Panic stage 0: will it work ?
So you got the bright idea . . . was unsure if it was the right thing . . . bounced the ideas off some people . . .
Sometime later heard the rumour that somebody else is in process of doing exactly what YOU were planning!
Panic stage 1: be first to open !
In contrast to your previously cautious approach, you now want to kick yourself for waiting so long! Suddenly money and common sense are not factors to be considered anymore.
You are spending money on shopfitting, advertisements, new stationery, car magnets, signboards, etc. There is a lot of excitement and joy in the air!
After going to bed at two o'clock, for the fourth night in a row . . . you open up the shop with a big bang. It is a week "late" for month-end, and your spouse almost divorced you in the process, but there is some sense of relief at last.
Because of curiosity - you attract quite a few "customers". They don't necessarily buy anything . . . but make promises to return later.
You have a warm feeling about being part of the local business community.
Panic stage 2: brands & stock levels
Since you are in a small town, you are desperate for business. You cannot afford NOT to help a client. The ultimate aim is to have everything for everyone.
You realise that there are a few prominent brands that you do not yet stock. You embark on a frustrating process of trying to register as a dealer with these important and prominent industry-leading suppliers.
You realise you have to get a website, your own email address, a company registration number, a VAT registration number, your own letterhead (with your own logo of course) and a checking account in the name of your company.
You lie about your turnover and expected sales, fill in all the forms and sign surety for your COD account.
After two weeks you get the good news that you are qualified to buy from them. It almost feels as if you graduated!
Then you learn about . . . minimum orders . . . and . . . committing pre-orders for the coming season.
You borrow some more money from the home mortgage Flexi account and artificially inflate your first order in order to save face. You derive an amount of comfort knowing that part of the stock is actually some stuff for yourself, and you got it AT COST . . . yippee!
With great excitement, you unpack the newly arrived stock and set about to display everything in the best possible manner (only to realise that your shopfitting is not only wrong but also inadequate.)
After a month of sales, you absolutely have no idea which stock was sold, stolen, or taken by yourself. You have kept track of sales every day and of the big expenses. You realise that an invoice book is not the best way of keeping track of debtors and that you don't remember all the small daily expenses after a week. Welcome to the expensive and confusing world of POS (Point of Sale) and Accounting Software!
Panic stage 3: Jack of all or master of one?
Vertical integration is the process of cutting out the middlemen. This means if you are selling ice cream, you consider milking your own cows and doing everything in-between. Horizontal integration is to include all similar and complementary products. If you are selling ice cream, you will include don Pedro's, frozen yoghurt, cold deserts, iced coffee, slush puppy, Italian kisses and fruit smoothies to your product offering.
After you have extended your product offerings to include every category imaginable of every type of merchandise remotely connected to your main line of business . . . you find that not only have you become a general dealer, but somehow, people are always looking for the sizes, colours or styles that you do NOT have in stock.
You soon realise that "ordering" does not work since the client wants it NOW . . . and this is beside the fact that the courier cost is more than the profit that you were going to make.
Panic stage 4: my spot is wrong !
Panic stage 2 normally kicks in after about 6 months.
You are still sitting with most of the original stock . . . plus . . .
You realise that the initial curiosity has weaned off and that business is not what it should have been. You realise that the credit card machine's flat fee of R 600 per month plus 5% of sales is not such a clever idea anymore.
You begin to search for answers and sooner or later you stumble upon the "locate, location, location" sermon - and jump to the conclusion that your spot is wrong.
You immediately try to secure a premises in the "buzz" area. The rent is almost double, the minimum term is 12 months, you have to sign surety, get new signboards, redo the shop fitting . . . and then . . . the strangest thing happens . . . excitement!
The mere prospect of having a new goal, a new project suddenly brought the hope and excitement of stage 1 back. Everybody is motivated, fired up, and ready.
Repeating itself, the whole process starts over again ... at STEP 1
