In this penultimate part of the series, we will consider the financial and administrative aspects of running a market, event or small shop. Please note any financial advice is observational, and it is good practice to consult an accredited accountant regarding the tax and legal implications of running a small enterprise. It is crucial to be sure of being on solid ground in the early stages of setting up your business. If it takes off and looks like becoming a profitable enterprise, early mistakes can be costly.
Payment is The First Requirement
Al will come to nought if you do not get paid for your sales! of course, you’ll say, ‘I know this!’ But do you understand what this means? The UK has the highest percentage of card payments in Europe. Over 40% of payment transactions are now made with cards. The ‘Touch and Go’ card has changed how customers buy, and those who do not offer the facility will lose sales. This trend is sure to increase, with trade research groups confirming by 2025, 80% of sales will be contactless! It is no use going through conspiracy theories or hoping the trend will slow, so the requirement is to accept the inevitable.
I cannot comment on point-of-sale payment collect hardware. I know Dojo and Square work at all of our venues. And our hardware is hooked up by hotspots through iPhones or iPads. The apps work every time without fail. The critical aspect is recent phones with the latest processors. The contactless hardware does not function well with apps downloaded on old phones or androids. It does not matter how good the internet connection is if you need the contactless unit to work well, it needs a compatible and up-to-date phone. Remember, it is worth considering you can claim a good percentage of phone costs and all hardware costs against tax.
There will always be people who’ll pay cash. Cash will never be eliminated, no matter what the fearmongers believe. So you’ll need to put together a float. Ten and five-pound notes and some coins. Do not expect your fellow traders to be bankers. It is embarrassing to hear someone say, ‘Sorry, I cannot help you with change’. Not having a float is unprofessional and sends out the wrong message to customers. Organisers can help ‘sometimes’, but few have the credit license needed to provide cash back.
Remember, I wrote about setting specific profit margins by considering a percentage margin for all goods. This allows you to see profits at all times if you keep a sales record. And there is a possibility of selling clearance lines to increase turnover and replenish buying power into better selling lines.
Write down every sale on a list and also have an accumulator total. And here is a hint, work out your weekend overheads and write the total at the top of your sales sheet. If ever you need an incentive to stay at your stall and sell, this is the one which works. Walking the floor will never help you make sales! Example:
315 – weekends overheads – the reminder!
Sale – Price – Accumulator
crystal – 3 – 3
Cd – 4 – 7
Oil – 4 – 11
crystal – 6 – 17
You can be sure nothing makes one stay at the stall and follow sales formulas better than this system. Keep to a formula to make the event work. And the sales list will help you work out correct profit margins and help you to see the best selling lines; and what needs to be cleared at cost if needed. Remember, poor selling lines end up being damaged and unsaleable. If something sticks, sell early and reinvest the money into good selling lines.
At the show’s end, take one-third or one quarter (depending on your profit margins) of the takings and save the money for restocking. It is essential to set these parameters right from the start of trading. Discipline here will repay in the long term.
Stock and Restock
If you haven’t got it, you cannot sell it! Stock is your only source of selling and making a profit. And keeping a record of sales and listing the product sold is essential to the venture’s long-term success. The people who survive and grow are the ones who pay attention to every detail of the venture. It is no use saying, ‘I’m only a weekend trader’ or ‘I’ll give it a go and see what happens.’ You have to be dedicated and follow the formula from word go. Thinking about the process, making plans and putting plans into action is the key to success.
Your profit is your wages. But the real success is ploughing profit back into the business right from the word go, even if this means supporting it with your mundane to Friday job. During the early months or years, the best wage is experience. The world is full of millionaires who followed their hearts, working two jobs and giving every spare hour to build their businesses. Anyone who makes this type of commitment can build a fantastic source of income.
Do not be fooled by the Amazon Society! There are still many people who love to meet their suppliers. Many one-to-one businesses thrive on being small and providing the best service. Preparing to see the available market and providing the customer with examples of trust and dedication is worth the effort. And one has to consider the different aspects of reward. Be confident once one understands that tremendous and profitable business begins with the rewards of satisfaction and achievement. Substantial profits will follow. Failure is inevitable if the desire is seeking a week’s wages in a weekend from the word go.
I remember a weekend trader who boasted of taking and making thousands of pounds every weekend. He is long gone and left a trail of debt. Those who listen to the boastful will fall victim to disillusionment. Be realistic, set up your stall with immense care and love, understand the financial commitment and seek realistic returns on investment, and you will build a sound and rewarding business.
Keep your turnover and profits to yourself and your accountant. Those seen as making significant profits will soon be subject to competition. And competition will undercut prices to survive. It is the law of the jungle. And remember, some people are dedicated to being the best of the best and be sure, the winners are not always those with the best stocks!
Next week we will consider sales techniques. Television psychologist Darren Stanton will talk (in a podcast recording) about the mindset of customers and the psychological importance of dialogue and presentation.