Close the shop and make profits.
June 4, 2014
Knowing when to cut your business loses .. with retail shops, online shops, consultancy, products and services is crucial.
One of my clients has a shop. They’ve had it for 20 years and it contributes a small and dwindling proportion of their overall profits. Must of their profits come from servicing their clients on the clients’ property. These contracts are very lucrative.
Most of my client’s time is spent working in their shop; either serving customers, waiting for customers to walk through the door or discounting old stock. The business isn’t doing well and is being pulled down by the shop.
My client understands this. The problem is they are emotionally attached to the shop.
Each time I raise the shop issue I’m told it is where all their contract enquiries come from .. (but we’ve disproved this by looking at the enquiry stats) … or I’m told that that the shop is a safety net in case they don’t get any contracts.
We’ve ploughed through the figures and my client understands that just two more contracts a years will replace the shop income. Currently they get 25+ contracts a year so they know it is possible to achieve two more contracts if they dedicate the time wasted in th eshop to looking for more clients. The problem is they are emotionally attached to the shop. It was their dream and they can’t let go.
My client is an intelligent person. But their emotions are clouding their judgement.
I’m not being judgemental about them as I’ve also made decisions based purely on emotions. We all do. It is bad practice but we still do it.
As well as an emotional issue this is also about time management.
The secret of success is knowing when an emotional judgement is destroying your business and when you need to let your head rule your heart.
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