There’s no getting away from it, September was a truly challenging month thanks to severe cash flow issues – yet almost unbelievably it ended up profitable.
by Antony Begley
There have been many times over the last four and half years when I’ve wondered about the wisdom of buying a shop – but never more intensely than during September. After an outstanding summer we somehow contrived to get ourselves fairly rapidly into some reasonably severe cash flow problems at the store by the beginning of the month.
The reasons behind that are many and varied but basically come down to over-staffing, over-spending, quite a few substantial unexpected bills the month before and one of those months when revenue for no obvious reason suddenly goes through the floor. The perfect storm.
Surprisingly poor months have happened before of course but the euphoria of such an uplifting summer clearly led us to take an overly optimistic approach to the autumn months – and we’ve paid a heavy price for it.
We’re severely trying the patience of our main wholesaler, JW Filshill, as well as some of our smaller suppliers but to be fair to them all, they’ve been very understanding of our plight and we can only thank them for that.
Most bizarrely of all, however, the store returned a net profit for September. A modest one of a couple of grand, but a profit nonetheless. When the management accounts landed on my desk I automatically assumed that my Accounts Manager who prepared them was either trying to cheer me up or had enjoyed a liquid lunch.
Turns out the sharp decrease in buying throughout the month ended up in us making a profit from the shop’s worst month on record – and there, my industry chums, is yet another of those valuable lessons that running a store keeps teaching me.
Lesson learned?
Getting ourselves out of this problem is not going to be a quick fix but, looking for an upside as I always do, September taught us some very important lessons about the value of constantly monitoring all spending – be that on staffing or on stock – and how important it is to stay on top of those on a daily basis.
The shop is slowly getting back to normal stocking levels but we’ve imposed a ‘hand to mouth’ policy on our Manager Kerry to ensure that she too learns the value of hyper-efficient buying and staffing.
Yes, that means we’re having to prioritise our buying and out of stocks are higher than they’ve been for years, but my Board’s belief is that the store has to trade its way out of this position, the same way it traded itself into it.
Frustratingly we have so many ideas that we are keen to implement in the nearish future –not least a full refit of the store – but those ideas are going to have to wait until we can finance them comfortably.
The proposed refit is a strategy that’s been bubbling away for a little while because we believe that, for us to make maximum use of every square foot of space in the store, it’s more than tinkering we need.
We’re toying the idea of introducing a dedicated vapeshop within the store with dedicated, fully trained staff; we’re looking at moving the hot food section to a much larger dedicated area at the back of the store; and we’re also in very early discussions about the possibility of adding a Post Office counter. All of these ideas would help drive footfall, sales and profits but would obviously require some major surgery in the store.
In a lot of sense however, it’s increasingly clear that we can’t simply trundle along as we’ve been doing and hope to have a successful business. As costs continue to rocket, sales haven’t rocketed alongside them – so we need to rethink the whole store. It’s a bold strategy we can’t afford to implement right now, but that doesn’t stop us dreaming. And we are edging ever closer to making those dreams come true.
Reality bites
In the meantime however, we have the not insignificant challenge of simply getting the store back on track and doing the basics well again.
We’ve been trying to put the quiet month to good use by investing in some training for our staff. Kerry and I recently re-did our full licensing training from scratch and the entire team of 11 is currently completing an online food hygiene course as we aim to build a better qualified, more knowledgeable and better trained team than we’ve ever had.
We’ve also been investing in the store, laying a brand-new floor behind the counter and along the length of the hot food area, as well as a lot of general tidy-up work to fix a lot of small problems around the store like damaged roof tiles, fridges that need re-gassed, worktops that need re-sealed and so on.
All small stuff but important in our drive to improve standards right across the store and encourage the staff to hold themselves to higher standards too.
The short-term aim is to get the store back in gear in time to fully capitalise on Christmas. How we do that is one of those challenges we’re embracing on a day-to-day basis but we remain optimistic and we remain committed to making use of every hard lesson we’ve learned in our Adventure in Retail.
Silver cloud
One unlikely piece of news that we received recently helped to boost our flagging spirits following the hell that was November. Falkirk Council is apparently intending to allow housing to be built on the huge area at the front of the store that was one part of the old Royal Infirmary hospital but which, for the last five or six years, has been a lovely but pretty much pointless and rarely used area of landscaped garden.
The plans don’t kick off until 2020 and it would probably be at least a year or two until tenants were in buildings, but news like that is always welcome.
I reckon we were due a break – and if that’s as good as it gets, I think I’ll just be grateful for small mercies.