THE founder of nationwide bargain store Poundland gave a talk to business leaders at a lunch organised by Hampshire Chamber of Commerce.
Steven Smith spoke to more than 100 people about the importance of pricing, margins and cashflow.
Working on his father’s market stall to earn pocket money, Mr Smith began to see that even leftover items could be sold if the price is right.
By the time he was 18 he had a plan to build a retail empire with the simple proposition that everything was just £1.
He said: ‘I knew people would be amazed what you can buy for £1. There are no bad products, only bad prices.
‘If you find the right price, the product will sell.’
During the lunch, sponsored by financial services group Smith & Williamson, Mr Smith described how he took an initial loss on selling the spray lubricant WD40 but shifted so much volume he was able to negotiate the wholesale unit cost down to well below £1.
This generated a healthy margin from his second batch order onwards.
A £1m first-year profit was ploughed straight back into the business to fund expansion plans and by the time he sold his controlling stake in 2002, the company had a £200m turnover, 5,500 staff, one million customers a week, and was making annual profits of £4.3m.
Mr Smith said: ‘You have to believe in what you are doing and enjoy it.
‘Always ask what is going to make your customers tell other people what you’re doing.
‘Remember also that your suppliers are just as important as your customers.’
The lunch, at the Grand Harbour Hotel in Southampton, also featured a presentation from Rachel Hardy, director in assurance and business services at Smith & Williamson.
Also speaking was John Loveday, chief executive of Spearhead Compliance Training – a nationwide training provider that Mr Smith has been investing in over the past two years.
Hampshire Chamber of Commerce chief executive Stewart Dunn said: ‘Steven gave us a fascinating and open insight into big business and retailing.
‘Our members really enjoyed his personal thoughts as well as hearing from Rachel and John.’