Herman: John L. Herman Jr., Author

Should this Shop Owner Stay or Go?

Got a call last week from a woman who happened upon my book by way of her husband. I mail out copies of HERMANISMS every week to a variety of people that I believe could use my consulting services, hire me as a guest speaker or simply buy a quantity of books for their clients or workers. One recipient took the book home to his wife. She read it and emailed me the next day.

Step One on her way out of a problem. She knows she is struggling and is reaching out for help. You gotta love that. Near one the country’s most prestigious Universities a block of houses was knocked down so a new High Rise structure could serve as a residence for students. The building is on a main street and the first level of the building has an array of shops and a “Plaza” with tables scattered in front of the eating establishments. Yesterday was perfect weather wise and I took a drive to visit the business. People were everywhere. And a few were even in this woman’s store.

She sells a beautiful line of stationary, offers custom orders for invitations and letterhead, and the upscale look is quite impressive. The square footage is just over 1,100 feet and with a few racks of cards, the stationary displayed, and the checkout counter there isn’t much room for additional merchandise. I think differently. I think there is enormous room for more merchandise. One wall is completely dedicated to paper and envelopes that match. It is a gorgeous display of color. My first thought is…how much does it contribute in sales and profit? Other than the glass front there are only three walls to use for merchandise and one whole wall dedicated to this paper and envelope display better be worth it from a sales perspective.

The store has been open 18 months now…and I would want to see a breakdown of what categories of product bring in the bucks. While the custom stationary and invitations surely bring a sweet profit margin…what do the causal shoppers buy when they come through the door? Being on the “Plaza” as I call it means that meandering customers stumble in because the window displays are inviting. But what awaits them when they have time, money, and are actually inside the place looking around? Casual customers are not seeking out new stationary…and while they discover that service and may use it later…the space is high cost rent because it is on the main walkway where you expect to get high people traffic. Not having a way to relieve the shoppers of some of their money is one of the reasons the shop isn’t doing better. This place screams for small “gifty” items, a display of small inexpensive costume jewelry, or maybe even a little glass case of chocolates or cupcakes shoppers could nibble on as they stroll down the street.

In reality the premise for the shop is the stationary and invitation service…but to increase that business people need to know you are there and that takes advertising, which isn’t practical. Unless…you hold an event for Wedding Planners, Event Planners, and offer half off their first order which might cost something for a cookie/candy tray and a few bottles of wine…but you would let those marketing to people who need your product who and where you are. And, how about getting some local artists or photographers to display their product…at no cost for inventory…and take a cut for any items sold? Combine the new art/photography opening with the Event Planners Open House and the cost should be limited.

There is a large family owned gift/book/stationary business about twelve miles away that grew from a shop about this size to a multi-million dollar enterprise over a thirty year run. Why not ask to meet with the owner to ask for help. I happen to know the owner would bend over backwards to give advice. Don’t think that asking an owner in your same field would be laughed at. To the contrary, successful people love helping others as a way of giving back.

This shop owner is battle weary. She has faced 18 straight months of an uphill climb and the top is nowhere in sight. Money for new product is scarce and the owner hesitates digging the hole deeper with more investment in something she may have to give up. Staring at the months ahead of rent, the cost of part-time help, and continued slow sales is stressful. Giving up now is being considered. What would my advice be in this situation? Assuming next to no cash is available for new inventory I would do the following:

1) An immediate post card mailer to every Event Planner, Wedding Coordinator, in the city AND include a card to every Business Office within her zip code to alert office managers of your “special half price off on your next order.”
2) Post a sign that asks for artists and photographers to come discuss a display of their work in her store. (Free Inventory)
3) Get on-line and find emails for every website in her area, as well as the various event and wedding planners and send a note about your special. (Free Advertising)
4) Call a small local “Chocolatier” or Baker to put in a glass case of items every shopper can buy and walk the plaza munching as they stroll. The person will want the opportunity to get the exposure and may front the cost of the glass case in exchange for the chance to be in the store.
5) Look into GIFTBEAT, an industry publication and call every company advertising something that could sell to the walk-ins…and again, find someone who will work with you to get the display in your place.

But what if the owner just wants out? Let’s address that tomorrow in another posting.

• Posted: 7 May 2008
• Comments: 1
• Category: Business failure

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