Last month, my wife and her business partner took the plunge and decided to further develop their ‘work from home’ business and open up their first shop. To put it into context, they have both spent the past 3-4 years creating a local pet service, including dog walking, pet sitting and dog training and decided that the natural next move was to open up a pet shop. Active Paws Ltd
Having been in commercial banking for a number of years I was cautious from the outset on opening a shop in an industry now dominated by super stores like Pets at Home and the online industry…I mean how do you compete on price with these entities who have millions of pounds to throw at advertising, special offers and buying in bulk?
In a way they were fortunate in that their shop is located 30 miles away from the nearest superstore and thus had the opportunity to capture a selective market. Unlike the rest of the economy, people are still spending sizeable amounts of money on their pets and if you can create the right service you have a clear opportunity to have your small piece of the pie. Because the pet services part of the business was already up and running, it meant that there was a small client base established to start from which allowed them to create a business plan and cash flows with realistic numbers.
So point number 1: Evaluate the market place and establish whether you as a small business can compete and what your audience might look like.
We live in a rural area, with a number of smaller towns and villages dotted around hence we could not expect to have the footfall that a larger city might generate. This meant that letting people know about the shop was going to be a number one priority. Traditional methods of engagement, such as http://www.Yell.com, flyers and mail shots is not enough in today’s environment. In just about any industry, you must be willing to adopt social media as a platform to raise awareness. A good website, Google adwords, Twitter and Facebook pages are simple yet cost effective way to get the word out. Owners who bring their dogs into the shop have their picture taken and posted on facebook, everyone likes a good looking pooch! The business has also identified that trade shows, local events and dog competitions are a great means to market. The partners run their own flyball team, agility classes have created their own line of hand made toys and accessories which allows customers to personalise what they want; for example tug toys, which can be made in specific colours and sizes to suite the owners taste and size/breed of dog.
Point 2: Be innovative and willing to explore alternative avenues to reach and engage with customers and find out what works best with the audience you are targeting.
Be responsive and respectful to your clients. As a small business you cannot expect to offer everything to your clients at all times. Stock was a major consideration for the business, with so many pet foods, treats, toys and accessories in the market it was hard to decide what to have. We set an initial budget and ensured that we had a range of suppliers that could cater for all eventualities. Part of the offering the shop has is a home delivery service, making use of the fact that the business has dog walkers around the area on a daily basis. They have also made a point of explaining to customers that although they may not have in stock what people are after, they can order it in within a week or offer an alternative. Being reactive to clients needs is a value add and something that a large corporate business struggles with…you can’t go into a major superstore and ask them to order in a specific item for you. Customers expect more from from any organisation they have dealings with now and loyalty and goodwill are key drivers in creating a successful business.
Point 3: Don’t over commit and try and be the be all and end all to your customers. Manage expectations, but be responsive to the demand in the market and listen to what your customers have to say.
Last but not least, don’t be afraid to try new ideas or drop ones that don’t work out. Part of the strength of a start-up in that you can be adaptive, focus on areas that are successful and change things far quicker than an established larger company. As mentioned above, stock was a major issue and after a month of trading the business found that certain items were not selling as well as others, or that a competitor price was undercutting what they had. Be aware of the competition and regularly evaluate your services or products and be willing to separate the good from the bad. At the same time, if you offer more than one service, you may find that some products sell better than others or that they have a better profit margin. In the dog food market, prices are highly competitive and margins are low, but as a fundamental item to sell in a petshop, you have to accept that stocking a certain item is a must have to gain footfall.
Point 4: Be adaptive and review your strategy on a regular basis. You can’t afford to sit back and see what happens, be tough on yourself and accept that at some point something that seemed liked a great idea in the first place may actually be an un-necessary distraction to the business or drain on resources.