Ask any business owner about business planning and I would suggest that almost all of them will think of a document (a business plan that includes sales targets, costs, turnover, projected growth etc) that was requested when they approached someone for a loan or grant or they were told they needed when they started their business. It’s something that probably every accountant will tell you that you have to have so that you know if the business is doing as well as planned.
However, there is another form of business planning that you night not have thought of (and may not even be applicable if you don’t carry stock – but please bear with me as although it may not be immediately apparent it may trigger some thoughts about how this article applies to your business).
My partner runs a craft shop in Llanrwst our local town (called The Crafty Kitten but that’s immaterial to the article unless you want to take a look at it at some point – I know she would be more than happy to talk to you about the products that she makes and sells). Way back in February we went to a trade show in Birmingham and while there spotted some books about rubber band jewellery and some small rubber bands called “loopies” or “loomies”. I looked at them and said to her “these are something different” to which she replied “ah… I’ve seen these mentioned a lot in some of the craft groups I belong to on Facebook – they are a big thing in the USA at the moment”. My reaction was “that’s nice but I can’t see them taking off here”.
We wandered on around the show for a while and then she asked if we could go back and look at the loopies again so we headed back to the stand selling the books and she decided to order some for the shop. We then went to the stand that was selling the bands themselves and she spent some time talking to a member of staff that was running the stand. Turning to me she said that she was going to order some and asked how many I thought she should go for. I rolled my eyes a little and told her that if it were me I wouldn’t go too mad, a few minutes later an order had been placed for about 36,000 of these little rubber bands and several kits that included the bands and a “loom” used to make friendship bands and other things !
If you have children, or grandchildren you probably know by now that these things have turned into the latest fad here in the UK – needless to say we are now kicking ourselves that she didn’t order a lot more than she did as she is now having to source more from anywhere in the UK (there is no point in trying overseas as the stock would take too long to get here) along with probably every other toy and craft shop in the UK.
There are two main lessons to this story, the first is that you really need to talk to someone that has some knowledge in the field you are asking about – I failed miserably in understanding the possible market for these items but would have fared much better if I’d been asked about Internet Marketing, SEO or even something related to IT. The second is that with the right business stock planning you can make sure that your business gains extra sales by having sought for items in stock at the start of a busy period and for as long as possible during it. Of course there is the danger of getting it wrong and having too much stock but with a bit of care and another bit of luck this won’t happen to you.