Finding Your Niche

When you first start thinking about your business, you would do well to really know the market you hope to cater to. You may find that the market you think is your market is not your market at all. At that point you will have to pivot and redirect your focus. When I started my current conventional distribution business, I had an all natural, great tasting bread from a local specialty baker. I figured that stores which sold specialty foods like delis, butcher shops and vegetable stores would be interested. Some were but it wasn't a stable market.

 My best customers at the beginning were seasonal roadside vegetable stands. This worked well in the Summer but all of them closed in the Winter. (This is Canada). The one health food store I delivered to became my most stable customer year round so I started to cater to that store. Not being a very healthy conscious individual back then, I had never frequented health food stores because only health nuts like my mother went there.

The fact there were very few health food stores in the area was another more practical problem. I created a so called local route out of a group of about 10 health food stores. Dealing with them over time became more comfortable and I was able to serve their needs better by expanding my product line to include organic and gluten free products.

It was only when I stretched my service area about 4 hours east of Cobourg and 4 hours west of Cobourg that my business really took off. Previously, I had thought these areas were too far but I soon became convinced that that's where my market was. I had tried to make something work on a local level but the market was too small.  As soon as I offered the same health food service service to a wider and better market, my business took off. I had finally found my niche but it had taken years to discover.

Colm Maher 1 905 372 9111

http://www.small-business.bz

Business with Low Overhead

If you've read the last 3 blogs about overhead, business stats and buying a business, you may decide that a small business is not for you. Too much work, too many responsibilities too many chances to lose money. You may be right but there is an overpowering entrepreneurial spirit in some of us that says "we'll do it anyway" because we want to control our own lives and be in charge of our own destiny. There is a way "to have your cake and eat it too" so to speak. This means that you can have your own business with all its leverage potential and you can have a business with minimal overhead.

Richard Kiyosaki, author of the "Rich Dad, Poor Dad" series of books and  Donald Trump have both recommended this type of business in the past. For deatails visit http://www.small-business.bz/Small-Business-Ideas.html. Having owned several businesses and also having  been self employed since 1976, I highly recommend this business model too.

Colm Maher 1 905 372 9111

Colm Maher 1 905 372 9111

Overhead Expense Surprises

There are many overhead items that you can count on: heat, electricity, wages, rent and the like but you unfortunately have to be also prepared for the unexpected. For example, my Bread Roots business  distributes bread so I need trucks. Many businesses need specialized equipment and, for Bread Roots, it's trucks. In the past, I have had a Ford E350 and Ford E450 as well as a Hino. After spending about $30,000 per year on maintenance and repairs on these vehicles, I looked around for  better trucks. I thought I had found it with the 2005 Dodge Sprinter cab chasis.

According to the ads, it was build as a work truck from the ground up. It was so supposed to be build to reduce truck costs to the small business owner.  I went for the cab chasis design to give me room for shelves inside the 14 ft box for boxes and trays of bread. I leased 3 of these vehicles for 4 years in 2005. After each of them had reached about 135,000 km (80,000 mi) all 3 needed a new transmission at a cost of about $12,000 for all 3. Good deal right? I'm joking. One of the reasons you get a new vehicle is to save on these kinds of costs. What I ended up with is high monthly payments on the leases and high repair bills- a double whammy.

I have just sold one of these trucks thank goodness. Unfortunately, another one is in for a second new transmission. This time it's $6000 through Mr Transmission. From Chrysler, the cost is $10,000. So all you happy customers out there with Sprinters that you love, be warned about unexpected overhead.

Colm Maher 1 905 372 9111

http://www.small-business.bz

Business Owner and Stats

Any business owner will tell you that you have to watch your gross sales and your overhead on a weekly basis or you will go under. A good accountant and accounting software will help but you have to ask them for the figures you need on a weekly/monthly basis. Some accountants like to keep information to themselves so don't expect them to offer up information unless you ask. What you are asking for is for them to do more work which they may want to avoid.

Accountants have their way of looking at my business and I have mine. For Bread Roots, I keep a weekly summary sheet which is posted on the office wall so everybody can see it. It tracks daily route sales, daily employee hours, daily mileage, daily gas purchases, cost per litre/gal, and total deposits by day. I also have one that tracks each individual store purchases by day of delivery. At the end of the week, I  total the gross sales, total deposits, total employees hours, total cost of fuel purchases and total miles driven. It gives me a good snapshot of what the business is doing on a daily and weekly basis. I now have over 2 years of weekly summary sheets so now I can use it to compare year to year. It's also easier to see long term trends. It may not be required under accounting practices but it helps me understand what's going on in the business . I think every business owner should track the stats that are important to them as well as ask their accountants for regular Profit and Loss statements on a monthy basis. 

Unless you have the data, you are flying blind and that's not a good feeling.

Colm Maher 1 905 372 9111

http://www.small-business.bz