* Calculations use average data for Russia

- Alexander, tell us about your business experience, how long have you been doing it, and what makes it special?

I have been in the meat business for four years now. Now I have several butcher shops that sell chilled meat and semi-finished products. Most of the sales are retail, the rest is small wholesale.

There is a second direction - this is the equipment and opening of butcher shops with subsequent leasing, something like a mini-franchise of a butcher shop.

That is, when a person wants to open a butcher shop and sell meat, but has little understanding of this, does not know where to start, and there is not enough money for independent experiments - I help to open and bring the store into profit.

It differs from the classic franchise, first of all, in price, it is significantly lower, and in a more flexible approach, that is, instead of rigidly implementing the standards of my stores, we develop standards together that best suit the place and the person himself.

Many people think about starting their own business, but not everyone ends up opening it: the fear of uncertainty, instability, high risks, and so on stops them. Was it easy for you to decide to become an entrepreneur? How did you come up with the idea to start this particular business?

Yes, there are many fears, they are still there, and probably always will be. I would not say that it is not difficult to become an entrepreneur, but it is difficult for them to remain, you already need to learn this, not at the institute. Opening something is not as difficult as it seems at the beginning, making it at least profitable is already a challenge, not to mention making it better. And with fears, sports have always helped me to negotiate - I was seriously involved in biathlon and was fond of mountaineering, now the emphasis has shifted towards the latter. For me, he is a better help in business than even theoretical training.

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In the process of creating a business, a certain rebirth takes place - a transition to the other side of the barricades. You can’t become an entrepreneur and not change your fundamental foundations, your worldview and attitude, at first, of course, I didn’t understand this, it seemed that there was enough knowledge: I studied like and managed, in general, I was clever. And, of course, I wanted to decide for myself how much to earn and when to rest.

My first entrepreneurial experience was in partnership, intuitively I understood that this was the wrong way, but then the fear of moving alone took over, everything ended quickly, and by experience I realized that partners for business are evil, at least equal . The further transition to this world was already real - no guarantees, salaries, and the knowledge of how to do everything suddenly disappeared somewhere ... The elementary things - to call and offer your services - were tuned in for half a day.

But, despite all the difficulties, this is a wonderful way for development, for me even faster than sports. Here it is important to moderate your pride and go to learn from those who have already passed this path. Mistakes at the beginning are usually typical, but they, in most cases, do not allow the business to grow. Due to elementary mistakes, I closed two businesses. And you could ask an experienced person and not spend years understanding the basics.

But one way or another, there will be mistakes, there is no need to be afraid of them; I do not think that there are people who, after reading some book, or talking with an intelligent and experienced person, will go and do everything exactly as it is written and said. Firstly, they will not remember everything, and secondly, they will not understand everything even if they remember, because they do not yet know what to pay attention to, respectively, they will do as they understand, and make mistakes.

The main thing here is to write down your experience, remember what that mysterious entrepreneur said about this, compare and analyze all this, draw a conclusion and move on. You start to get stuck when you don’t analyze your activity for what works and what doesn’t. Moreover, when I just sat in the evening, thought, drew conclusions, the next day I don’t remember this gathering, but there is an illusion that I’m developing something there, as a result, the movement is only in a circle and then depression. In general, you need to write down as a researcher, then there will be history and here you can already draw conclusions. This activity is difficult and often painful, but indispensable for moving forward.

In the meat business, I started my first steps with the production of semi-finished products for dogs, my wife and I bought a dog, and I found that there was no convenient offer for natural feeding on the market, but there was a demand. I decided to do it, I started from scratch, the sale was carried out with home delivery.

At first, there was no thought to sell meat to people, it seemed that the competition was high, but my clients, to whom I brought food for dogs, began to be actively interested in meat for themselves, this was the initial impetus, that is, the main thing appeared - demand, for raw materials already there were some developments from the production of food for dogs. At that time, I did not know how to build a competent system for delivering meat to people, so I took up something that was more understandable, that is, I opened a butcher shop. At the start, my clients helped me a lot, I think that with the experience that I had then, I would have missed them a lot.

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Summarizing this important issue, I can say that even when I closed businesses, I did not regret that I dived into this sea. I have already said about what helped and is helping me, but nevertheless I will repeat myself, so as not to forget myself inadvertently: you need to learn from those who have gone this path, record and analyze your actions.

What difficulties did you face in the initial stages of doing business?

Let’s make the specifics clearer for people, I’ll talk about the butcher shop, but not in general, this is how a vague idea of ​​​​the subject is usually created, but I’ll talk about important details, without which the item (shop) does not work.

The very first thing I ran into on the opening day was that I didn’t have prices at which I was going to sell, I didn’t know the prices of competitors on the market, and I didn’t know how to calculate them correctly either, it’s right that there is enough profit for everything, and people would buy at those prices. This seems to be obvious and understandable to everyone, the basics, so to speak, but I’m not the only one who stumbled on this, I would even say, I don’t know those who didn’t step on it.

One of the reasons for the incorrect calculation of prices was the cutting of meat - this is the next stumbling block. She was, to put it mildly, unprofitable. Here the butcher let us down: he knew only how to cook. It is clear that I myself found him and hired him myself, therefore, my fault, and I had to study it all myself, understand the butcher's bread, so to speak.

If you do not know the basic techniques and tricks of cutting for sale, then you can lose from 10 to 25 kg of meat from one carcass, and this is a guaranteed loss. That is, he cut off a piece along the wrong line, and a different proportion of bone and fat turned out, and it will be possible to sell this “creation” only at a price 2 times lower than the purchase price, simply because in the eyes of the buyer it has no greater value.

It was easier with sales, I already had experience, it didn’t take much time to understand the specifics, but still it took. There were difficulties with a beautiful display, with how to correctly tell a client about meat, how to sell ugly pieces, gradually they began to sell everything, almost nothing was thrown away, but there were losses due to unfavorable prices and cutting. On this I lost not a single month and, accordingly, I lost money every day.

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But something else was worse - because of the experiments with cutting and, most importantly, with the price, I began to lose customers, as it turned out, people like a certain constancy in buying meat.

An even more serious obstacle turned out to be that for some period this whole routine absorbed me completely, from 6 am to 12 pm, respectively, I lost sight of many strategic issues. Difficulties with suppliers appeared, employees became even more dependent, I did not prepare replacements for either one or the other. Sports experience helped to work in this mode, but on the other hand, if my strength had run out earlier, I would have gone through this stage faster and would have stopped pretending to be indispensable in the store.

Of course, you need to know in detail how to butcher and sell meat, otherwise you simply won’t understand how to manage employees and what standards to set for them, but it’s completely harmful to do it yourself, replacing employees. Harmful for yourself and the business as a whole. Physically, you can master one, maximum two stores, yes, sales there will be excellent, it is absolutely natural that the owner sells much better, but this is not the merit and task of the entrepreneur. It's like hammering nails with a violin, you know? In general, it is, to put it mildly, sad to be a hostage of my store, so I killed this perfectionism in myself and accepted the fact that sales would be lower than possible, but on the other hand, I freed up time for further development and opening the next store.

If you noticed, I did not mention the difficulties with SES and Vetcontrol, which frighten many at the beginning, including myself. In practice, all these fears come down to polite and cultured conversation. Summing up this question, I want to emphasize that all the difficulties are actually quite easy to overcome, I repeat, it is not necessary to do all this yourself, you just need to find out all the details in detail and use ready-made solutions.

According to your estimates, what is the minimum amount with which you can start this business today? What equipment will be required?

A meat retail store can be categorized as a soft entry and exit business, respectively. For beginners on their way in business, this is a great option, not in every case this is possible. Starting an unfamiliar topic from scratch or small amounts, in my opinion, is more correct, since at first you simply don’t know which element of the business you need to invest in, and which one is not important at all and will only “gobble up” investments. Moreover, it is undesirable to invest borrowed money - you spend it easily and quickly, and when you start to give it back, you lose the motivation to develop your business.

I opened the first store with $3,400, I tried to save money, almost everything was spent on equipment, later, I already realized that it would be possible and more correct to manage with a much smaller amount. We are talking about rented premises without equipment at all. Buying a property without understanding its prospects is extremely dangerous.

I opened the next store with virtually no investment, agreed on a lease with a delay, there was minimal equipment, I brought meat according to an already established scheme. That is, you can open from scratch, I mean not quite an empty pocket like Ostap Bender, you need to have 700-1000 dollars for the purchase of meat and covering cash gaps. The rest can be negotiated. It's difficult of course. At least, it was difficult for me when you don’t know that it’s possible in principle, that they do it and that’s normal, especially when you don’t know what actually and how to negotiate, which is why you need to ask experienced colleagues for advice.

The minimum and necessary equipment in a butcher shop is a refrigerated display case and scales, although this is not the minimum, I know a store where the display case is just for show - it does not work, but the store is profitable, and even more profitable than many "pompous" stores with a bunch of equipment. I understand that you want your store to be beautiful, so that your friends would not be ashamed to show some kind of pride, like my face is the best equipment, a room of more than 100 sq.m, etc., but in reality this most often turns out to be just “show-offs” , in practice, such stores are not competitive.

The sale of meat has its own specifics, there is not the mark-up here to put high rent and expensive equipment there. In automobile, furniture stores, travel companies, everything can be beautifully and expensively decorated, this is included in the price of the goods and people perceive this normally. But in the meat business, especially in the sale of raw meat, there is a psychological price ceiling, above which people simply do not buy, regardless of any service, they begin to look for an alternative - chicken, fish, etc.

In addition to scales and a showcase, of course, you need a cutting deck, an ax, knives, a refrigerator for storage, but if we are again talking about the minimum, then you can do without it. The first days in my first store, when I was faced with the fact that the butcher did not know how to butcher, the supplier helped me with butchering, that is, he chopped in his shop and brought me ready-made. Well, about the complete list of equipment that is really needed at the start and in further work, I talk on the website in a free course on opening a butcher shop.

In conclusion of this question, I want to note one more important point - the amount with which you will open is not as important as its correct distribution, it is better to leave most of the budget for the period of bringing the store into profit.

Are there any additional administrative requirements (to the premises, experience of specialists, etc.)?

In this matter, things are also simpler than in some types of business - there is no need for licensing, the main document is permission from the SES and veterinary control for placement in the meat trade, but this is not the very first place ... This is the case when the cart can go ahead of the horse for some time, and this is normal, as long as this is our feature that helps at the start.

Also, you do not need to obtain any certificates for products, register a trademark, especially since at the beginning it only harms. Veterinary certificates are needed for products, they must be given by the supplier, in reality this is not always possible, but it can be solved - the easiest way is with a veterinarian who, on duty, periodically looks at you.

In general, of course, it is necessary to comply with the standards prescribed in the document “Requirements for Meat Industry Enterprises” (available on the Internet), but within reasonable limits and means. Once again, I will say that people here are sensitive, first of all, to the prices of meat and make very few complaints about the premises. Of course, they can say the opposite, but practice proves that the price is more important.

First of all, the room should have a convenient location for people, secondly, it should meet your goals and only then all other requirements. Very often, the former is not combined with the latter; this is a common difficulty when finding a room. Here I am guided by the principle that good sales can always brighten up some inconsistency of the premises with accepted standards, and subsequently make it perfect. The reverse relationship is very rare.

No one formally requires certain experience from the staff. It all depends on the strategy of the entrepreneur himself. Someone is looking for expensive specialists, someone takes with little experience and teaches on their own, but it is not advisable to work with those people who have no experience in sales or cutting meat at all. Of the mandatory requirements, this is the presence of a sanitary book and a uniform for everyone who comes into contact with meat.

Summing up, I will say that the main requirement, which can be safely called an administrative one, is a building that is promising in terms of the flow of people, the rest will be corrected along the way, without which taxes to the administrative budget are very doubtful.

What can you save on and what should you not save on?

At first, you can definitely save on almost all equipment, you can take used equipment. Upgrading from profit is not a problem, but it needs to be created first. Even on such important equipment as a meat grinder, you can also save money. Both on the main and on the spare, there are reliable industrial meat grinders, also used, as a spare, an ordinary household one will do. With well-sharpened knives and grates, it can handle 20 kg of minced meat - this is the average volume in a small store. Employees also need to save on salaries, it doesn’t matter that you don’t have work experience, but they can have a lot of it, so it’s necessary for a store at the start. It is better to pay a specialist or an experienced person for a consultation than monthly expenses that are inadequate for work.

You can not save on a refrigerator, I mean such savings when they simply don’t buy it and store the remaining meat in a showcase, this is a very important equipment in a store - with proper storage, the presentation of meat can be stored for up to 3-4 days, I’m talking about chilled meat . The option when there is no money for the camera is also possible, I have already said, meat can also be stored in a display case, if you creatively approach this, or you can rent part of the camera on the market, or from suppliers, but this makes the work very difficult, so in this matter we must strive for independence.

It is harmful to save on lighting, often light is given little importance and economical lamps are installed, the presentation of meat suffers greatly from such artificial light, sales fall instantly. Well, of course, you should not save on the quality of meat, but this is already a strategic issue - to find high-quality, expensive meat in all respects, but at a bargain price.

In general, skimp on anything that doesn't directly help sales and invest wisely on things that increase it. Think carefully about your ad spend.

How long did it take you to pay back the initial investment?

If we talk about when the store began to recoup its costs, then in the first store it was the third month, the initial investment paid off by the seventh month. In the second store, the profit in the first month covered all operating expenses, then for two months I invested the profit in the missing equipment.

I also launched the next store with a minimum, tested the place for a month, bought the missing equipment the next, and fought it off for four months. You see, the terms strongly depend on the amount invested at the start.

And if you buy a store right away or build it at all, then you can pay for it for years, or even “get” with it, the place may turn out to be dead, and even if you dance with the gypsies there, you won’t shake it.

But there is also an opposite example: the place is excellent, a person invests 60 thousand dollars in cool productive equipment and, accordingly, expects to make a good profit, receives 2000 dollars of net profit in the first month, this is a very good indicator, the same amount in the second, but still less he "turns sour", because the calculation was different, that in a maximum of a year he will recapture everything, and he sells all the equipment, of course, at half price.

I repeat that these are good indicators for a butcher shop, especially in the first month, it’s just that the investments are inadequate and you have to wait a long time, and most importantly, I don’t see the point in this, as I already said, such a fancy store has no more chances than a shop in 7 square meters (the area of ​​my first store).

Every store has its own natural sales ceiling. Of course, it can be greatly increased, but it is very labor-intensive and therefore, as soon as you stop pumping artificially, sales will still return to this ceiling, so you just need to switch to the next stage of your business in time.

To recap this thorny issue, in addition to the obvious payback factors that we discussed, there are those that are often neglected, such as income and expense planning and disciplined store money management. Now it helps me a lot, at first I did it randomly, and all the payments took me by surprise, respectively, the work of the store simply got up, sometimes for more than a week. And only when I began to plan payback, income and expenses in advance, the speed of response to such force majeure increased significantly.

Is there seasonality in the meat business?

Yes, there is seasonality. The price of meat can change several times during the year, this is regulated in each region and country in its own way, but this does not affect the retail price and, accordingly, sales so much. But the fall in demand for meat in the summer is significant, and it is very difficult to influence it.

You simply cannot force people to eat meat at this time, especially on hot days, few methods work, half just go on vacation. You need to be prepared for this psychologically and tactically. We buy minimal volumes, reduce cutting, make discount promotions, change the assortment, make barbecue, cooperate more actively with the cafe, despite the fact that this is a difficult client for us. In general, the more flexible the store is in its working methods, the more fallback options it has, the easier it is for it to go through this period.

What kind of specialists should you pay special attention to? How did you select key employees?

The main actors in the butcher shop are the seller and the butcher, at the beginning no one else is needed, and in the future it is better to automate all auxiliary functions (accounting, cleaning, security, purchase of consumable equipment) or give it to a person outside your state. Over time, of course, your replacement will be needed - the manager.

But first of all, you need the right seller and butcher. A bad salesman can kill a profitable store in a matter of weeks, and an illiterate butcher can nullify all the efforts of a good salesperson. I have already said that I faced the task of finding suitable employees and managing them in the first place.

At the initial stage, I solved it for a long time, and over time I came to this formula: it is important not to find good ones, but to quickly replace the bad ones. Therefore, the search and interviews are ongoing, that is, ads are published every week in newspapers, they always hang on the Internet, they periodically send someone from recruitment agencies, and a large base of employees is created, of course, we don’t meet with everyone, mostly this is a telephone interview, the meeting occurs only when we have a need.

Thus, all employees know that they will be replaced at any time, and, accordingly, they work more efficiently. With this feature of work, it became very important to make replacements so that this did not adversely affect the operation of the store, for this I devoted a lot of time to writing standards and instructions, and it took even more time to make them really work.

It happened that a person would “fall asleep” in his experiences and forget such obligatory things as washing a meat grinder or filling a deck with salt, he also had to write separately and hang in several places “for a long memory”, so to speak.

I would like to highlight one important aspect when choosing a seller and a butcher - you can find good workers, do everything right and they will try to do everything according to the instructions, but people will buy badly from them. Well, people don’t like something about them, there is only one way out - to change, there is no need to understand and analyze, it is necessary to change.

Thus, in this issue, I shifted the focus from finding stellar specialists to building a working system for hiring and quickly training employees with little experience.

Obviously, during your work you have tried various ways of advertising. Which advertising media proved to be effective, and which ones did you eventually abandon?

Now I prefer low-cost methods, if we talk about promoting a retail butcher shop, then local methods of attracting customers work best, that is, we advertise a specific store in a specific area, and even within a specific radius, about 800 meters - for bread and meat beyond this distance people hardly walk.

The main and constant tool is posting leaflets with information and news on the entrances, a very ancient method, but it works best, even better than direct mailing in the form of a tab in a free newspaper. People need to be constantly reminded of themselves, and it is expensive to do this in the mailing list, plus many simply do not take these newspapers from the box or immediately throw them away, and the leaflet hangs on the front door of the entrance for some time. Leaflets in elevators still work well, it is possible to read them more than once.

A store sign, signs, pillars, a banner above the road, next to the store - this is not a wish, this is an unequivocal necessity. Simply increasing the size of the sign immediately increases the number of buyers, and when all this together reinforces each other, then even if a person wanted fish today, he will buy meat.

Of course, we use the Internet, but also targeted, that is, we do not advertise a separate store or the entire network, especially since the format of each store is different, and I did not combine them under one name, but we advertise one direction, for example, the supply of meat to restaurants or meat home delivery service, we are now working with companies that deliver products to home, so most of these advertising costs are now theirs. A very good tool for communicating with customers on the Internet is forums, a branch there is much more effective than a separate site.

In general, we try to communicate with the client where it is more convenient for him. I listed all this, so to speak, the tip of the iceberg, and the biggest underwater part is word of mouth. Attracting people to the store is not as difficult as getting customers to tell friends and acquaintances good reviews, it all depends on your front, on those who meet the customer in the store, listen, help to choose and even, perhaps, accompany him to cars. It is really worth working on good reviews, this is a truly grateful tool, especially in the off-season.

What can you say about the competition in your business?

In the meat business, competition is traditionally high, everyone chooses a strategy for dealing with competitors, I prefer to perceive them as partners or colleagues, this is more effective. One store cannot meet all the needs of customers, cannot be a specialist in everything, there is always an unfilled niche, sometimes in a whole city, more often in a district. Therefore, by communicating with a competitor as with a person in the same boat, you begin to better see the situation on the spot, you can divide the spheres of influence and, thus, strengthen each other.

In one of my stores, there was the following situation: people preferred to take minced meat from me, trusted me more in this sensitive issue, even brought chopped meat from home so that we could scroll it, but they still took the meat from a competitor, he did it at a lower price. In the end, we both realized that this trend does not need to be corrected, it even needs to be strengthened. Thus, I have expanded the range of minced meat and almost do not sell large pieces of meat, but only leave a few pieces on the display at an inflated price, just to make the display look nice. Judging by sales, this strengthened both his and my position.

Summing up this issue, from my experience I will say that the most effective way to differ from competitors is in what they are weak in, this is the fastest way to attract the attention of customers.

Has the economic crisis affected your business?

Of course, it was reflected, not as brightly as in the financial and construction sectors, after all, meat is a product of prime necessity, but people have become even more sensitive to the price. For me, this was rather positive - we began to work more efficiently, I revised the business scheme; I closed everything that did not give a result adequate to the labor costs, at the same time I decided not to make a network under one name and according to one standard. In a crisis, of course, there is a certain challenge, people react faster and brighter, that is, if some scheme is initially dead or people don’t need a product, this becomes clear right away. But it's still harder to work. It is much more pleasant if you do not need to make so much effort to increase sales and they grow naturally following the abundance around.

How do you see the prospects for further development of your business? Do you plan to expand or open related areas?

Development is, first of all, sales, we will continue to increase them. Both in their own butcher shops, and sell chilled meat in small neighborhood grocery stores. Now it gives me pleasure to help people open and develop meat shops, even more than when opening my own stores. Naturally, I will continue to develop this area in various formats, both in person and remotely, with the help of various practical courses. Again, as it will be more convenient for people.

Based on your experience, what advice would you give to those who are just planning to start this business?

At the planning stage, when there is only an idea, start collecting information about the meat market in your city, in the area where you plan to work, as carefully as possible. Carefully communicate with those who sell meat, who buy it, who bring it.

Don't just open up on the basis that an idea looks very rosy, or it's new and out of the market. Knowing the best practices is very useful, but without knowing the real situation, it may not be appropriate, people may not be ready for it, and, accordingly, there is a risk of turning the store into just a museum. If such a scenario is at least taken into account, and not succumbed to the charm of the idea, then the first difficulties will no longer become an insurmountable wall. I have a very clear example...

A person inspired and enthusiastically opened a specialized store selling rabbit meat, because this is a rarity ... People come and say: “Oh, great! Do you have beef?” And they answered: “No, we have a specialized store, only rabbits! It's written on the sign! And then the owner shares in a conversation: “I’ve been standing here for six months and every day the same thing! I’m telling the rabbits, what else do they need, why don’t they take it?

Do you understand? People themselves suggest what they need, but the person just “fell asleep” tightly in his reality, I also fell for it, this is a difficult step - to admit that your brilliant idea does not seem like such to people.