TOP SECRETS FOR GROWING YOUR MINI-MART INTO MEGA SUPER-MART
When his uncle brought him to Lagos from his Mbaino village in May 1991, there was nothing to show that 18-year old Augustine Ike would be a wealthy man. His farming father had died in February that year. His mother had died seven years earlier.
A smart young man raised in a typical African setting, Ike knew that the responsibility of catering for his two younger brothers and a sister, being the first child of his late parents, rested on him. He was determined to succeed, but it would have been hard to do that in the village. So, his uncle's decision to bring him to Lagos came as a great relief.
His uncle was a petty trader, dealing majorly in cloths. He occasionally traded a few other personal effects. Ike was not only fast in learning the rules of the trade, but also always imagining other trading possibilities. According to him, the secondary school education, which he was fortunate to have acquired before he lost his father, gave him an advantage.
When, in 1998, his uncle 'settled' him, as that was the tradition, Ike got N42,000 to begin his own business. However, the then 25-year-old man dared to be different. He ventured into household articles business. He had observed that the business usually had faster turnover than his uncle's clothing business. But he later ventured into health products.
He says, 'In any business, the more one gets busy, because of having more customers to attend to, the more profit he makes, especially, within a range of businesses with similar traits.'
Today, Ike has a super-market in Okota and three provision/drug stores sited in the same locality on a street in Maryland, all in Lagos.
Narrating his success secrets, Ike says, 'A lot of people do not really understand this business very well before they go into it. They think it is a business they can just set up and put some people there and then go into something else. This is the major reason why there are many failed provision and drug stores in town. They soon park up a few year after they are opened.
'Again, you must employ someone you trust. If you have any reason to doubt your sales person's character, quickly terminate his or her employment, even if the person is related to you. There are chores to do at home.'
Proper book-keeping (accounting) is another secret for succeeding in provision selling, according to Ike. He agrees that it is time consuming, but 'proper accounting is indispensable for the business to succeed.'
He says, 'Accounting is not only for you to know how much profit or loss you are making. It will also help you to determine how much profit you want to make. For instance, if you buy a pack of Delta Soap containing six pieces for N480, it means that the cost price of one is N80. If you have good accounting system, you will know that you have to sell each piece for about N100 or N110 to be able to make profit.
'Another aspect of the accounting is that you have to do it every day, may be in the morning or in the night after closing, to determine the value of what you sold and how much profit or loss you have made. For me, there is no specific method the accounting system should take, but simple application of plus and minus. You should do it in such a way that at a glance, you should be able to tell what your store is worth at a particular day.'
When people want to start, there is a tendency to open their shop in busy places. But Ike says that only a novice will do that. He explains that the downtown location is usually the best, as one will have to pay high rental cost on a shop located in a busy area.
'Besides, siting your store downtown makes you closer to your real customers,' Ike adds.
For Mrs. Uloma Achebe, who owns a super-mart at Ajao Estate, selling a little less than what others are selling gives one an edge over competition.
Having also begun in a small store at Oshodi, selling mainly cosmetics soaps and creams, Achebe adds that regular availability of service and sort-after items is also required to continue to enjoy constant patronage.
'In Lagos, most people work throughout the week, except on Sunday. So, a lot of them do their shopping on Sunday. I understand this, so I make sure my store is open after the church service from 12pm to 1.00pm. Many people, who are into this business, do not open on Sunday. You have to be there all the time. Once your store is known to open at all times, it will always be the first choice of the neighbourhood.'
She also advises that, if possible with some goods, it pays to 'jump the chain.' According to her, it is also very important that the items are sold fast enough to beat expiry dates.
'One thing that I know that makes this business more difficult for some people is that they buy goods from the wrong source sometimes. Personally, I prefer to buy from producers if I can. So, that way, I jump the chain. The wholesaler's profit becomes mine first.
'There is usually a little profit attached to each good sold in the store. One must sell fast. If neighbours know your shop to be nothing, but a dumping ground for expired cosmetics or toothpastes, they will stop coming,' Achebe says.
She notes that while not necessarily giving rooms for credits, it is important that one appears friendly to the people in the neighbourhood.