If you have ever reached a point in your business where you feel slightly unsure about your next step, I guarantee instant inspiration with this episode and Carly’s incredible business journey! In this week’s episode, I catch up with Carly Arbuthnot from Twenty-Eight North. She walks us through how to know when to pivot your business and what it takes to be a successful business owner.

Carly has built a successful retail store located on Main Street in Vancouver. We talk about the unconventional way she started her business and how she managed it through the pandemic. Even today Carly is constantly assessing business performance, pivoting operations, and coming up with out-of-the-box strategies to drive business performance and growth.

1. Focus your business on what the market is demanding, not on what you are demanding!

When Carly started her business, she started small and strategically. Carly recognized a need in the market for vendors who had products they wanted to get into the hands of consumers but who also lacked the resources to be able to rent their own space. She was able to design a business model that focused on solving this very problem. During the early stages she was unsure about the consumer demand, so focusing on a short-term model allowed her to test her business with very little risk.

Once the business proved to be successful, Carly was able to use the profits generated to plan and expand for the long term. Taking on more vendors and finding a longer-term space.

2. Test & Pivot Your Business Early & Often:

Often when we start our businesses, we have this notion that it will be a sort of set-it and forget. In reality, demands and supply can change faster than you can say ‘whiplash’. Twenty-Eight North was no exception to this model, facing considerable disruption in the form of pandemic-related shutdowns. This was a very larger disruption, however, interruptions can come in all shapes and sizes, so it’s important to be constantly informed on how your business Is performing to be able to pivot your business as necessary.

Carly reacted to the pandemic by:

  • Removing vendors from instore. A model that had worked very well was no longer suitable in the current climate, Carly quickly began removing vendors from instore and freeing up space to bring in wholesale inventory.
  • Adding an online presence: The reduction in foot-traffic highlighted a need for customers to be able to shop from their home.

3. Know Your Numbers:

Some early signs of business and market changes may not be evident in your business. You might miss subtle cues such as fewer client calls, fewer customers walking through the store, and less social media interaction. Or mistake these cues for natural seasonal variances. These metrics are often difficult to measure and could even cause unnecessary cause for concern.  Complete financial data on the other hand provides a more precise measure of business performance, this can include:

  • Trends in monthly revenue
  • Reviewing cost of goods sold and operational expenses
  • Reviewing cashflow

4. Don’t forget about Tax:

Carly mentions one of the biggest mistakes she made in her business was not having enough clarity early on when it came to her responsibilities for tax in her business. This is a very common mistake with business owners, particularly in their second or third year whose business growth suffers because of the need to pay back taxes.

Be sure you understand when you need to register for sales tax, how much you need to pay, and how to put cash aside in your business.

Carly has a very clear picture of her business performance including monthly sales, monthly expenses, and the funding and liabilities she has access to. She can cite her numbers like the back of her hand knowing vendors by margin, her monthly breakeven point, what products turn easily, and the challenges the business faces related to cash movements and managing operating expenses. It is this knowledge that allowed her to grow quickly as she could clearly recognize what worked well. This knowledge also allowed her to spot issues very early and make decisions to change and pivot her business quickly.