A couple of months ago I was asked to ‘dust off’ the consultancy skills and ‘take a look’ at a Animal Welfare Charity Shop here in Southern Spain.
Their problem? The all too familiar one that after an encouraging and enthusiastic start they now found they had too much stock that nobody wanted, not enough customers, too many animals requiring help, and not enough people actually willing to do anything tangible to help.
Now ‘back in the day’ every business we looked at used to start of telling me that they ‘were different’, that there ‘market was unique’, etc etc.
My view has and always will be the same: there are enough fundamentals of running a successful business to make them all pretty much the same, and that when we used to look at investment plans there were three components: does the plan make financial sense (of course it does, who in their right mind would submit a business plan that showed it was going to fail), is there a market or can one be created (again of course there was, who in their right mind would try and sell ice to the Eskimos – or as they are called these days Inuit), and finally were the people who were going to run the business the right people, did they fill you with confidence that they would ‘make a difference’, adopt to circumstances as required, be flexible and mature enough to adopt their business plan as needs be.
This last point in general was the first point to start: too many businesses are run by people who are fixated on their ‘original idea’ and have not been prepared to change. They don’t listen to their staff, their customers, their friends (although the later is hard as they have probably surrounded themselves with ‘Yes people’. Everyone deserves a chance, but what was their track record of running a business and if their first time who was going to be their mentor, their adviser, the person to steer them along the right path.
Back to the charity shop.
Shops are pretty much the same: they are a fixed entity, they need stock that people want to buy, and they need enough customers wanting to buy their stock. Two key variables then: quality stock, replenished regularly and enough passing trade trade (regular and new) to keep the cash tills ringing.
Let’s look at the three components in more detail.
The Shop: great fun setting it up, everybody wants to be your friend (especially those that think there might be something in it for them longer term), never a shortage of people willing to help out …. until it starts to get quiet, until the inevitable rota problems set in, until people start turning up with animals off the street (you did factor that in right, that as soon as you open a charity shop you can guarantee two things: people will turn up with stray animals and people will start dumping stray animals in your area as you will – whether you intended to or not – quickly establish a reputation as the place that ‘sort out stray animals’. )
The Stock: in general (and meaning no offense) a charity shop is going to be selling stuff that people don’t want (or need) anymore. No doubt at all you will get some great stuff in the early days and people will snap it up. But what when the supply dries up? When the ‘hand me downs’ can’t be handed down anymore. How big is your supply chain i.e. how many people living near you are going to be bringing stuff in. How many new people will be moving into the area and realizing they have brought too much stuff with them. How many people will be moving back home (although you probably don’t want their stuff as the good stuff will be going with them or sold, and you will be a convenient and better option than the local tip for the rest of their junk).
The Market: everyone loves a bargain, no doubt about it, but there is a limit to how much stuff people need, how much they they can afford, and how many times they will come in to look at the same old stock. I wouldn’t bank on the busy tourists either, they are on holiday and unlikely to be looking for a cocktail dress, a sideboard, a sofa. Books yes, but not a lot else. Reality is that you are going to be stuck with the residents that live around you, and remember while you want their money and support they want you to sort out any issues they have with stray animals.
So what about the charity shop that I was asked to look at?
They pretty much ticked all the above boxes: they were (will explain later) located in a well established, busy part of Southern Spain with a lot of good sized conurbations within a 20km radius i.e. they used to get a good number of people driving to their area and coming across them on their days out.
They had had a good three or so years, but this year in particular they were struggling and considering closing.
Looking at the business it seemed to me that:
– they had pretty sold everything they were likely to sell to the people that lived locally.
– there was no ‘fresh blood’ as people were just not moving into the area in significant enough numbers.
– nobody was really driving out anymore, partly because of the cost of fuel etc, but mainly because they thought there wouldn’t be anything worth buying.
– local bars and businesses had cut back on supporting their fund raisers partly because the bars wanted new ideas, a fresh approach as they had exactly the same issues in terms of ‘same old same old’ in terms of giving their customers something new, but mainly because the charity just wasn’t able to help enough of the stray animals (which had increased in number as people were drawn to the shop as a way of helping – see above).
I should say at this point that they were not alone. Personal experience rang a bell and time spent online showed that a large number of charity shops were saying that if things didn’t improve they would have to close, or were considering closing.
My advice fell into two options.
Option 1: remain open but on fewer days, use fewer people, as if you only going to be selling the same stuff to the same people did it matter to them if you were open 7 days a week, or 2 mornings a week? Or find another business to share with you: a cafe maybe, a sandwich bar for example. Something that would contribute to the fixed costs and give people a reason to attend. An Internet cafe would be a good option to consider, as useful to residents, day trippers and tourists so more footfall and a better chance they would buy something from you.
Option 2: close and go mobile. Remove the fixed costs and use the money to fund a schedule of visiting car boots. Take the same stock to different locations. If one car boot sale works well, keep going. If not cut and run and find one that does. Learn to Buy and Sell: replenish your stock in one location and sell it in another, providing people with variety.
They chose Option 2 because all things considered it gave them a fresh start: a chance to cull the volunteers and concentrate on people that would really help (they had come to the conclusion that they were primarily giving the volunteers something to do other than sit in bars and cafes all day), and it had the benefit of removing them as a focal point for everybody’s stray animals issues.
I had a chance to see them a couple of weeks ago. They are delighted. Making more money, spending less money, helping more animals, getting out and about, having little challenges as to who can ‘make the most’ buying and selling.
Not for everyone as takes a certain type of person to be a good ‘Del Boy’, but maybe worth considering.