There are exceptional people out there who are capable of starting epidemics. All you have to do is find them.” – Malcolm Gladwell, The Tipping Point
There are many examples of the next big thing in Australian retailing, however, will they have their business ‘tipping point’?
Classically, there are inflection points in the growth of a retailer that we see often in their quest to become ‘fit’ retailers.
For example, a business may already have grown to a six store /online business of sales in the circa $8 million to $15 million, (one owner, possibly two, running around at a hundred miles an hour covering everything from buying to leadership to overseeing the accounts), and now they face the three great enablers of growth that many of these businesses need to realise to achieve their own tipping point.
On the basis that this business has a clearly differentiated position and customers growing their appetite for the offer, then:
- Is the business model replicable? Does the business have clear processes and system, with good business information systems, clear methodologies that a new employee (or owner) can quickly understand? Embedded procedures with good systems for measuring and monitoring business performance may sound reasonably small in the scheme of things, however, it is the framework that underpins growth, and replication of duties and roles within the business.
- Access to capital – the fundamental difference between funds from trading and funds to invest . In today’s environment, where technology is so dominant in the omni-channel experience, where store experience is more instrumental in the customer experience, and where product development and investment in tomorrow is every bit as important as trading today, having access to and planning for investment into the business model is an often unconsidered priority.
- All the adages about retail as a people business are true. Behind every great retail business you will find great people. Managers and staff that grow with the business are part of the DNA and become the generation of coaches and enablers for the next. To reach that tipping point requires talent, trust, and time. Talent in the team is the great differentiator.
Perhaps a very simple rule of thumb may well be that 10 per cent of every dollar in sales should be allocated to the three great enablers to ensure that the business tipping point becomes the platform for future growth.
Happy Fit retailing