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June 26, 2018
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Totally Workwear #2

CLIENT

Totally Workwear – Port Stephens provide a retail outlet servicing the growth area of Port Stephens, Newcastle and Lake Macquarie. A shopfront located at Salamander Bay services customers in the town square shopping precinct catering to a broad range of clientele: from trades to hospitality.

In addition, they provide custom service for B2B customers from Port Stephens to the lower Hunter and Lake Macquarie region. As a franchise store, Totally Work Wear – Port Stephens takes advantage of the brand recognition of a national chain, whilst focusing on a providing old-fashioned country style service.

INDUSTRY CATEGORY

Retail

EXECUTIVE SUMMARY

The owners purchased the store as a going concern in 2010, following a decision to move from country NSW. The had been operated by a husband and wife team for several years and the business was profitable when purchased. An earlier case study completed in August 2016 captures the first seven years of operation. Please refer to the earlier case study for background.

In April 2015, Graeme Fitzgerald of Business Success Partners Australia was engaged to help improve the profits, growth and value of the business. A strategic business plan was developed for the five years to June 2021. The emphasis in the first two years was on returning to profitability

With key changes made in the early stages of the plan, profitable growth occurred with an increased revenue of 20% in the first year of the strategic plan and a lift in the gross profit margin by over 2%. Consistent application of the principles of focusing on the target customer and providing tremendous service has allowed the continuation of the growth in the second year. Sales to the June 2017 showed growth of almost 15% and a further improvement in gross margin (approaching 2%).

The transformation of the business over the two years has provided the owners with the opportunity to recover from a dire financial situation and start to repair the balance sheet.

In early 2017, the owners secured the territory of Newcastle for Totally Work Wear. With the business ready for scaling an opportunity for a second store has been identified and at the time of writing is under negotiation to secure the final details of a promising location in one of the major retail centres in the region.

SOLUTION

The implementation of the Business Success Program with a structured approach to business improvement was the foundation. Based on what the owners wanted from their business, a five-year vision was developed. The business diagnostic provided a road-map in the early months of the programme, with the major focus on a few important areas:

  • Productivity of the team
  • Pricing – reducing the discounting
  • Cash – shifting slow and dead stock and securing deposits for ordered merchandise
  • Analysing accurate monthly financial reports

A number of focused sales strategies were implemented to reconnect with previous customers using SMS marketing methods and a programmed system for connecting with account customers dormant for more than six months.

With the confidence of 18 months of profitable operations, the owners have started to document the operations systems with a view to being prepared for additional stores. This process remains an ongoing one. The 2016-2017 financial year has seen further development within the business, both from a financial perspective and from a business leadership perspective.

The focus in the second 12 months has been on getting ready for scaling the business:

  • Changing from a partnership to a company structure
  • Engaging a new sales person with a target in the Port Stephens area
  • Implementing rhythms for meetings and communication to the team
  • Strengthening the balance sheet and developing the business case for a new store

OUTCOME

The major outcomes of the programme to date has been widespread and significant:

  • Reduction in debt to a level that will allow borrowing to fund the opening of a second store
  • Improvement in sales per labour hour >400%
  • Financial returns to the owners now stable and allowing continued debt reduction
  • Organised the team so that there is no longer a need for the school age daughter to go into the shop after school
  • Reduced stress as the family bills are now being paid

Turnover in Financial Year 2017 exceeded the target by 5% and achieved the goal of >$1m sales for the year (12 months ahead of the plan).

The business is now positioned to expand the service area and there is a solid foundation for a bright future.

Jason Manning
Jason Manning
Jason Manning is a cutting-edge Change Facilitator, Business Analyst, Leadership Coach and Business Growth Specialist. Jason is driven by the desire to see business owners earn what they want to earn, experience freedom in their business and create a lifestyle they have always wanted. The skills and knowledge he possesses allow Jason to provide business owners with the tools and the mindset they need to succeed. This is his legacy, what he contributes to the world. Individuals living to their true potential, integrated at all levels.

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