I Ran My Own Supermarket and Here Is What I Learnt

Photo Credit

Yes it’s true, I ran my own supermarket for over 2 years when I was just 17 years old.

The question of “What did you do after high school?” or “Did you go to university?” always comes up in conversations when meeting new people. I don’t know if it happens to you to, but in my conversations it comes up frequently.

Here’s My Story

I finished high school a week after my 17th birthday. I finished a year ahead of all my friends due to the fact that in my second last year I moved to another school that allows students to complete the last two grades in one year. It was hard work but not too hard, and so I finished top of my class and a year ahead of all my friends.

I did not have a real idea of what I wanted to study if I were to go to university (I would probably have chosen some kind of engineering degree). My dad was an advocate of practical work in the real world as a teacher, instead of a university degree. He has worked hard his entire life and has been successful in a number of entrepreneurial endeavours. What happened next is that we spent a few months searching the papers and local business brokers for some sort of business that my dad could buy and where I (and later my sister) could work in, learn from and eventually earn our living out of.

There were a number of businesses that seemed interesting, ranging from gas stations to laminating & printing businesses to auto fitment centers. We got close to sealing the deal with a number of businesses, but there was always something at the last minute that didn’t check out. The result was that the asking price was not fair for the buyer in relationship to the profit that the business was making (meaning we would have to work too many years to pay the asking price back).

After a lot of searching and effort, we finally found something that sounded like a fun business to run: a supermarket. It was located in a busy area of town with a good clientelle, close to the beach and with a good name. Of course my dad did all the verifying of what was being offered and he recognized that there was a lot of potential in this supermarket. It had thousands of customers a day from a wealthy area (meaning they buy a lot of high profit, luxury items). What he also noticed is that there was massive potential to cut costs. The previous owners had made it easy for themselves by taking on lots of staff and expensive managers. Besides the staff, there were many other savings and changes that could be made to make the business a very profitable one.

A great business model is to get good sales, maximise profit and minimize expenses. Sometimes it is better to get rid of customers who bring little profit but many problems. Tim Ferris has also mentioned this in his book ‘The 4 Hour Work Week’. Say for instance that there is a group of people who bring in 5% of your profits but 80% of your problems (logistics or use of your staff’s time). It makes much more business sense to let that group go and miss out those 5% of sales and have 80% less problems.

10 Lessons You Can Apply To Your Own Business

1.) Cut Out The Middle Man

There is no such thing as a free lunch. That is why everyone adds a little extra for themselves to ensure they make a profit. The starting point is often the farmer (for the raw material) and the end point is the consumer. In between those two are the manufacturer and the retailer who each have to mark-up their products. Any more people inbetween the farmer and consumer just make it more expensive for the consumer and ensure smaller profits for the others involved.

It sounds complicated, but it really is as simple as dealing directly with the manufacturer as much as possible and cutting out the middle man. This can increase profit margins substantially.

2.) Staff

The bigger the business, the more staff you have. The more staff you have, the more problems you are likely to have. It really depends on your priorities and what you want from your business but I think that especially in the early years of a business it is essential that the owner works really hard in his own business. Keep the staff down to the essential number and doint just appoint expensive managers to run things for you that you could easily manage yourself. Wages and salaries are a big part of the expense list and are often higher than they could be in many businesses.

3.) Hands-On

We always took the ‘hands-on’ approach when it came to running our business. This is the harder and less pleasant way because it means that you (as the owner) are constantly present and work much longer hours than the rest of the staff. The benefit is that you are aware of any problems that surface and you are able to take care of them right away, so the chance of really big problems become much less. You do not allow the little problems to build up and become big problems. Another benefit of always being in your business is that you do not give people (staff/clients/suppliers) a chance to con you or rip you off.

As soon as there is an opportunity for people to steal or take advantage of you, sooner or later somebody will. This is sad but true, so it is better to prevent the circumstances that tempt people into taking advantage of you (ie no rules / enforcement of rules and no owner present).

4.) Systems & Organization

This is your strength if you have them and your weakness if you do not have them. Running an efficient business comes down to having systems and procedures in place. Every tool and piece of equipment should have a fixed place. Tools and equipment should be cleaned before the end of each working day and should be in proper working order (whatever is damaged needs to be repared or replaced).

Staff should have written shifts that there can be no confusion when someone is supposed to work. In the supermarket we had incredible hours (6 am until 10pm, 7 days a week). This meant we had up to 3 different shifts per day with almost 100 people working in the business. If there was no written schedule for the shifts, then there would be mass chaos and big problems for the business.

The staff of course is just one aspect. Every aspect of the business should have a system, from Goods Receiving, to the office, to the different departments, to the cash and deposits. If there is an efficient system with rules in place, then your business will thrive much better. Another benefit of having a system in place (with written rules or instructions) is that you are no longer dependent on a single person. If that person is sick, anybody can look at the written system or instructions and follow it.

5.) Invest in The Best Equipment

Investing in the best equipment is the same as delayed gratification. You have to work and wait longer before you pay the equipment back (the best equipment is often more expensive) but at the same time everything becomes easier and even more profitable.

Good equipment often saves time, creates a better product or service and it breaks down less. While cheaper or the wrong equipment may sound appealing to cut costs, eventually it ends up costing you more.

6.) Don’t Slack Off (at least not for too long)

Over time I believe that everyone slacks off a little. Some people are able to notice this about themselves and then correct themselves back to their fully focused selves. Others don’t notice that they are slacking off and they continue down this path of  slacking off until they eventually settle of a standard much lower than what they could or should be at. Be the first type of person and observe yourself. Once you notice that you are slacking off, pull yourself back together and focus with 100%.

7.) Give Incentives

People who work for a fixed salary often lose motivation after long periods of time (working the same job in the same place for 5 or 10 years). When people lose motivation, their interest for helping you drops and generally their quality of work drops too. One way to keep people motivated is by offering incentives. The harder they work or the more money they bring in for you, the more commission or benefits they will get for themselves.

We had a guy employed as our security guard, a very sharp and bright guy. Besides his basic salary, he would get an extra amount for every thief he caught stealing from our shop. Over the course of a year he caught over 120 people (including staff) that were trying to steal things from the shop. Since he was getting paid for everyone that he caught stealing, he was really focused and alert which may not have been the case if he was just employed for a basic salary.

8.) One Day At A Time

The whole ‘get rich overnight’ scheme never applies. This is especially true when starting your own business. You may see a successful growth rate right from the start but often it takes much longer. I think it takes around 2 years for any business to really get settled and be prettyorganised. After those two years it may still take many years to grow the company into a huge and successful one.

My advice is to take things one day at a time. Have a plan for the big picture, where you are going and where you want to end up. For the rest, just do the best you can every day and give it your full focus and effort. Over time you will reach your goals and be where you want to be.

9.) Always Be Open To New Ideas (Never be satisfied and stop wanting to improve)

There is almost always a better, faster, cheaper or more efficient way to do something. In a successful business, processes evolve over time. Don’t be satisfied with what is there until you are 100% sure that it can in no way be improved.

Have a look at how your competition is doing things. Is there anything that you can learn from them? Read about new technologies and processes that apply to your niche or business. Always be open to suggestions, new ideas and ways to improve your current setup.

10.) The Reward Comes At The End

This point ties in with taking things one day at a time. Delayed gratification. With any business, especially in the starting and early stages of the business (first few years) it is a good idea to use any profits to re-invest in the business. Buy better or more equipment, expand, get a better premises if needs be. This means that you will not have a fat cheque in your bank every month for the first few years. You are building up your business so that one day in the future, your profits will be huge and you will be able to sell your business for a substantial amount of money. (Of course the are no guarantees in life, but re-investing the profits into your business is a good strategy to build a big,successful and eventually very profitable business.)

Conclusion

There is no way I could possibly use this post to explain everything that I learnt and experienced in my time that I ran the supermarket but I have summed up the essential lessons that I think you can take home with you and apply to your own business (If you are not already doing these things).

I am very grateful to my father who gave me this experience and opportunity to learn from the real world in a real business. Without him it would not have been possible for me to run my own business at such a young age. I can honestly say that with all the lessons I learnt from running a supermarket that I would be able to run many other businesses (I’m not saying it will be easy or that it would even succeed). Of course I would not have the technical skills in various fields, but the principles of running a business still remain the same. As a boss/owner you have to manage everything and not necessarily do all the work yourself.

Due to problems with the lease contract we had to sell the supermarket after 2 years, just when it was starting to give good fruits from our labor. Not everything always goes according to plan , but I am happy for what I learned from the whole experience.

I hope that you enjoyed reading this post and possibly even got a golden nugget of wisdom from it!