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The Pepperoni principle

Amid a tide of gloom, two stories caught my eye today, each with powerful lessons for entrepreneurs and small companies battening the hatches for a downturn.

First Wal-Mart, which today announced its first ever $100bn quarter. Okay, it’s a mega-business, but it’s no surprise to see these record sales increasingly driven by overseas earnings. With sterling at such great value, UK exporters are in a strong position to diversify earnings streams.

Then there’s the terrific results announced at Domino’s, the AIM-listed pizza delivery business. Sales are up 11 per cent for the first six weeks of the year; profits to the end of 2007 were up a third to £18.7m.

One big factor was a wet British summer in 2007.

But the big news is a huge spike in Domino’s new ways of ordering, whether it’s by text or via the internet, which are up by 60.5 per cent. In the first six weeks of this year, this is a 90 per cent rise and accounts for almost 20 per cent of all sales. Alongside this, DOmino’s doesn’t need premium-priced high-street properties; instead it relies, like other entrants in the home delivery market, on "off-prime" properties.

Lessons in all this: think overseas; use the latest technology to respond to customers’ changing lifestyles; find a business model that doesn’t rely on expensive sites.


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