Woolworths, MFI and a lesson for your business

27/11/2008 by info.

So Woolworths and MFI have called in the receivers, who are basically accountants who will run the business until they decide what is best for the creditors. It is similar to Chapter 11 in the US.

The media are reporting these events and suggesting the firstly these names will disappear from the high street and further that the reason for the administrators being called in is due to the recession.

Firstly, the names may not necessarily disappear, it depends on what the administrators decide is the best option, and they are taking to potential buyers at the moment if reports are to be believed.

Secondly, the reason why these businesses have failed is due to inadequate management who did not ensure that the business had a particular niche of placement in the market. So when times were not so good they were the first to fail.

Why would someone shop in Woolworths to buy a DVD? Amazon and HMV provide a much better option and there is now the option of downloads which Woolworths have totally ignored. And why do the shops close at 5.30 when this is exactly the time that other workers in the town shop and office workers are ready to buy that last minute item? What percentage then drive to Tesco to buy that last minute gift when Woolworths could have been more convenient if it were open?

The knock on effect is when potential buyers were looking at Woolworths as an investment they could not find a reason to buy. What were Woolworths good at?

The same applies to to the sale of small businesses. Why would someone buy your business? What is your businesses Unique Selling Proposition?

Have you entered a competition to be pronounced the “Best Fish and Chip shop” in the region. No doubt these award winning businesses if they are now are placed on the market will be easily sold. However there are probably better Fish and Chip shops in the area whose owners simply did not bother. So if these “better” Fish and Chip shops are marketed, buyers will not necessarily know the quality of the business that is being offered.

So regardless of whether you want to sell or simply increase your turnover awards are one of the ways of distinguishing you from the rest of the businesses in your area, as is creating a niche for your business.

It will help you increase your profits and it will help the sale of your business.

A question I always ask my clients is why would someone want to buy your business? Most of them cannot give a single reason, don’t let that be true of your business.

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