Totally Workwear – Port Stephens provide a B2C retail outlet servicing the growth area of Port Stephens, located at Salamander Bay. This store services customers in the town square shopping precinct catering to a broad range of clientele: from tradies 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.
The owners purchased the store as a going concern in 2010, following a decision to move from country NSW. The business was profitable when purchased and had been operated by a husband and wife team for the previous several years.
Careers in banking and the meat industry meant that the new owners would learn on the job, but with enthusiasm and energy, they started with an optimistic view for success. The business is the sole source of income for the family of five, with two older children and a pre-school-age young daughter.
The acquisition of the store and relocation from Dubbo to Port Stephens resulted in debts including a business loan and a mortgage on the family home. A regular profitable return from the business was crucial to the financial stability of the home. After two reasonable years, the profitability of the business began to deteriorate.
Over the period from FY2010 to FY2015 the profitability of the store decreased by more than 80%, returns to the owners were virtually zero and they were relying on credit cards and equity in their home to survive. In late 2014, we were told that TWW needed help, but they needed to finish with their existing business coach.
In April 2015, a Business Diagnostic showed more than $120k of potential profit leakage and TAF was engaged to help improve the profits, growth and value of the business.
A strategic business plan was developed over the first 10 weeks. Concurrent with this, a series of quick wins were put in place to stabilise the business. The strategic plan focused on a five-year time horizon, with the key emphasis on returning profitability in the first one to two years.
The initial “quick wins” proved very effective, focusing on eliminating unnecessary labour and changing the pricing approach with customers. Almost immediately improvements followed, with YTD profit lifting from ~$10k at end April 2015 (after 10 months) to ~$38k by the end of June 2015 (12 months).
Further profitable growth has occurred with an increased revenue of 30% per month and profit improvement of 10x (or 1000%) from July 2015 to June 2016. Several monthly sales records have been achieved. A major consequence of this return to profitability has been the elimination of more than $100k of debt.
The business is now secured and stable, ready for scaling to build a valuable business that will deliver the needs of its owners
The implementation of the BSPA 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 identified a number of important areas requiring early attention including:
The major outcomes of the program to date has been widespread and significant:
The business is now positioned to expand the service area with the establishment of a new store planned. Turnover is targeted to exceed $1m in the next year with a solid foundation for the future.