suppliers' capabilities, but your POS is often set up really well to at least alert you when you start to run out of certain products), so use these.
Price tags can be an absolute pain if set up manually. Hand written tags look great, but grocery prices change a lot throughout the year (just think fresh fruit and veg depending on the season), often by day or week. Every change would need to be adjusted manually which is not a good use of your time and leaves a lot more room for error. Use bar code scanners where you can or at least short product codes to make the checkout process easier for your customers. If you sell mostly un-packaged products in bulk though like us, then that's no option.
Wow, I just realized that I've kept writing and writing and still haven't said a tenth of what there is to say about retail best practice. Looks like I will need to delve deeper into each of these points which I will do over the next few weeks.
So stay tuned for more info on why you need passion, the right team, the right location, loyalty and simplified and automated processes for a successful retail store.
Leave your comments below. I'd love to hear what you think and what your biggest learnings are. :)
Written by Yvonne Pflieger
I am passionate about zero waste living and making our planet a better one. As the marketing director and a board member of the Manly Food Co-Op, I learned a lot about small retail business and how to run a financially and environmentally sustainable operation. I am now set out to inspire and enable conscious organizations and individuals to drive positive change for a better planet. If you need help with marketing, digital advertising or business operations, then please get in touch. I am looking forward to connecting and learning more about you and your challenges and opportunities.