This post is inspired by a conversation I had last week with a retail entrepreneur. He took up the challenge I posted here. Being a retail entrepreneur is pretty lonely, hence this post.
There are two kinds of problems that (retail) business owners face:
- Maintenance problems
- Inflection problems
Solving the problem requires knowing what type of problem you are facing.
Maintenance problems are those you face simply running a business. Things require attention, things require attention: Find staff. Evaluate a new supplier. Trimming your stock. Upgrading the technology.
These are the problems a mature retail outfit grapples with.
All it takes is experience and a bit of energy. They are not hard to solve.
Inflection problems, however, are different.
Every business goes through the stages of the lifecycle. (Introduction, Growth, Maturity, Decline.)
At each of these stages, a business will face different types of problems as you move the though the inflection point (from stage to stage.)
Knowing the types of problem you will face at each stage is advantageous because It allows you to prepare and anticipate, and most importantly you won’t feel alone, knowing other businesses are facing the same issues.
As an example, consider the following typical issues a (growing) retail business goes through:
- Transition to Growth: Capital
- Transition to Maturity: Systems
- Jump the Curve: Market Opportunities
The maintenance problems and inflection problems may of course occur simultaneously except in those businesses facing long-term maturity, with no immediate threat of decline (e.g. supermarkets). Most business will be dealing with (for instance) growth pains as well as the maintenance/operational problems.
I am not in a position to assist with capital-sourcing issues. But I can provide some pointers for retail businesses who transition to maturity. Typically this is where a retail ‘chain’ reaches 5 or 6 stores and turnover north of $5m. It becomes difficult for the founder to get across everything in all stores all the time.
More about this set of problems – and what to DO about them next time…