There is nothing sadder than going by one of your favorite small retailers only to find an empty store with a For Lease sign posted in the window. It means someone’s dream came to an end and several employees faced the unemployment line.
We have read many interviews of store owners from that last day, blaming the store’s demise on the economy and online competition. But, what’s really happened in most instances is the owner was in over their head and didn’t know how to make a go of it.
Going it alone
While it’s great to have a vision, going it alone is really difficult. You can do the jobs of two or three people, but you can’t BE two or three people. You need to hire management to help you – even if it’s an Assistant Manager. You need someone who can help you do those multiple jobs so you don’t burn out, become bitter, stop being customer-focused and lose that vision to cynicism.
The right partner can help you immensely whether they are a side-by-side partner or a silent partner. But when you don’t do your due diligence of vetting each other, expectations may be wrong. Deadlines can be missed and the “great relationship” you thought you had at the beginning frays. You need to make sure you each know what the other brings to the table, what you’ll do with disagreements, and exactly who will do what. Opening a new business is a rush, but when that rush fades in a few months, you both need to be bound to each other in order to succeed. Your partner isn’t an employee you can fire easily.
Everyone’s heard it a million times. Location. But what does that mean exactly? Few of us know about correct egress and ingress to a center, traffic patterns and demographics. Fortunately rents are a good clue. Yes you can save 30% with a location that’s off the main road but you’ll probably give that 30% back – and more with advertising to try to get them there. You never want to be 100 feet from success. Yes, Starbucks can go just about anywhere, but you’re not Starbucks… yet.
Enamored with your products
It’s wonderful to curate a great assortment of products from all over the world, ones that aren’t easily found at the big boxes or online. It’s not wonderful looking at a store full of merchandise with customers saying, “I love your store” – but refuse to pay full price to take any of your fine products home. You need to be able to not only sell the merchandise, but also clear it out on a regular basis.
Not focusing on the fundamentals
Profit and loss, break even and cash flow are the basics of running a business. If you don’t want to learn those basics that’s okay, but you’ll have to pay someone to do them for you. You need to be cognizant of your fundamentals, like profit margins, or you won’t have enough money to cover expenses…which can lead to stupid things like not making your quarterly tax payments…which can land you in jail.
Not managing the people
Your job isn’t to be the owner. Your job is to manage and train your people so they do better than you on your sales floor. Do that right and you can build a business that is recession and competitor-proof. Miss that opportunity and they’ll either rob you blind or turnover so quickly that you’ll give up on training them… which is where many smaller retailers find themselves today. You need to invest in your people, or they won’t invest their time or loyalty in you… that leads to them not investing in your customers… that leads to a For Lease sign.
Not leading by good example
Yes, work/life balance is important, but when you’re at work, you’re at work. Letting your smartphone tie you back to your personal life, when you should be working on your business, is a real trap. Employees will see you and do likewise – be even worse when you’re gone. That means no long lunches, no bringing your three year old to work with you, no going home early. You need to balance your distractions or you’ll end up with just a personal life and no business.
The economy is lurching towards recovery. Don’t let these easily fixed problems lead you to throw in the towel. You can compete!