This article highlights 3 sadly common mistakes made by 3 businesses I’ve had dealings with in the last couple of weeks. Last week, MFI, essentially a bathroom and kitchen retailer, and Woolworths, a music/video/confectionery/clothes/toys/homeware/gardening/etc shop, have both gone into administration. I’ll share my perspectives on why I think they failed.

Additionally, I’ll share thoughts based on my dealings with a UK fudge company that was evasive about sending me their wholesale fudge price list.

Fudging the figures

Let’s start with the fudge company. I recently purchased a couple of great fudge domains, looking to consider selling fudge online. I did some research, and there appeared to be some fudge companies online that offered an affiliate programme, as well as companies offering wholesale fudge. I’ve always wanted to run a sweet shop, so I was looking for a wholesaler so that I could begin with very low start up costs.

Despite hearing back from one supplier, I was promptly told by the managing director of the fudge company that my idea was not profitable. My replies to her email were ignored, and 5 days later, I’ve not heard from her since.

The Lesson? Encourage and advise wholesalers. At the end of the day, they can be fantastic for growing your business. In the current economical climate most small businesses need all the extra custom that they can get. Even in a good financial situation it’s stupid to turn down extra business, particularly if it will cost you very little in extra effort.

MFI - great kitchens, never delivered

MFI has just gone into administration. They are a huge furniture supplier in the UK, particularly well known for stylish kitchens. However, they have a terrible track record for customer service. Products ordered from MFI have been known to take 6-8 weeks for delivery, in some cases, 12 months!

The Lesson? Customer service is key if you want to stay in business. Deliver what you promise, when you promise it. If you’re customers are not happy, they will tell all their friends. Losing potential customers you’ve never even met is a recipe for disaster.

Woolies - sells everything, makes nothing

Woolworths (affectionally known as woolies in the UK) has also gone into administration. Woolworths sells pretty much a bit of everything, as indicated by my intro “music/video/confectionery/clothes/toys/homeware/gardening/etc”. I think they went out of business because they have no clear business model.

There’s a popular saying us Brits have: “Jack of all trades, master of none”. Woolworths sell a lot of product lines but has steep prices. They don’t have any obvious expertise, and as a result, they’re not competitive. Most supermarkets these days have all kinds of products, and due to their size, they are considerably cheaper than Woolworths. So a lack of focus and high prices leads to going out of business.

The Lesson? Clearly identify what you bring to the market. How do you intend to make money? Why should people spend money on your products and services? What makes your company better than anyone else?

Conclusion

So the lessons for today are:

  • Encourage resellers of your products, don’t snub them.
  • Customer service, make sure you’re delivering on your promises.
  • Ensure the message is clear about what you offer customers.