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Your Practice as a Shop Front?

22nd Dec 2012
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When a successful franchisor has shop fronts as part of its business model, there has to be something in this. Is this an area that is well worth exploring? As some readers may know I have sought views on this subject before on Any Answers. I feel the blog gives me the opportunity to explore issues more deeply.

I ask myself we are now living in a world where more and more purchasing decisions are based on clicks on a screen - is bricks and mortar the way to go? If not, why does a leading franchisor have this as part of their business strategy? Furthermore it must be lucrative for their franchisees to go through the bricks and mortar route?

Is the shop front concept worth stealing? Can the shop front be one of the major barrier to entry? A USP?

So what holds me back in having a shop front? Here are some of the reasons:

- Fear of failure - there is a risk in everything we do. Here the risks are high. I need weigh up the risks and decide.

- Lack of experience and knowledge - I have never done this before. How do I go about doing this? Here I need franchisor type support

- legalities - lease or buy? How will I know I am not being screwed?

- Banks - will I get a loan?

- organising of shop front- layout, IT, staffing, etc

- Day to day running of shop front

Most importantly where do I start?

If we look at leading business people, what got them to the top was their thinking to take calculated major risks. I am not even willing (so far) to take a risk on a shop front!

Are you shop front person? How did you overcome real and imagined obstacles?


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Replies (8)

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By ShirleyM
22nd Dec 2012 09:48

A cross between office & shop

Our original serviced office was not very visible, and difficult to find,

Our current office was retail originally, but it hasn't the traditional large shop window. It is on a main road, with signage on three sides, and is visible from a long way away.

We get a lot of enquiries from people who have seen the signage. A few just call in, but most of the 'cold' enquiries see our signs and then look us up on the internet, and then telephone for an appointment.

While there is a large one-off initial expense for the signage it does bring in a worthwhile amount of new clients.

We took a 5 year lease initially, but we had a break clause. We spent a lot of money refurbishing our premises but we now have a tailor made layout. There were more suitable premises available, but we went for location over the convenience of acquiring a fitted out office.

It is more expensive to run than our original serviced office, but it is much larger, more welcoming and more convenient for clients and staff.

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By petersaxton
22nd Dec 2012 10:00

Home or office

I prefer to work from home because of the flexibility and low cost. I have a sign outside my house on a busy road so potential clients know I am here. If I were going to take on staff I would use extra rooms in my house. If I wanted to work away from my house I would prefer a shop front for the adverting potential and ease of access rather than an office. There are a lot of extra costs associated with a shop front which are not incurred when working from home. I think a shop front works better with lower fee clients rather than higher fee clients. You would need to consider a better marketing approach as well. Presently you have the worst of all world with a serviced office down a side street with no exposure to passers by.

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By wilcoskip
22nd Dec 2012 10:00

Has to be part of overall strategy

Start first with the question: what sort of clients do you want?  Have you worked out what your ideal client looks like?

You then build your marketing plan around reaching that type of client.  You can be specific (to a degree) by using marketing lists.  I hate networking as much as you do, so concentrate instead of building a referral strategy targeted on the ideal clients that you already have.

When I worked for a firm that had a shop-front, it was still the case that all the decent new clients came through the direct mailing and other marketing.  Anyone we had just walk through the door, in 9 out of 10 cases (and it didn't really happen all that often anyway) was a waste of time.  I appreciate that this is only one example, though, and ShirleyM has had much more success with that.

Over your Christmas break, can I suggest that you read John Haylock's 'Absolute Certainty' - available as a Kindle download on Amazon.  I found it enjoyable, informative and motivational.  The question you're currently asking is one of the areas it covers.


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22nd Dec 2012 12:35

Question of lease or buy ...

Location .. location etc. - once you have determined this

A lease is pretty straight forward and all you really need to keep an eye on is £ sq.ft, which any commercial agent in the location will be able to confirm and terms of lease i.e. FRI (full repairing), any rent/delapidations deposit; term of lease - in SE part of the world this is getting shorter by the year & whilst 10 yr used to be the norm many are now 5 yr or less and the other aspect is 'break clauses' at 2/3 year intervals; although you could try for a 1 yr rolling lease.

Be aware of upward only rent reviews which are arguably a thing of the past, but that is individual interpretation; also assuming you are a sole trader you are on the hook personally - so maybe look at renting as Ltd co

As for buying - all commercial property is potentially yield based which results in an underlying value (rent/yield%=value); however, nowadays with change in empty rates, no tenant renders a property potentially worthless and a drain on resources.

Nevertheless, if you anticipate continuing for a number of years at the same premises or becoming a landlord yourself & letting out then the amount of rent paid over the period would probably cover the greater part of a mortgage

Also don't forget that SIPP's etc allow you to invest in commercial property so for an owner-occupier this may be a good way forward (borrowing is 50% of SIPP value). Benefits are that you (the business) are paying rent 'to yourself' and will own the property in due course; as well other advantages accruing to pension fund status

Just a few thoughts

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By girlofwight
22nd Dec 2012 12:35

Bit of both
I've always thought a combination of routes to market would be desirable if business growth was the requirement; a physical shop front for retail clients, a office elsewhere fr back office/ professional clients, and a good web site for the online stuff. Maybe even with differential branding, between the retail side and professional side,

If I was starting over, I'ld consider a multi strategy.

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By FirstTab
23rd Dec 2012 08:18

Very helpful
Thank you so much for the response all. I found it very helpful.

WS thanks, good recommendation. I just bought the book. I will read it over the holiday period. It should not take long.

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By uejorj
23rd Dec 2012 21:45

Shop front costs
As a sole trader working from home or an office, if you choose to go out for whatever reason you can simply lock up and go.All calls can be sent to voicemail/answering service or diverted to mobile.
If you have a shop front you need to factor in the cost of having staff to man the shop all day Mon- Fri as of course there is no benefit in having a shop if it is closed during the working day because you have gone out.

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By James Hellyer
24th Dec 2012 13:07

What sort of clients?

The shop front model undoubtedly works, otherwise the franchises like Tax Assist would not build it into their business model. The point, however, is that it works for their business. Are you trying to attract the same type of client that Tax Assist does? I'd suggest that the majority of the clients who walk in off the street may not be the sort you want.

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