How to avoid big mistakes for your small business with my alternative approach
![](https://i0.wp.com/retail-collaborative.com/wp-content/uploads/2023/06/Blog-Image-Template-3.png?resize=790%2C895&ssl=1)
Setting up and growing a retail business is all about trial and error; it’s a given that you’ll make some mistakes (and learn from them) along the way. Testing and trialling is one thing, but making irreversible or costly decisions is quite another.
Let me walk you through some of the big mistakes I’ve seen businesses make, and how you can avoid them with my alternative approach.
Overstocking
Yes, you can negotiate better cost prices if you place larger orders, but at what cost? Stock needs shipping, it needs storing, and neither are cheap, not to mention the cost to your business when you have to churn out the same items season after season to try and sell them at a discount. Customers can spot these tactics, and they will look elsewhere for newness if your business can’t provide it. In the current climate, they will also be put off by businesses who are producing too much excess.
Alternative approach
Buy small batches, and be intentional with where you put your buying spend. Make sure you research the market and survey your customer base before expanding in to new product areas, ensuring you have sufficient demand. As for the cost price, if you nurture better supplier relationships and plan ahead, you might still get a discount, but even if you don’t, when you have a quality range, your customers might be happy to spend that little extra if they know you are paying attention to detail and running your business in a sustainable way. You can even use this to your advantage in your marketing.
Growing too fast
Are you doing well in one market or product area and feeling tempted to go all in? Don’t. It’s easy to buy more stock and start adding shipping destinations to your website, but have you really considered the operational and logistical cost to your business? Do you know for sure that these new products will do well in new markets? Have you done all the research, and found the right partners to help you expand? Are your suppliers able to cope with the increase in orders without compromising on quality? These questions are just the tip of the iceberg. I always say to clients that it’s hard to wind operations back (just look at Nordstrom’s failed foray in to Canada).
Alternative approach
Instead, my advice is to go slow. Do your research, and expand slowly, in a measured way that considers all of the logistics and costs. Test the new products/ market if you can, dip your toe in the water with an Amazon store and pivot as required. Once you have the answers, you can expand if that feels right. Going too fast will break your business.
Outsourcing technology
I get it- it’s hard building a website and learning how to manage all the other tools you feel you should be using as a retail business owner in this climate. If you really don’t know how or where to start, it can be tempting to hand over control to third party and just focus on your strengths, but this is a huge mistake. Firstly, hiring a web developer is expensive, and whilst you get customisation, when you’re a small business you can get set up easily yourself for a fraction of the cost by buying a template and signing up to a hosting company. Websites need changing and updating all the time, and if you can’t make simple changes yourself, it will cost you time and money every time you even want to add a page or change the layout. Bigger changes will incur bigger costs, but you shouldn’t underestimate how much these small amendments can add up to, either.
Alternative approach
Use one of the ready-made website templates available and customise it. There are tutorials, so don’t worry about being able to make it work. Once you are set up, you can test and make changes, and by the time you outgrow this set up, you’ll have a fairly good idea of what you want, at which point you can hand a specification to a reputable web developer and let them take over the design and build. Even at this stage, I advise clients to maintain a level of control over their website and insist that they are able to make minor changes as required.
I hope you can see that my approach to helping small businesses is practical, phased and simple, but at the same time, takes complexities in to consideration. If you would like more help with your business, I’d love to help guide you to the right path for you. I can assist you with market research, logistics, operations and strategic planning. Please get in touch with your query and I will get back to you.