Podcast Summary
Scaling back a business for work-life balance: Business growth isn't everything; prioritize family and work-life balance by scaling back, and consider cost-effective coaching resources like The Entrepreneur's University.
Running a successful business doesn't always mean you have to constantly scale it up. Chris Simpkins, a business owner with a contract catering firm and a sandwich shop, shared his experience of scaling back his business after reaching significant sales. He did this to prioritize time for his family and regain control over his work-life balance. The Entrepreneur's University, which offers coaching and resources for business growth, was mentioned as a cost-effective solution for those looking to grow their businesses. The podcast also touched on the ongoing furlough situation and encouraged listeners to stay updated on government announcements.
Understanding the Differences and Similarities of Contract Catering and Takeaway Sandwich Shops: Contract catering involves managing staff canteens or restaurants for companies, with reduced overheads but controlled pricing and regular client meetings. Takeaway sandwich shops target local workforces, with closely monitored food costs and a focus on customer attraction and retention.
Contract catering and running a takeaway sandwich shop are two different but interconnected business models in the food industry. Contract catering involves managing staff canteens or restaurants for companies with large workforces, often in factories or offices. The business model can be profitable due to reduced overheads, but comes with restrictions such as controlled pricing and regular meetings with clients. The staff and equipment are typically employed and owned by the caterer, with the company sometimes covering running costs or paying a management fee. On the other hand, a takeaway sandwich shop, like the one in Norwich, targets the local workforce and sells coffee, sandwiches, and pastries. The shop's location, with businesses like solicitors, estate agents, and accountants nearby, contributes to its success. The food costs can be closely monitored to maximize profits. Both businesses have their unique challenges and opportunities. Contract catering requires managing client relationships and adhering to their regulations, while a takeaway sandwich shop focuses on attracting and retaining customers in a competitive market. Understanding these differences and similarities can help entrepreneurs make informed decisions when considering starting a food business.
Starting a successful sandwich shop in the UK: A UK sandwich shop can earn £250k annually, with £80k potential profit, focusing on trends like vegan food, VAT exempt for most sandwiches, low staffing costs, and profit margins based on turnover.
A successful sandwich shop in the UK can bring in around £250,000 per year, with potential profits of up to £80,000, depending on costs and location. The business doesn't require formal training to start but comes with responsibilities such as environmental health checks and having necessary apps. The industry's landscape is always changing, and focusing on trends like vegan food can help attract customers. VAT is applicable to certain items like coffee and confectionery, but most takeaway sandwiches are VAT-exempt. Staffing costs can be kept low due to the nature of takeaway businesses, with staff working in shifts to cover busy periods. Profit margins can vary, and businesses often work with percentages of turnover as a key performance indicator. These numbers can change based on various factors, but they provide a general idea of the potential earnings in this sector.
Managing costs in a food business: Aim for a 25% profit margin, but consider the hours and effort put in by owners and unexpected costs. Focus on increasing sales and controlling costs to boost profits.
Running a successful food business involves carefully managing costs, particularly staff, food, and property overheads. The ideal profit margin for a small food business might be around 25%, but this can vary depending on the specific circumstances. For instance, larger businesses like Tesco can operate on lower profit margins due to their massive volume. However, for smaller businesses, it's essential to consider the hours and effort put in by the business owners, as they may not be earning a significant net profit despite high turnover. Additionally, unexpected costs like increased business rates can significantly impact profits. Aiming for a turnover of £250,000 in a food business could potentially result in a net profit of £40,000. The key is to focus on increasing sales and controlling costs to boost profits.
Growing a small sandwich shop business: To increase a small sandwich shop's turnover, focus on becoming the best in the area, improve branding, offer higher-quality products, and potentially introduce hot items.
Running a business, especially a small one like a sandwich shop, requires consistent effort, enthusiasm, and energy to reach desired goals. The speaker aims to increase the shop's turnover to around 170,000-180,000, but obstacles like rent increases and lack of a website have hindered progress. The shop, named Crocodile Coffee and Sandwich Bar, is located in a desirable area but could benefit from improved branding and higher-quality products. The shop currently sources bread from a local bakery and offers customers a choice between margarine and butter. To grow the business, the speaker plans to focus on becoming known as the best in the area and improving the shop's image. Although the speaker has taken a break during the pandemic, they are now ready to put in the work to expand the business and potentially offer hot products.
Branding, Sustainability, and Expansion for a Profitable Sandwich Shop: Invest in a strong brand identity, showcase local sourcing, and allocate resources to marketing to attract customers. Focus on sustainability and structure for successful expansion, aiming for £1,300,000 in annual revenue through systemized operations, excellent customer experience, and continuous improvement.
Effectively marketing and branding, sustainability, and expansion are crucial elements for growing a profitable sandwich shop business. The business owner expressed the importance of having a strong brand identity, showcasing local sourcing, and investing time and resources into marketing to attract customers. He also emphasized the need to focus on sustainability and structure to ensure successful expansion. The goal is to build a profitable business with one shop, turn it into an investment with a few shops, and eventually finance property purchases with ten or more shops. To achieve this, the shop should aim for a quarter of £1,300,000 worth of revenue within a year. This requires a strong commitment to systemizing operations, focusing on customer experience, and continuously improving the business.
Entrepreneurship vs Management: Balancing e and m for Business Success: Effective entrepreneurs invest in capable managers to focus on growth while they manage day-to-day operations. Successful businesses in the food industry prioritize customer needs, average customer value, average transactional value, and average lifetime value.
Building a successful business requires both entrepreneurship and management. Entrepreneurship involves growing the business, focusing on marketing and sales to attract customers. Management, on the other hand, involves running the business efficiently and effectively. To be an effective entrepreneur, it's crucial to invest in a capable manager who can handle day-to-day operations, allowing you to focus on growth. This balance of entrepreneurship and management, or e plus m equals s, is the key to business success. Additionally, focusing on customer needs and wants, as well as the average customer value, average transactional value, and average lifetime value, are essential elements of a successful business in the food industry. By understanding and implementing these principles, you can build a profitable and scalable business.
Strategies for Boosting Customer Value: Implement upselling, offer more variety, enhance signage, create package deals, boost customer loyalty, and provide additional services to increase average customer value, average transactional value, and average lifetime value.
Increasing the average customer value, average transactional value, and average lifetime value are effective strategies for businesses, especially during economic downturns. This can be achieved through upselling, offering more variety, improving signage, creating package deals, increasing customer loyalty, and providing additional services. For instance, branding freezers in a farm shop led to an 11% increase in sales. By making customers feel like members of the business, companies like American Express, Costco, and Starbucks have successfully increased their average transactional value. To implement these strategies, businesses should focus on creating an inviting environment, making it easy for customers to make purchases, and providing incentives for repeat business. Ultimately, these tactics can help businesses not only survive but thrive during challenging economic times.
Effective Marketing Strategies for Buffet Catering Businesses: Distribute leaflets, collect phone numbers for text message marketing, and build relationships with local businesses to attract customers for a buffet catering business at low cost. Unique uniforms, unusual marketing tactics, and high-quality products can also help differentiate and retain customers.
Effective marketing is crucial for a buffet catering business to attract customers. This can be achieved through various low-cost methods, such as distributing leaflets, collecting phone numbers for text message marketing, and participating in local awards. Leaflet distribution, for instance, can be done by team members during quiet periods and costs next to nothing. Text message marketing, on the other hand, allows businesses to reach a large audience for a small fee. Building relationships with local businesses, like butchers, can also lead to collaborations and new opportunities. Additionally, standing out from competitors by offering unique uniforms, unusual marketing tactics, and high-quality products can help attract and retain customers. In essence, a combination of these low-cost marketing strategies can significantly boost a buffet catering business's customer base and revenue.
Repurposing skills and resources creatively: Costa Rica's acquisition of salmon shops showcases the importance of leveraging existing skills and resources to grow a business in the food industry. Brand consistency, investing in technology, hiring the right management team, and launching despite imperfections are also key factors for success.
To grow a business, particularly in the food industry, it's essential to leverage existing skills and resources creatively. Costa Rica's example of acquiring salmon shops and repurposing their team's skills is an excellent illustration. Another crucial aspect is branding. Ensuring brand consistency, even in small details like sandwich wrappers, is vital. However, finding the right balance between local branding and online discoverability is essential. Additionally, investing in technology, such as building a Shopify website, can significantly improve the customer experience and expand reach. Hiring the right management team is also crucial, especially in industries where management skills may not be the primary focus. Consider asking industry experts, like Brakes reps, for recommendations on top performers to join your team. Lastly, don't let perfectionism hold you back – sometimes, it's better to launch and improve over time than never getting started.
Expanding a business with a competent manager: To grow a business, a strong management team is essential. Hiring a capable managing director frees up the owner to focus on expansion, while managing finances and negotiations effectively.
Growing a business requires a strong management team to handle the operational aspects, freeing up the business owner to focus on growth. The speaker shares his plan to expand their sandwich shop business by building 10 new shops and hiring a capable managing director. He emphasizes the importance of having a competent manager to oversee the business operations, particularly in managing finances and negotiations. The speaker also mentions the challenge of finding a full-time manager and the benefits of having one. They are currently in the process of acquiring an established business, including its assets, to mitigate the risk of paying rent to the current owners. The negotiation involves paying for the assets over time and potentially investing in the seller's other business. The ultimate goal is to have a strong management team in place to support the business's growth.
Maximize sales and cash flow with marketing tools: Use asset finance to free up cash, build a customer database with Shopify and text messaging, and invest in cost-effective marketing strategies like email to boost sales and profits.
Utilizing various marketing tools and strategies, such as asset finance, a business website, data collection, text messages, and email marketing, can significantly boost sales and cash flow for a business. Instead of tying up cash in assets, consider using asset finance and investing the freed-up funds into growing the business through marketing efforts. Building a strong customer database is essential, and tools like Shopify and text messaging can provide immediate and cost-effective results. While Facebook ads can be effective, they require more time and resources to master. By focusing on these cost-effective marketing methods, businesses can increase sales, engage with customers, and ultimately, increase profits.
Leveraging Outsourcing and Learning from Others: Outsourcing routine tasks can free up time for business growth, while learning from peers can lead to valuable insights. Prioritize tasks, delegate, and invest in growth.
Outsourcing routine tasks can free up time for entrepreneurs to focus on growing their businesses. James Sinclair shared his experience of getting rid of tasks like bookkeeping and coaching to dedicate more time to customer acquisition. He emphasized the importance of having conversations with other business owners and learning from them. The podcast he hosts serves as a form of leverage work, allowing him to reach a larger audience and potentially attract new clients to his Entrepreneurs University. The podcast also never disappears, providing long-term benefits. Ultimately, James encourages listeners to prioritize tasks, delegate when possible, and invest in their business's growth.
