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Cambodia’s second city, Siem Reap- Angkor is an international tourist destination. New businesses open in the major provinces of Cambodia each year, and many existing businesses are sold, to both Khmer and foreign investors. Hundreds of thousands of foreign tourists visit the country every year, and businesses catering to those tourists, and to upscale expats, do well.
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Cambodia Article
So You Want to Buy A Retail Business
If you’re thinking about buying a retail business, there is a lot that you must consider outside of the basic nuts and bolts of the business. There’s an old saying that retail success hinges on three factors: "location, location, location." It’s an old saying because, to a great extent, it’s true - but it’s not always the case. When looking at retail businesses, your #1 goal must be to determine what “drives” the customers to the store.
Location
If the business relies on its location then you’ll want to be certain:
- The lease in place is transferable/assignable and is long-term. You must negotiate additional options to give yourself at least six years of contract length.
- Is there an anchor tenant that brings customers to the locale? If so, then you’ll want to know how long their lease is, and if they have any plans to relocate in the near-term................
Product Offering
If the operation is driven by its product offering you’ll want to be certain that you’re capable of continuing to identify the types of products that customers want. If this function is performed by an employee/buyer, you may want to have them own a stake in the business as well. However, if you’re not 100% comfortable with performing this function yourself, or are not the type that has an “eye” for product, you may not want to go down this road.
Marketing
For some retail businesses, it’s the marketing that brings in the customers, and location takes a back seat...........................
Avoid Working 100 Hours Per Week!
One very important issue for anyone who wants to be a retail merchant is for them to get a true grasp of the actual workload that’s required in this environment. Retail hours can be very long, especially if you’re in a mall where you’re required to maintain certain hours. ...............................
Growing The Business
If your agenda is to make a lot of money, then it’s hard to do so with one location. Growth usually requires expansion. Many times, however, one successful location does not translate well into a second successful one. This usually happens because the owners cannot duplicate the business effectively. That’s why systems are crucial. It’s also why you need to have a crystal-clear view of what brings in the customers and then be able to duplicate it effectively..........
What’s A Retail Business Worth?
Just like any other business resale, there are no “golden rules” to establishing the value of a retail business. The main issue has to be how much the business is making. This is the key component that must dictate the purchase price. Inventory is one element that clouds many retail business purchases. You need the inventory to drive revenue. It may or may not be treated separately in the price....................
What To Do Next?
Lots of people have made lots of money operating retail businesses. If you’re cut out for it, you can also be successful. But, you’ll want to weigh all of the factors to be certain that this type of business fits both your strengths and the lifestyle you want...........................
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