Wow, are new business owners really that naive?

[TyrantDesigner]

Keeping some general information out of it for the person ... just got done talking to someone starting up a retail store ... they have the shop covered as they are parting the store out as a booth system for a monthly fee ... but that income will really only cover the shop and utilities ... nothing else ... and after that everything that gets sold through the store would be a measly 10% commission... in order for the owners (multiple) to even take home a half way decent income ... they would have to be selling about $12k-36k a month worth of product, and they are going to try to rely on social marketing and radio ads for advertising. ....

Only thing I can think of is that it is a vanity store, husband pays for everything, wife has something to do. It's rather sad really since in order to do what they are doing ... it will take a massive feat of creative marketing in order to take a mediocre retail spot and turn it into anything that is worth while.

I mean really ... are they seriously that ignorant to how little a startup retail store makes in the first 6 months ... or that the reason why most companies die in the first year is not because the company can't pay for itself ... it's that it can't pay for the person running it.

I feel sorry for new companies that think that sitting on facebook and twitter all day will translate into sales for their company ... when one of the hardest things in retail is getting people off their butts and into your store.

Sad, Sad event.

 

[ucmj22]

Wow, are new business owners really that naive?

...yes

 

[Bly]

Either that, or they are pleading their case for cheap cheap signage.

 

[TyrantDesigner]

I don't think it was a plead for cheap signs, more I think about it ... this had to be a vanity shop. ... I would give my wife a vanity shop if she wanted one and our bills are paid each month ... only difference ... whatever she wanted to do would have to turn a livable profit margin within 6 months.

 

[visual800]

We had plenty of them over here they are called boutiques. Everytime one pops up I just cringe. I know they arent making money in those things, high priced junk you could get at walmart and they throw some embroidery on it.

Some people are dreamers and most that do this are cubicle inhabitors that everyday think they are going to break out and go on their own.....but they are scared and they have reason to be. I got so many friends that call me and tell me they have the best idea and they want ME on the top floor as their graphics guy!

I usually crush their dreams and do a quick google search for the idea they have and then report back to them

 

[TheSnowman]

I had a lady come by, and I can see her "store" from here. She had all these ambitions of putting stuff all over her windows, hanging a sign, had a backlit cabinet she wanted new stuff for. I call her the next day and she says "I'm just totally broke, I don't have ANY money". Soooo, she's been "in business" for two months now, and has no signs up except an 8.5" X 11" piece of paper on the door. I still have zero clue what she does...but I guess it doesn't matter.

Seems like the only time not putting any signage up at a new location works, is if you had an old location and you are slammed when you move to the new place.

 

[Billct2]

It's not just "vanity stores" that have this problem. I see lots of people blow a lot of money trying to find the "American Dream" of owning your own business. The problem is those stories you read about some person starting out a business out of theri kitchen and having incredible success... for every one of them there are a thousand in bankruptcy. And it's not just independent businesses, there's been plenty of people going broke opening a franchise business.

 

[rjssigns]

Upshot is a sign shop gets them on both ends.:Big Laugh

 

[James Burke]

Amidst all the heartbreak, we just so happen to have a bright spot in our neck of the woods.

It's a busy antique/craft mall that started with a brand new 23,000 sf building seven years ago. They're on a high-traffic route and are at full capacity with vendors. A long waiting list bears testimony that it's a desirable spot to hang a shingle.

I rent a 4' x 4' booth there for a very modest $30.00 a month, and I don't have to do a thing other than replenish business cards. I don't have anything for sale at the booth, and it's more like a trade show display. We have product on display along with a printed 4' x 7' vertical banner against the wall showcasing some of our higher-end jobs.

The ROI for that little marketing channel has been an absolute cash cow, and the word of mouth marketing that comes out of that place further compunds the payback.

JB

 

[CES020]

There's a mall not far from me and I had a conversation with a business owner in the mall. He told me his rent in the mall was almost $20,000 per month.

My jaw dropped.

I think of all the stores in that mall, and I wonder how the heck you sell greeting cards for $3.00, pay rent, salaries to stay open 10 hours a day, 7 days a week, utilities, insurance, etc. Every time I walk through that mall, I wonder just how the heck people do it because they can't be selling that much product. If you made $2.00 on a $3.00 card, that's 10,000 cards a month just to pay the rent. That's about 333 cards a day, just to break even. Every time I walk by the greeting card places, they are all but empty.

I often wonder if a lot of these places are setup to lose money just as a tax shelter for someone somewhere, because there's no way they are making a profit.

 

[James Burke]

I often wonder if a lot of these places are setup to lose money just as a tax shelter for someone somewhere, because there's no way they are making a profit.

I believe so...we have a couple of stores like that here in town and I always wonder how they make it...especially when the owner sits outside on the sidewalk with a cigarette and coffee all day.

I don't know about you, but the only time I can sit and drink coffee is when I'm going through my emails and perhaps browsing the forum on break.

Even during "slow" periods....there's always something to be doing.


JB

 

[mark galoob]

i see these people come in all the time...they want to start a business...yet have no plan and are EXTREMELY underfunded...even to the point that they dont feel they need more than 250 business cards. some only want 50 business cards...talk about expecting yourself to fail...

whats really sad is watching local yokals try to open resteraunts...these already have an extremely high failure rate and ive seen several locals try this and sink their life savings into it and of course it fails for various reasons. i route for them, but know there is very little chance for succsess for them

mark galoob

 

[synergy_jim]

When people ask me how I did it, I tell them to empty their life savings, pray a lot, and make sure you have enough money to float the business for 12 mos. without making a dime. Then in years 2 and 3 get ready for massive headaches and hoping you can make enough to pay your bills.

If that sounds like fun to you.... go for it..... Otherwise, stay at your job....

 

[James Burke]

When people ask me how I did it, I tell them to empty their life savings, pray a lot, and make sure you have enough money to float the business for 12 mos. without making a dime. Then in years 2 and 3 get ready for massive headaches and hoping you can make enough to pay your bills.

If that sounds like fun to you.... go for it..... Otherwise, stay at your job....

 

[tattoo.dan]

When people ask me how I did it, I tell them to empty their life savings, pray a lot, and make sure you have enough money to float the business for 12 mos. without making a dime. Then in years 2 and 3 get ready for massive headaches and hoping you can make enough to pay your bills.

If that sounds like fun to you.... go for it..... Otherwise, stay at your job....

Yup!

 

[SD&F]

I see them up where I am open and close regularly. I usually drop in to the new shops to see if there is anything interesting. I can't say that I have seen anything worth buying or selling in them. I think people feel that they know what sells based on what they like. They go from there AND beleive it will make them a good living. Sorry folks,
you work very hard, you give 100% all of the time and by your 3rd-5th year you will be able to see.....if you last that long.

 

[ucmj22]

Im content signing the back of the checks... for now.