Entrepreneurs need to get the finger out, not point it

It’s easy — and understandable — to blame others when external factors hit our businesses. But we must take control to survive

IN a previous career, more than 25 years ago, I was a retailer with a number of stores in Dublin. One of them was located in a Dublin shopping centre that was struggling in the mid-1980s. Even though it had a strong anchor tenant, footfall into the centre was poor in the early years. There were about 15 other stores in the centre owned by independents just like me. Although I was only 24-years-old when I opened it, I had more retail experience than most of the others. That doesn’t say a lot for how the landlord selected its tenants.

As with most centres, we each paid rent and a service charge in proportion to the size of our units. By market standards, both charges were high relatively speaking.

One of the other retailers suggested that we all come together to badger the landlord for a rent reduction. In my naivety I went along with this battle, which took hours and hours of meetings. After months of mediation meetings, legal shenanigans, rows and threats, we got a reduction of about 25pc on the rent.

At the time, my rent accounted for about 20pc of net sales. So that reduction of 25pc allowed for a 5pc drop in my gross sales target. I think anyone reading this would say that is a positive result. And it was.

But, in hindsight, I wonder if we had all spent the same amount of time working together and focused our energies on marketing ideas to drive footfall, might we have increased our sales by more than 5pc? I personally would prefer an increase in full-margin sales of 5pc, which means getting more customers, clearing more stock, paying employees, etc.

The rent reduction was, of course, an appropriate correction — but that battle was all-consuming. It was a very negative distraction for too long a time. Each one of us signed a lease, with our numbers crunched in advance, knowing full well what we were getting in to. Why was fighting with the landlord our only answer? WHO IS ACCOUNTABLE? In recent days I’ve listened to radio interviews, read articles and attended conferences where the challenges of business are the central theme. There will always be ups and downs in industry, such as Brexit, recessions, currency crises, increases in rent rates and insurance, minimum wage legislation, digital disruption, Vat changes, mass exodus from rural areas, and so on.

Real entrepreneurs know this before they start a new venture. But far too often when the tide turns the wrong way, we blame others: “The Government need to do this, the council needs to do that.” Perhaps some of that is true. But in our capitalist system where free trade is encouraged and SMEs are respected for being the backbone of our economy, handouts or government intervention is not the only answer. I have clients in Lebanon, the Philippines and the Middle East. Many of them envy the support mechanisms that we have.

In most cases, each one of us business owners is accountable for our own success or failure. I do understand that when the tide turns, there can be external factors that cause problems.

It’s natural, tempting and sometimes easier to blame, as our pride and our dignity is at stake. Government does have to act in certain cases, but that often takes time. In the meantime, we need to get on with it — because the buck stops here. All of this I say with the greatest of respect to those who hit difficult times. My point is more about taking control and being accountable for taking proactive action when the chips are down. WHEN THE CHIPS ARE DOWN, TAKE CONTROL If and when you experience a prolonged negative turn in your business, take time to reflect on your own business first.

Seek market intelligence from suppliers, competitors, peers and customers if possible. Get as wide an understanding of the macro issues as you can. What are the causes? Is it short or long term?

Bring your team together and, in a positive upbeat tone, seek their input and opinions. Debate the macro issues and their impact on your business.

With your team and using these categories as prompts: people, product, place, marketing, internal controls… conduct a SWOT analysis. This is a list of internal strengths and weaknesses and external opportunities and threats. Be really honest regarding the internal weaknesses.

Develop an action plan to take corrective action. THE LAST WORD The stress and the pressure of missing targets can be enormous and frightening. It can take you over and cause you to lose control. But the case study below of MoveHome shows that innovation and clever thinking can make any business stand out from the crowd.