Ask Jo Malone: Don't be in too much of a rush to climb aboard the Crossrail gravy trainComments Off on Ask Jo Malone: Don't be in too much of a rush to climb aboard the Crossrail gravy train
Small business agony aunt Jo Malone discusses how the arrival of Crossrail will impact London retailers.
I run a small shop on Tottenham Court Road. All my neighbours are talking about the boost Crossrail will give us when it finally arrives. I’m thinking it might be worth expanding into another unit to double the size.
Is there any accurate way I can forecast to see whether this investment is worth it?
There will be so many businesses asking exactly the same question at the moment, and it’s one that requires careful consideration and caution.
The expectations and potential opportunities linked to Crossrail are huge. While it’s natural you want to seize the moment, don’t get swept away.
Instead, take your time to consider all of your options before you expand too quickly and risk any spare investment.
Hype aside, we don’t actually know what effect Crossrail will have. So if you are a small business, keep in mind that doubling the size of your shop won’t necessarily double your sales. Having had multiple stores of various shapes and sizes, I’ve learned that it’s better to have a smaller, profitable shop that is always busy than a larger space that is empty. With that in mind, expanding your current footprint should only be considered if you are bursting at the seams and are confident bigger premises will increase your sales substantially.
The rule of thumb is that your rent and rates should be 10% of your turnover. If those figures don’t work in favour of expansion, instead of looking to move, change your focus and work towards a growth strategy that gives you that option as and when you can afford it.
Have you considered supporting your business plan with increased PR and marketing? Do you have an e-commerce site? Are you a destination store within the area? Are you maximising all the available opportunities?
In addition, look at areas of London that have gone through huge retail regeneration, including King’s Cross and Stratford. Talk to businesses that are a similar size to yours and see if there are any recurring pieces of advice that you can benefit from.
Finally, don’t be afraid to play the long game to see exactly what effect Crossrail has once it’s unveiled. It sometimes pays to be patient.
When you feel the time is right to scale up, you’ll do it with confidence and conviction — and the leap of faith will be worth the wait.