So now you’re the proud owner of a retail space or an office space. Congratulations, you’re on your journey of running a business. I have to warn you though, that from now on you will always have fixed overheads. That means every morning when you open your doors, you’re working from a deficit.
It’s easy to forget this and only remember it closer to month-end when you get your first lease invoice. The ideal is to run your business as if you get that invoice every morning, and at the close of every day you see how far off you are from paying it.
The right environment
So how do you make your space work for you? I will focus on retail space as that’s where my experience lies, but keep in mind that many of the same principles would apply for an office space.
Kitting up a retail space is a mission. I would highly recommend investing in an interior designer. In the restaurant business, this is a necessity. A restaurant is arranged in distinct departments: Front of house and back of house. The back of house is the engine of the restaurant. It’s the kitchen.
When you design a restaurant the kitchen requires its own design and flow maps. Depending on what kind of restaurant it is, and the equipment you need, the kitchen may be the most expensive per square metre in set up costs. Also, your designer needs to spend a lot of time working out the flow of people and operations within the kitchen to ensure optimal efficiency. An office space would follow similar principles.
The front of house in a restaurant accommodates your guest services, including tables and seating, bar, outdoor, bathrooms and parking. More work in design happens here. You start with a mood board that talks to the tone, feel, and type of restaurant you’re going for. Is it a modern, rustic or themed restaurant. What genre: Italian, Japanese or African?
Again, the mood of your office space is also important for overall productivity, and what you want to project to clients entering your space.
A great experience
Spend time on the restaurant flow — how customers will use the space. If it’s an office, how will staff and clients use the space? I would also recommend doing an experience map, which speaks to all the senses the customer will experience before and after they enter your establishment.
- What do they see before and when they arrive at your establishment?
- Can they see your establishment from far?
- Can they park easily?
- When they enter the establishment, what do they smell?
- Does it smell like coffee or cooking oil?
- When they’re eating your food, do they enjoy it?
- Is there a theatre of food?
- Most importantly, what do they hear? Is the music congruent with the business and is it at the right volume?
Layering is another crucial area in retail. This is the pictures on the wall, table talkers, place mats, condiment holders and uniforms. Layering makes your establishment feel like a warm and comfortable space to be in.
Bathrooms are often overlooked, but trust me when I tell you that you get judged by your bathrooms. So layering should include bathrooms that use good quality toilet paper. A lot of the success of a space lies in the detail. This doesn’t need to be expensive. It just needs to be well thought out.
- Design is important and speaks to the look of the establishment
- Layering speaks to the feel of the establishment and focuses on all five senses.
- Design, layering, food, and service should give the consumer a great experience.
- You are judged by your bathrooms.
Selling The Dream
When you’re starting a business, the secret to success is getting everyone — from customers to suppliers — buying into your vision.
I started a company in 2016 offering road building in residential areas for local municipalities. I realised that there is too much risk involved and I do not have the capital to purchase machinery. The overheads are also too high. I feel more comfortable supplying municipalities with commodities. I have been in sales and have good people skills and sales experience. However, I’m struggling to get a foot in the door. Manufacturers are reluctant to give me a credit advance. As a result, I had to let go of many opportunities. How do I overcome this obstacle? — Martin
I can only speak from my own experience selling to municipalities. I did it once, successfully. This is how I did it:
- I convinced the municipality to roll out public WiFi in low-income communities.
- The municipality awarded me a contract.
- With that contract in hand I shopped around to find a company that I could sub-contract. That company had to take a risk that the municipality would pay me, and I would in turn pay him. I had to take the risk that the sub-contractor wouldn’t deliver the goods.
- I found a sub-contractor.
- We deployed the WiFi.
- The municipality paid its bills.
- There was never a hint of corruption.
In retrospect I realise I was the beneficiary of a succession of benevolent miracles.
Miracle No. 1: Meeting a political leader that shared my vision and was competent.
Miracle No. 2: Getting a legitimate contract out of a municipality.
Miracle No. 3: Finding a sub-contractor I could trust, and that trusted me.
Miracle No. 4: Successfully working with the municipality to fulfil the contract.
Miracle No. 5: Getting paid by the municipality.
Miracle No. 6: Avoiding corruption.
If you believe in miracles, keep going. If you’re slightly more risk-averse (or less desperate) than I was, then rather don’t target municipalities to build your business.
You’ll note that I solved the supplier credit problem by finding a sub-contractor that trusted me. That’s the only way to do it. Not only do you have to sell the dream to the customer, you must sell the dream to the supplier. I recommend reading Shoe Dog, the story of Phil Knight and Nike.
I want to start a business, but I don’t know how to approach my local bank or investors, probably because I don’t have any experience in the business field. I am currently in a full-time job and holding on to the security of the monthly salary (which I know is wrong) but I have responsibilities. How do I break out? — Lorenzo
First, the security of a monthly salary is under-rated. Don’t be so quick to wish it away! Of course, a salary is a long-term dead-end. When you’re forced to retire at 65, you’re likely to be staring at 35 years of supporting yourself and your family relying on pension and savings alone. Assuming they don’t retrench you before age 65.
Be grateful for a salary, but be on the look-out for a way to make a living on your own terms.
That way you will learn skills that can be used after forced-retirement age, and even more important, you will be able to keep yourself busy rather than spending your old age pottering around the house in boredom and driving your significant other mad.
Forget about banks and investors. If you want to start a business, you must do it without ‘other people’s money’. Find a problem in your industry, solve that problem, get paid for solving the problem. Repeat.
Ideally find a like-minded colleague that you trust, pool your efforts and partner to find a way to make a living in your own business. Partnership massively de-risks entrepreneurship.
Related: Pay Your Dues Before Raising Capital
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It’s easy to be an entrepreneur. It’s also easy to fail. What’s hard is being a successful entrepreneur. For an entrepreneur, there is only one important metric of success: Money. But life is not only about making money. It’s about being happy. This book is a collection of tips and wisdom that will help you make money without forgoing happiness.
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To download the free eBook or purchase a hard copy, go to www.13rules.co.za. To browse Alan’s other books, visit bigalmanack.com/books/