When you ask a SME business owner, “What is your biggest headache?,” he/she will tell you: RENT. Soaring rental rates, which can take up to half of a company’s operating cost, are forcing SMEs to shake up and move out. Many are going down under with rents not coming down fast enough as the economy weakens.
Mrs Ivy Loh, founder of WeeJestin.com, understands how it feels to be under pressure from escalating rental rates and low walk-ins. Seven years ago, the mother of three rented a retail store at $3,800 per month located in the prime Orchard shopping district expecting that the visible storefront would translate to higher pedestrian walk-ins. Business was sustainable with a regular customer base but she made barely enough to cover operational costs.
Mrs Loh’s floral business saw a turnaround after she built her company’s website using Spring’s SEEDS grant. Soon she discovered that her website was garnering more business than her retail front. This got her thinking about her business strategy and what she wanted in life. At that time, Mrs Loh’s children were still young and she did not want to miss out on their childhood years. So, she decided to call it a day at her retail store and shift her operations back home.
This move allowed her to spend more time with her young children and the cost-savings from not having to pay for exorbitant overheads proved to be the right strategy as she diversified her business to include producing BeanSprout pillows meant for infants.
Mrs Loh rents a nine square metre self-storage unit with Lock+Store to store her floral and hamper materials. She cites the 24-hour access to her self-storage unit as a plus point as it gives her the flexibility to drive to her unit to collect her working materials while her children are taking their naps. She also says that the low rental cost, compared to having a retail front, gives her more revenue to pump into stock procurement for her BeanSprout pillows (the fabric is imported from Japan). Mrs Loh does not believe in “marking-up” the price of her products as this would pass on her operation costs to the end-consumer.
Would she move back to a retail store? Mrs Loh says “No” as rents have risen to $5,000 for a 200 square feet outlet. Besides, she will need to fork out close to $20,000 for a six-months deposit to the mall.
For Mrs Loh, the move to Lock+Store is a win-win business outcome for her and her loyal customers. To support Mrs Ivy Loh, you can visit her website at www.weejustin.com to order flowers or purchase the soothing BeanSprout pillow for a newborn.
Kept at constant 13℃
