Some advice please

[CharTalbot]

Hello,

This is my first post in this forum. My son showed me this forum in hopes of me getting some good advice.

I was desperate to start a business. I needed something for my daughter and myself.I didn't do enough homework though and jumped into it rather quickly. A costume jewellery shop was available and the lady said if I didn't make a decision within a day they would give it to their uncle. I bought the business for R250,000. That included the fittings,stock and goodwill with rent of R15,000pm. However, a month after I bought it the centre ran into problems.The escalators by my shop stopped working...for 18 months, shops around me closed down and the movie house and restaurant.I was left with a 2 year contract to fulfill. The investors decided to renovate and those started in Nov 2007. It is now September and I have battled to carry myself financially.

Things have picked up a bit...but not much.I have really tried to have good stock in the shop, renovated and have 820 on my data base.I send sms's every month and have offered free gifts when they come into my shop. I feel so desperate as Im just not getting the feet into the shop. Now my landlord has told me I need to sign another lease for 3 years.I have tried everything in my power to make this business succeed, but Im losing money every month. The contract states that should the landlord do renovations there is no action we can take against them.However, it is because of the renovations I'v almost lost my business. Should I let my lease run out, it is required of me to sell all my fittings, take up the floor and paint the shop.I will in essence lose everything? should I cut my losses?

Is there anybody who has had something like this happen to them who could give me some advice?

[Dave A]

Ouch!

What are the prospects of the business changing direction for the better?
Is there any solid reason there will be a turnaround?

EDIT: The biggest threat normally is your mental state. Being under pressure for a while, it's all too easy to drop into a survivalist mode. Something is going to have to happen to change direction. The good news is you can make those decisions - it's not out of your hands.

It's really just figuring out the right decision.

[Pap_sak]

It’s very hard to advise a person unless you have all the facts and figures in front of you – but maybe I can help a bit. I have a sports shop that I started with 250K and will be putting in a further 100K – so business size they seem about the same. I started last year a round March and even from the start it didn’t make money – it did not lose money either. It just hung in there till December 2007 – then suddenly started doubling turnover all this year. Same stock, no advertising – weird. But when it wasn’t going that well I would ask myself the following questions.

I think you should look at your business as a person sizing it up to buy it.

What are your overheads? Staff, banking, rates, elec, rent, advertising – can these be trimmed down? Are your advertising rands well spent – can you identify customers that are in the shop from advertising? Do you have a website? Have you thought of also selling on bid or buy? What about flea markets – extra sales with not much outlay? Is the shop’s location really worth R15 000? Is it worth thinking about stocking some products that are similar but have a wider appeal? Step back from the shop – then look objectively – what is the customer seeing? Are there some cheap improvements that could be made – maybe better window displays/ lighting? Is the shop just losing money – or is it losing a lot?

For instance I am saving a couple of hundred rand every month by banking my cash at the ATM in my personal account then transferring to my business account. If I move my speed point to Capitec from FNB I’ll also save a few hundred. Just looking at my banking means I don’t have to make an extra thousand or 2 in sales.

Hope this helps a little…