Outlook for the new financial year (2013-14)

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Outlook for the new financial year (2013-14)

Post by Not your average framer »

Well the Chancellors budget is only a couple of weeks away and it does not sound like there gonna be much in it for anyone. I just wondered how everyone is feeling about the year ahead and how this may be influencing their thinking and plans for 2013-14.

Personally I don't think that the year ahead is gonna be an easy one, but I have decided to be as pro-active as possible by adding some compatible additional income creating items and activities to the business in order to be ahead of whatever may be happening.

New this year, will be a much larger range of ready made frames and ready cut mounts than we have ever had and dedicated display shelving especially for this purpose. We have made a good start to this with some of our new ready made frames on display all ready, but the mounts are yet to come.

Already sales of ready made frames have been growing and this has been encouraging. The mounts will be the next priority and I hope to have a good range of those on display for the end of this month. I don't have any particularly good feelings about the year ahead, but I think if I am waiting for the economy to improve, it will be a long wait, so I'm going for it anyway!

What's everyone else thinking and doing for the year ahead?
Mark Lacey

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Re: Outlook for the new financial year (2013-14)

Post by GeoSpectrum »

Being fairly new to the business I expect continued slow growth for me, those with a little money to spend are slowly finding me and the cheapskates come once and I rarely, if ever, see them again so I guess that is a reasonable situation. Growth will be limited by my availability but I won't be in a hurry to give up the mortgage paying work I do elsewhere though. I'm not that optomistic. I think people are adjusting to 'the new normal' but there is still a lot of caution about, including me.
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

We are substantially up on last year so far by just over 5k despite me missing 3 weeks of work though various reasons, we are concentrating on bespoke work and have introduced some higher value lines, are pushing the better glass and mount detail.

Picture framers have a limited customer base, make the most of each customer.

Mark you commented on another thread you are 50% down on February last year, what has changed, I see you banging on about how your ready mades are doing well, is each ready made you sell a lost bespoke sale? Have you lost the chance to convert that customer to a bespoke service? Will that customer ever have a bespoke frame now that you have sold them a cheap alternative?

We have many competitors around us and lots of shops that sell ready mades, just as we have several fast food shops and several good restaurants, the restaurants don't sell kebab and chips out of a paper bag.

I will not sell Kebab and chips either.
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Re: Outlook for the new financial year (2013-14)

Post by Not your average framer »

What's changed is this, we've had a reasonable amount of framing orders, but customers are taking longer to collect their orders. Suddenly, now it's March people are wanting to collect their orders, so I guess they must have been short of the cash to get them earlier.

We used to a whole shop window full of ready made frames a few years ago and they used to sell on a regular basis. My experience always was that it was different customers who bought ready made frames to those who came it for bespoke framing.

Other shops are already selling ready made frames, so I might as well have my slice of that market as well. I have looked carefully over the years at other shops selling ready made frames and concluded that these shops sell many of these frames to those who buy them on impulse.

Such impulse sales not only cannot compete with normal bespoke framing work, but to exclude ready made frames will also exclude me from gaining these impulse sales. Offering good impulse oriented sales items makes good business sense to me, (particularly during the tourist season), but I'll do it with my own twist, as I like to be offering something which stands out as being different from my competitors "run of the mill" offerings.
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

We saw an immediate profit increase when we removed ready mades 10 years ago, that was then this is now, different economy, good luck with it.
Roboframer

Re: Outlook for the new financial year (2013-14)

Post by Roboframer »

What we're thinking & doing for the year ahead is what we do all the time, regardless of the state of the economy, and that's doing our best to make people realise they don't need to go anywhere else because they won't get a better product/selection/service/etc.

We do plenty of ready-mades too, stuff you won't see in Ikea or hobbycraft or even John Lewis.......... and maybe some stuff you might - well at John Lewis anyway!

What we find with ready-mades is that (1) many people looking for them as a cheaper or more convenient option, realise that what they have isn't actuallly a standard size and if they shoe-horn what they have in to a standard size - or maybe have a mount cut that will have vastly unequal borders, it'll look like crap - so they approach the counter - and then ... they're mine MUUUUAHAHAHAH!

Then (2) there's those that DO have standard-sized things, but can't find a ready-made that's just right, close maybe, but not just right - so ........ MUUUUUAHAHAAAA! But in Ikea, Hobbycraft, John Lewis, etc - the same customers would probably make compromises because there is no framing design counter and that's where they're going to go if I don't sell ready mades.

Then (3) there's those that DO find absolutely what they want ready-made - but a fair few of those don't actually walk with what they chose because they've shown me what they're going to put in to it and - you've guessed MUUUUAHAHAHAAAAA!!

So that's three types of bespoke customer I'd've lost if I did not sell ready-mades!
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

There are very few people that walk into my shop that go away empty handed, I even get most of the I only want a clip frame crowd.

First question is, any reason you want a clip frame? most don't want to sound cheap so they will say they like the look, then you have them.
If they say, because they are cheap and I only have £3 then off they trot to asda on the next block

I only have to Convert 1 in 5 to make it not worth selling ready mades, I reckon I get 7 out of 10 at least (mabe it's my good looks and winning smile), it isn't hard, they are already in the shop, they already want a frame.
The best thing is usually I will see them again, and they no longer ask for a ready made / clip frame.
Of course these are just my findings, every business is different and every customer /client base is different, until the day I can't convert most, my shops will remain ready made free.

By the way I do have some ready mades in the window to get the spur of the moment people in, these are anything but standard sizes, and all will have fancy shaped mounts, or lettering, and we usually convert to bespoke once they are in, the hard bit is getting em in. When I am talking about readymades I mean rows of standard size frames.


I love the MUUUUHAHAHAHA feeling it warms the heart.
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Re: Outlook for the new financial year (2013-14)

Post by Steve N »

Good post Robo :yes:
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Re: Outlook for the new financial year (2013-14)

Post by A Few More Words »

At the beginning of any year it can be difficult to guess what any of us will have achieved by the year end. We can’t predict the future, but we certainly need to make some plans to attempt to achieve our goals, whatever they may be….without a plan , we only have hope ( which is neither a plan or a strategy) Every business is different, but all have the common bond of having to produce an annual profit and loss account, which was best described to me as our “score-card” for the year or “end of term” report.

After an extended period of “recession” already past, most businesses have already cut their overheads and administrative costs to the bone and there is (or should not be) any fat left by now. The real focus these days must be on all “above the line “ activities………Sales / Cost of Sales and Gross Margin and on our efficiencies in delivering these.

Last year, we took on board the concept of increasing our sales turnover by 47%......we failed !
This idea is based on increasing 4 key measurements within our business, each by 10 %.
Ie 1.1 x 1.1 x 1.1 x 1.1 = 1.47 !!

1> Get 10 % more customers to visit your store
2> Get your existing customers to frequent your store 10% more often
3> Increase your prices by 10 %
4> Increase the value of your average sale by 10%


If you were to ask the people working with you….by what percentage they thought they might be able to increase any of these key measurements, they would guess a lot higher than 10 % each. What do you think you can do in your business ?

In our case, we built our main year “plan” around these 4 elements …some of our areas of activities exceeded our expectation, while others fell far short. Bespoke framing sales increased by 10 % over the previous year, while Ready made frames increased by 70%, with an overall increase in sales of framing activity of 20%. We didn’t reach the elusive 47% increase, but perhaps we were already active of improving some of these elements before we took on the 47% challenge. ( everyone’s baseline activity will be different)
Regarding the 4 elements above, we were most successful with 1 > and 3> . We are continuing to work on achieving 4>

We do believe that our great increase in RM sales is depressing the increase in Bespoke…….but that may not be an altogether bad thing. We make up the RM frames (wood) in batches, by moulding, so we achieve a much greater labour efficiency than when we are doing individual job bespoke work.
Having a range of suitable RM frames available, creates more streamlining of our framing process as more and more of the lower value jobs are now captured and dealt with at the front counter as a RM sale , leaving the higher value bespoke jobs …to become “framing jobs” that pass thru the workshop. We do not price RM frames low and have included many “deluxe” frames to our RM range, where in many cases the pricing would be similar to that of a Bespoke. Quite often it’s the higher value, most desirable, high margin RM frames that sell best . On balance, these RM sales are as valuable to us as bespoke jobs, when you take efficiency and labour into the equation.

It is generally accepted that less than 5% of homes have some bespoke framing hanging on their walls…..so undoubtedly some of our RM customers are from some other portion of the 96%...but also perhaps more of the younger generation of framing customers require a frame NOW…….not in 2 weeks, which is our normal delivery cycle.

Last year, I got an interesting insight on RM frames from a Fishmonger ! Traditionally, fish mongers have a display of fresh fish…..the customer asks for some fillets or steaks etc….the monger then selects and plops it on the scales and announces the sale price……all the while the customer is standing there in trepidation of what the price might be ! Anyway, this fishmonger rearranged his shop and as well as his existing “loose” fish , in the new layout he also included a nice fridge along one wall with a complete range of fresh pre-packed fish…all weighed up, labeled with relevant info and the price clearly shown…….His new pre-packed range (of the same fish ) took off !..........Why ? ….because the customer could see straight off, what they were getting ( as well as touch and feel the package) and for how much….the mystery and the FEAR were taken away. There are definite parallels here in our bespoke v RM framing scenario.

As for 2013…..???? We haven’t yet pinned down our plan. For me, this is the time of year to stand back and have a critical look at the business…a time to work more on the business than in the business ….analyze the past year , look at the possible opportunities and possible directions and get the strategy together for the current year…then go for it !

So sorry for the long post, but anyway, that’s it for now…..onwards and upwards !

Thanks
Tom
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Re: Outlook for the new financial year (2013-14)

Post by Steve N »

Love the bit about the Fishmonger
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

I had ready mades, rows and rows of them, cheap and expensive all priced, with our own logo on the paper bit in the middle and sizing info and we sold plenty.

Removed them, takings went up, work load went down.

No matter how it's explained, the fact remains 1 ready made sold is a potential bespoke frame lost and a lot of ground to make up to cover lost revenue and future lost revenue from that customer.

My parents still have the ready made format in their shop, every time I go there I watch customers picking them up, having mounts cut to fit, and them taking a lot less than I would have, my blood boils.

Despite my parents shop being in the town center in a prominent location, with massively higher foot fall and rent 3 x what mine is and the shop is double the size, I take on average 1 per week more, oh and I advertise less.
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

My phone won't let me make posts longer than the one above,
That's 1k per week we take more.

My situation may be unique to us, but I doubt it.

Yes it is generally excepted that only 5% of people have a frame made, that's down to all the RMs available your killing your own trade IMHO, no matter where I go in my city I meet people that have shopped in my shop or know someone that does, I think I am helping to get that 5% up, keep pumping those RMs into the system and it will remain stagnant..
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

Furthermore for those that want a quick frame, ee do a 1hour service, this has a £10 extra premium on the price, again more go for it than don't, so more profit.
Roboframer

Re: Outlook for the new financial year (2013-14)

Post by Roboframer »

IFGL wrote:That's 1k per week we take more.
So that's about fifty grand a year for starters

From another thread
IFGL wrote: I think we may hit the upper limit this year.
Which is seventy seven grand.

What am I missing?
Roboframer

Re: Outlook for the new financial year (2013-14)

Post by Roboframer »

IFGL wrote:we usually convert to bespoke once they are in, the hard bit is getting em in.
Diversify! (not you in particular - anyone)

The more diverse your offerings, the more diverse range of customers/chances of those customers coming through the door, which is half the battle.

Ready-mades are a diversification within, and most custom framers offer a range of ready-mades, be they bought in or made in-house or (as in my case) a combination - the bought-in ones being mostly swept/decorative or aluminium. Framed and/or un-framed prints from big or not-so-big name publishers is another "art" - then what, for most framers? A few greetings cards, some 'sculpture' (cast resin probably)?

Then there's printing and digital repair services - still 'within' (framing/pictures/art)

I diversify WELL outside of framing - we have (e.g.) a dry-cleaning agency FFS - who doesn't want to know customers that wear suits to work!

The vast majority of people that set our door chime off would never EVER dream of setting foot in a dedicated custom frame shop, or even one with a few bits on the side 'within' framing - wouldn't even give the window a second look.
Roboframer

Re: Outlook for the new financial year (2013-14)

Post by Roboframer »

IFGL wrote:for those that want a quick frame, ee do a 1hour service, this has a £10 extra premium on the price, again more go for it than don't, so more profit.
Soz for the quotes, not singling anyone out, just catching up.

We don't charge a premium for next day, same day or while-you-wait - we can either do it or we can't - if we can EVERYONE goes for it!
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

The upper limit to have yo de register for flat rate vat is £235k
Roboframer

Re: Outlook for the new financial year (2013-14)

Post by Roboframer »

Cool - thought I must've missed summut! Dunno what the pros and cons of that would be - I jus' make da frames.
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

I wasn't suggesting we have a problem getting people in, quite the opposite, there is usually a Que, the point I was making is if they are in the shop you pretty much have them.
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Re: Outlook for the new financial year (2013-14)

Post by IFGL »

We could not possibly do the 1 hour or quick service for everyone, just because of shear numbers of orders taken, I would have to double my staff for that, I have had to streamline how we work in order to keep up, jobs are now made in batches in order to save time, a job that falls outside of this criteria costs me time and is charged for with the fast service charge.

That said we are looking at setting on x2 part time staff this year.
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