After running her Thai restaurant in Johannesburg for the past seven years, a Filipino restaurant co-owner has decided to close down the restaurant. The main reason, and we are seeing it a lot these days, is that at the end of her lease the landlord has informed that it will increase.
But there is another reason. After working seven years in a partnership owned Thai restaurant and another seven years in a restaurant with her husband, the co-owner says she has seen time fly by. Her daughter is already in Grade 8 and she has lost many years not spending enough time with her.
Now she and her husband have begun scouting for a new location for a Thai restaurant but they want to come up with a new strategy and different approach. Instead of opening another Thai restaurant the plan to open a Thai takeaway restaurant with a limited number of tables. This format will give them the opportunity to close relatively early and enjoy more family time.
This is how entrepreneurs approach not only changing economic circumstances but also phases in their lives. Rather than pack up and go back to the Philippines where the co-owner restauranteer says there will be five Thai restaurants on one street, she plans to take what she’s learnt over the past 14 years and transfer her experience into a new format that is more suitable for their lifestyle. She is also looking for a location in one of the smaller shopping centres were the business will be able to achieve a better profit margin.
In this economy more often than not people who don’t run their own businesses such as the academics, reporters on a small business story, and glossy small business magazines paint a false picture of what it takes to run a small business. The glamorised story is about overnight success and big potential to franchise. But forming and operating a small business tests all your abilities. It can be hard, gruelling work. Long hours. Changing circumstances mean that if you don’t think like this restaurant co-owner, you can quickly go to the wall.
Many small businesses can coast along comfortably when the business and customer environment is stable. But when things change because of new technology, changing demographics and legislation or unanticipated competition from giant chains, then small businesses need to be innovative. They need to come up with new ideas. They need to find a market and hold onto their market by offering a strong and clear value proposition. They also need to communicate their value proposition clearly to the market.
Perhaps the biggest competitive threat for a lot of small retail shops and restaurants is landlords who are jacking up rentals despite knowing that small business are struggling in this economy. Many small retail shops and restaurants just can’t make the rentals anymore and as soon as their lease comes up they shut their doors. The opportunity in this challenge is that these small entrepreneurs may well lead the way by coming up with more innovative formats away from the mammoth shopping centres. As shops and restaurants flee the high-cost shopping centres, the advantage for customers may well be having small businesses located closer to suburbs with better quality food and products as well as reduced fuel bills.
Is your business ready for the challenge? Are you armed with the skills, knowledge and a plan or strategy to launch or relaunch in this economy. If you want to equip yourself to better weather the economic storm, isn’t it about time you kept up-to-date with practical, no-nonsense information on how to innovate in this economy? You know what to do next — add your email to our subscriber list for information you won’t find anywhere else.