Be your own boss. How good is a retail business?

[Husky]

Originally Posted by adbie

Hi Husky, I just realized a missing word in my previous post. I had wanted to ask you "Is it easy to copy your boss' business".

Have you assessed what you would need in order to replicate their success?

Incidentally, I have a close friend whose dad also owns a vitamin/supplement distribution. He also started by working for others and then set up his own business in his late forties. Their business is perhaps at a smaller scale compared to your boss. But they are already quite rich by my standards (if I'm as wealthy as them, I'd be very happy) - your boss must be even more wealthy!

Hmm... To answer your question I have to break down his business into individual units.

1) Retail

Easy to copy as I mention in another post, it's tough cos of limited bargaining power with suppliers compared to retail chains

2) Export

Impossible. Most of his clients are his long time friends. I don't have that kind of contacts

3) Distribution

Okay. It appears to me, the baby boomer market is very willing to spend on health supplements. I am on the lookout for healthcare products to bring in. Also looking into opening a small marketing company to distribute new products.

If you are curious, I think the company turnover is about 3mil a year. Not too bad.

[adbie]

Originally Posted by Husky

If you are curious, I think the company turnover is about 3mil a year. Not too bad.

As I suspected, my friend's dad is operating a smaller biz. He bragged about his 1mil turnover a couple of years ago. That's why I tell myself since small towkays like him can do so well, and even smaller towkays like my parents are doing not-too-bad too, what's stopping me from venturing out? (My mum did caution me that I have not seen enough failure cases...)

Curious again, does your boss worry about his staff leaving the company to set up a competing firm?

[Husky]

Originally Posted by adbie

As I suspected, my friend's dad is operating a smaller biz. He bragged about his 1mil turnover a couple of years ago. That's why I tell myself since small towkays like him can do so well, and even smaller towkays like my parents are doing not-too-bad too, what's stopping me from venturing out? (My mum did caution me that I have not seen enough failure cases...)

Your mum is right. While it's cool if you succeed, there's always a chance of failure. The opportunity cost for us is simply too high. I am 30 this year and getting $4k plus monthly. Not fantastic but really quite comfortable.

Originally Posted by adbie

Curious again, does your boss worry about his staff leaving the company to set up a competing firm?

Well. Maybe because when he left his former company, he poached away some of his ex boss's customers? He's also not too flexible in terms of his thinking. From what I can observe we are still operating on the same business model as when they started 25 years ago.

[adbie]

Originally Posted by Husky

He's also not too flexible in terms of his thinking. From what I can observe we are still operating on the same business model as when they started 25 years ago.

Yet they are still doing so well!

[Husky]

Originally Posted by adbie

Yet they are still doing so well!

Haha. It's from the massive contacts they built up over the years. Most of my retail and export customers are long time regulars.

[bjhchong]

Husky,

I sense here that it's the contacts & the loyalty of the contacts that defines the success of a business. Is that the key-point?

I recalled yesterday's paper about animator Sung Linggun saying about making cold-calls initially & not having to be able to "make it" just because they simply cannot establish some sort of contact...

Can we perhaps say that the key lesson here is: For the success of a business, contact is the key?

Perhaps understanding that, we now know where to focus our energy IF we were to embark on setting up a business.

[Husky]

Originally Posted by bjhchong

Husky,

I sense here that it's the contacts & the loyalty of the contacts that defines the success of a business. Is that the key-point?

I recalled yesterday's paper about animator Sung Linggun saying about making cold-calls initially & not having to be able to "make it" just because they simply cannot establish some sort of contact...

Can we perhaps say that the key lesson here is: For the success of a business, contact is the key?

Perhaps understanding that, we now know where to focus our energy IF we were to embark on setting up a business.

If you were to ask me what are the three most important factors in determining the success of a business. I would list (not in order of importance) them as:

1) Contacts

2) Knowledge of how the industry works

3) Courage and will to start the business and also to push on in times of difficulty

I think I am lacking sorely in 3

[davidtan]

You can also start with few contacts. If you can keep your costs lower than others - be more efficient, have a good strategy, exploit technology - then you have a competitive advantage. Next is to set attractive pricing and have good marketing. Be responsive, provide good customer service and start building up relationships.

With the above, even the most loyal customers may switch to do business with you.

[adbie]

Originally Posted by davidtan

You can also start with few contacts. If you can keep your costs lower than others - be more efficient, have a good strategy, exploit technology - then you have a competitive advantage. Next is to set attractive pricing and have good marketing. Be responsive, provide good customer service and start building up relationships.

With the above, even the most loyal customers may switch to do business with you.

I believe my friend's dad started with lots of contacts and deep knowledge. He's been in the industry for a long time before he started out.

[Hermit]

The retail business is alive and well.

But most Singaporeans do not how to do it.

If you are new or small, you cannot do general retail because the big boys will kill you in economies of scale.

So you have to be niched. No need to come up with a new range of products. You can sell what others sell. But sell it with better customer service (pre and post sale). Or do fun and crazy promotions.

So what is the key? Singapore is a very small place. The key is to generate some online buzz about you or your shop or the way you do business that is friendly or competitive.

Think 5 years ahead. What will Singapore be like? Lots more foreigners? Lots of FT with high salaries? What will they buy? How will they spend.

So just do some homework and start small.