Cute Little Store

The "W" in S.W.O.T.

2007-07-26T08:00:00.000-07:00

If you've read a business book or two, especially one about writing a business plan, then hopefully you've come across the concept of "S.W.O.T." analysis. S.W.O.T stands for "Strengths" "Weaknesses" "Opportunities" and "Threats". This is something not only to include in your business plan, but an exercise you should do periodically for yourself.

Today we're going to talk about "Weaknesses."

There's two questions to answer here: 1) What are your Weaknesses? and 2) What are your business's Weaknesses?

The second one is probably easier - you're not talking about yourself and being honest about someone else or some other entity is always easier. Examples of Weaknesses in your business could be: poor location; unable to keep employees long term; under-capitalized, etc.

Now let's look at that first question: What are your Weaknesses? You've probably been asked this in an interview once or twice, and you've probably given some answer like: "Well, I'm a perfectionist!" Ugh. That's not a good answer in an interview, and certainly not an honest one here. (Unless your real answer is more like: "I'm unable to complete a project because I focus on too many of the minute details. This prevents me from finishing what I started and moving on to new projects." This is a real Weakness, and something that you really need to work on!)

Once you've identified your Weaknesses, you need to come up with a plan to work on them. In the case of the business, can you relocate? Can you identify why employees don't stick around and make some changes? Are you in a position to seek more capital?

Your own Weaknesses deserve the same attention. In the example above, maybe you need to try setting a deadline for yourself and tell yourself that whatever state of affairs a project is in, it's done and your moving on. Practice this on smaller projects first to build up your comfort level.

Stay tuned... in the next post I'll tell you about one of my own Weaknesses that recently bit me in the tush and how I'm trying to work on it!

Speaking of plans... where's all that data coming from?

2007-07-03T07:15:00.000-07:00

So you've started writing your business plan and you've hit the financial section and said to yourself "Eek! Where's this data going to come from? Is selling this much in my first year or five years realistic? How is any bank or investor going to believe my numbers? "

When I wrote the business plan for The Pot & Bead, I got a little lucky - but I also did a ton of research. There is an active trade association of paint your own pottery studios, and through them, there are several new business consultants. I consulted with another studio owner located many states away from where I'd be located and she was willing to share her financial data with me as part of her consulting service. Because her store was in a similar demographic to mine (similar average household income, similar density of people), the information was useful and I was able to make a case for having realistic numbers. In fact, my business plan was called "realistically conservative".

This doesn't mean you can just walk into any ol' store similar to yours, ask to see the owner and ask him or her for financial data. I would never ever hand over any of my numbers to a complete stranger and most people would find it rude to ask/be asked. Just saying your planning on opening up a store a long way away isn't going to work - LOTS of business owners I know have been flat out lied to about that.

So what can you do? Here are a few ideas:

1) You still might be able to meet a business owner in a similar situation through your own trade association. If not, ask people who know people. Can someone you know introduce you to someone in a different location? Does your cousin and her husband who live on the other side of the country know someone?

2) http://bizstats.com - in particular, look at their "sales per square foot".

3) The US Census has a whole division devoted to "company statistics": http://www.census.gov/csd/ I recently used this website to research the percentage of growth of Hispanic owned businesses in the US.

4) Call up your potential suppliers or manufacturers. They are a great source of info for your industry. Manufacturers want you to be able to sell their product so they're often willing to give you information and/or advice to help get you. They might know what's hot in your area, who else is carrying their product in your area and all sorts of other good information.

5) Contact magazine publishers. Often, when things become popular, magazine subscriptions go up. For example, say you want to open a store just for dog owners. Call the publishers of dog magazines. They might be able to tell you that subscriptions have gone up X percent over X years - which will help you make your case for the potential popularity of your store or service. They also might be able to break down increases in subscriptions by region.

6) Landlords. In order to attract new tenants, landlords often have statistics and numbers for their properties. Usually it's just demographic information (which you need, too), but if you ask, they might be able to tell you how sales have been for their tenants in general. If they're a large company, ask if they'll put you in touch with a business owner in a similar business, but far away location.

Good luck!

(Note: Sorry for the long delay between posts. Retail is a seasonal business and occasionally takes over your life completely... At The Pot & Bead, we just started summer camp and 3 of my employees graduated from high school last week!)

"A plan? I don't even have a pla." **

2007-06-04T21:27:00.000-07:00

Interesting article posted to BusinessWeek.com today:

"Rethinking How Women Build Businesses"

It's a worthy read (for both women and men). One interesting part that stood out:

"...and when you talk about entrepreneurship there is [usually] one way to start a business: Start with a business plan and raise money. It's a very structured approach. We talk about just starting and proving the concept first.
Women often start their businesses without a plan. Women are good at bootstrapping and figuring it out as they go along. "

I find this particularly interesting because if you've spoken with me or have read other parts of this blog, you know that I'm a huge supporter of having a business plan. I'm hoping that no one who read this said to themselves "Oh goodie! I can rent some space, get some product to sell and Boom! I'll have a business!" That's not the point.

The point is (and I've said this before, too) that a full-blown 60-page color-glossy super professional business plan is not needed for everyone who plans to start a business.

Something written down is needed. Something. Anything. The purpose is to solidify for yourself what you're doing - what is your business? what are your goals for the next year? expenses for the next year? where will your find your primary customers? Answering a few key questions like that is all many people really need to get going.

So get going!

[** title is a reference to one of the first episodes ever of "Friends". Kudos to anyone who caught that. :) ]

[Note: If you haven't yet, take the Cute Little Blog reader survey! It's still open!]

Do you know who your customers are? (...and who are you?)

2007-05-22T21:25:00.000-07:00

Who buys your products and services? Do you know these people? Do you know how they found out about you? Do you know why they're buying from you and not your competitor?

Are you meeting their needs?

The last question is the most important and the reason why surveying your customers from time to time is an excellent idea.

At The Pot & Bead, we've tried surveying a couple of ways. First, every time someone comes in to paint pottery they fill out a slip that asks them how they've heard of us. This single piece of information has been responsible for my major decisions regarding our advertising budget over the years.

A couple of years in a row we mailed out a survey. Each year there was a specific theme to the questions we asked. For example, one year we focused the questions on birthday parties so we could figure out how to improve them. Every time we sent one out, we always included some standard demographic questions in order to track where our customers were coming from year after year.

We've also tried the online survey. Mailing surveys to our customer database became very expensive. There are several really fantastic online survey sites. My two favorite are zapsurvey.com and surveymonkey.com. Both offer a free version of their service (that limits the number of questions and responses). I've used the paid version for the store (needed more questions and responses). It was well worth it and cost next to nothing when compared to a mailing.

When making your own survey, think carefully about the questions. Don't ask a question unless you know why you're asking it or what you would do with the results. For example, when we asked several questions about birthday parties we were asking because we were ready to make changes in our offerings in that area so we held off on other more general questions.

I'm practicing what I preach today...

Here's a survey I just put together on surveymoney.com designed for me to find out about YOU, the reader of this blog. Please take the survey... it will help you see how fantastic it is (It only took me 15 minutes to set the survey up once I knew what questions I wanted to ask), and it will help me improve this blog. Win-win, right?

Click here to take survey

(This survey can be taken by anyone who just found their way here - whether today is the first day you've seen this blog or the 10th; whether you've read my book or not; whether you're a close friend or someone I've never met; whether it's the same day I posted this blog entry or a month from now.)

Thanks and have a great day!

Other ways to look at your sales data...

2007-05-14T19:30:00.000-07:00

Last week's blog about how to figure out how your business is doing got me thinking about other ways to track data and I came up with this idea...

How about amount of sales per employee? I don't mean specific employee by name. I mean divide your sales for any given month by the number of employees you have that month.

For example: Let's say your sales in December 2006 were $20,000 and you had 10 employees that month. $20,000 divided by 10 is $2,000 per employee.

Why might this be interesting? Well, let's say that in December 2005 your sales were $18,000 but you had 8 employees and in December 2004 your sales were $16,000 and you had 5 employees. Your sales each year has gone up and so has the number of people you have employed.

So for those three years, your sales per employee were:
Dec 2004: $3,200 / employee
Dec 2005: $2,250 / employee
Dec 2006: $2,000 /employee

On one level, business is good - sales went up each year in December. But your sales per employee has gone down - way down. Given the increase in employees, your payroll has gone up which means any profit will have gone down. So the question is: Are having more employees worth it? If I had a metric that had this kind of trend, I'd start to wonder about the effectiveness of my employees. Why aren't they able to keep up the $ per employee? Do they need more training? Is having more employees making them prone to "someone-else-can-do-it" syndrome?

This is just one metric to think about if you're wondering why your sales are increasing, but your profit is not. There might be a correlation, there might not - it's just one thing to think about. Go ahead and try it. (Other calculations you could do: sales per thousand dollars of payroll; sales per hour the business is open; sales per # of hours of payroll, etc)

Have fun!

How you doin'?

2007-05-08T22:00:00.000-07:00

How's business?

If you're in business for yourself, you've been asked this once, twice... okay anytime anyone who knows you sees you this is probably the first question they ask.

I always answer "fine" or "good" or something else pleasant and upbeat - any other answer isn't all that appropriate for the masses IMHO.

But can you answer this question objectively for yourself? And how do you really know how you're doing? One way (but not the only way) to do that is to compare ourselves to everyone else.

There's a fantastic website, bizstats.com, that has taken data from many (sole-proprietorship) businesses and compiled it in a useful way for the rest of us. Go ahead and click on your industry and type in your gross sales from last year. You'll get a fantastic indication of what your expenses and net income should be based on everyone else.

The other neat thing to check, especially if you're a retail business, is the Sales Per Square Foot (SPSF) section. This is one interesting retail benchmark. Unfortunately, it's not necessarily helpful beyond giving a warm fuzzy. For example, the only stores I can really compare my paint your own pottery business to are the listings for Jo-Ann, Hancock and Michael's (arts and crafts businesses). Note that the SPSF range from $75 to $204 for these 3 businesses. That's a pretty large range. The SPSF for my business happens to be somewhere in the middle.

So what can I take away from that...? If my SPSF was under $75, things wouldn't be good and I'd be worried. If it was over $204, things would be wildly fantastic. It's really just a point of interest beyond that. Since I have a single retail location, I'm comparing my number to these other businesses. If I believed that my current number is acceptable for my single location, and was planning to open a second store, I'd set this SPSF as a goal. Make sense?

So take a look at your numbers and answer these questions for yourself... what's you're sales per square foot for each year you've been in business? What about each month? If you have multiple locations, how do they compare with each other? If you're not open yet, based on these numbers, can you set a goal for yourself?

Have fun!

"Ye Olde Pot and Bead"

2007-04-28T18:44:00.000-07:00

Speaking of names...

That was one of the ideas for the name of my business - Ye Olde Pot and Bead. Obviously it didn't stick and looking back, I'm very glad.

Overall, I've been very happy with the name "The Pot & Bead". It wasn't taken already, the URL was available, and it was related to what we are and do.

It's been humorous, too. People like to giggle and make fun of the "pot" part of the name. Lots of people misread our sign and think it says "Pot & Bread" and come in wondering if we might be some kind of food place. Which is okay! Because they still came in the store and find out about us and go home with info and come back later to paint. Getting people to walk into your store (or visit your website) is the ultimate goal and the hard part. Once they're there, you can use your excellent customer service and fabulous-ness to turn them into customers.

My last word on business names (for now): The time, thought and care put into choosing a name is an important part of the process. Look at it for several angles, several points of view before deciding.

(Stay tuned for upcoming posts on weaknesses, communication, knowing your customers and more. To make sure you don't miss anything, subscribe to this blog through the link over on the right!)

What's in a name?

2007-04-14T05:07:00.000-07:00

Naming your business is an important step when you startup - very few businesses ever change their name after they've started operating. This is something that requires a lot of thought.

I've been asked more than once if a name idea was "cute". It seems that a lot of folks are just looking for something "cute". There are several other factors to consider.

- Use a checklist. Come up with other things your name should be besides "cute". How about "simple"? Short? Make a list of other adjectives that you'd like for your name and run your name idea by this list. You could also have a list of things you don't want your name to be. Like a tongue twister.

- Think about the "brand" and logo that goes with it. Look at the stores and brands that everyone knows. Target is a great example. Think about your logo from day one. You might not design it yourself, but you might have a concept in mind that you can pass on to a professional graphic designer.

- Is the URL available? Your business is going to have a website. If the website URL can be the same name as the business, that's fantastic and should be a consideration. Lots of websites, like www.whois.com can tell you if a URL is taken already.

- Make sure there isn't another business with the same name. Or even a similar name.

Look around at other businesses related to yours and see what they've done. At in the end, you've got to love it, too.

Ask for it!

2007-04-08T20:30:00.000-07:00

I was recently involved in a presentation of Women in Business. One of the women presenting discussed how in general, women don't ask for what they want. Whether or not that's a true statement that defines a gender, it's definitely true that negotiating is a very difficult thing for a lot of people and asking for what you want is sometimes even more so.

I know it is for me.

As I drove home from that seminar, I realized that there was a time when I didn't ask for it when I should have. That was during lease negotiations. I was so worried about the big thing - rent - that I felt that if I asked for all the little things, I wouldn't get the big thing - lower rent. (The little things included what we can do with our windows, parking spaces, the trash, etc)

Well, my rent wasn't significantly lower in the end and in the almost 5 years I've operated my retail business, the rent actually hasn't been that big a deal. In fact, all those little things I didn't ask for have actually been more a thorn in my side and more of a nuisance to day-to-day operations.

I should have at least asked. The worst that would have happened is they would have said no.

Ask for it. The worst that can happen is someone will say no.

Starting with nothing...

2007-03-30T18:23:00.000-07:00

Last night I was asked to give a short presentation on my business as part of a panel of "Women In Business." The following is a short except:

When I started The Pot & Bead I started from nothing.

What I didn't have:

Formal business background - I'm an engineer. I don't have an MBA, I had never taken a business class and I didn't have any prior experience managing a business or a retail store. My experience in retail was pretty limited to working the cash register at a supermarket when I was in high school.
Hidden stash of cash - I didn't start my business with any savings. In fact, I had a bit of debt (house, car, student loans, credit cards)
Experience with the product - Did I mention I was an engineer? I'm not an artist, I didn't know about clay or painting or anything related.

What I did have:

Books on how to write business plans - A business plan was necessary to acquire financing for the business. There are many good books out there on how to write a business plan and what to put in it.
Ideas - Opening up a paint your own pottery studio wasn't my first idea or thought. I went through several, researching, learning, and trying to write a business plan. The idea for The Pot & Bead was the one that gelled.
Resources - There are a wealth of resources out there for anyone who wants to start a business. I am particularly fond of my local Small Business Development Center that holds seminars on starting a business. They also will review your business plan.
Determination - This, of course, was the key. I spent a great deal of time learning, researching and planning. I wanted to be in business for myself. I was determined to make it happen.

And I did. :) If you have a desire and determination, you can do it, too.

Cute Little Store E-book edition now available!

2007-03-27T17:13:00.000-07:00

"Cute Little Store: between the entrepreneurial dream and business reality" is now available in e-book format. Have you read all the great reviews on Amazon but want it sooner and cheaper? Fantastic! Just click here to purchase it now.

Tidbits from this month's Inc.

2007-03-26T03:27:00.000-07:00

Inc., "The Handbook of the American Entrepreneur," is one of my favorite magazine's right now.

While this month's issue's main focus was on "Going Global," I found a few other tidbits worth passing on to other small business owners:

1. Do you understand your credit card merchant statements?
One would think there's an easy answer - Yes. Yet, if I look at my business bank account which I check all the time, there are "Deposits" but there are also items labeled "DISCNT" and others labeled "Collections" and I realized I don't really understand the difference. There was a small 2-page article where they looked at many companies statements and attempted to roll them into one for anybody. While not necessarily applicable to your own card statement or mine, I will be pulling one out and calling the merchant company today and get an explanation for all the line items there. I'm a little embarrassed to say that after almost 5 years, I haven't done this before - I've always taken for granted that money shows up in my account and that the fees removed are straightforward. The message: if you're like me and not so sure about your merchant statements either, pull them out, call up the company and have them explain it.

2. "Many obstacles stand between a customer and a sale. Your job is to remove them."
This was the title of an article adapted from a new book: "Threshold Resistance" by A. Alfred Taubman. After starting a successful real estate development company, specializing in building malls, Mr. Taubman bought Sotheby's and transformed it in the 1980's. The article is interesting, but the title alone is what made me, and should make you think. This nice thing about it is that it's applicable to *any* business. We all have customers - what's preventing them from giving you their money? It could be anything from an unenthusiastic or ill-trained employee who's greeting them in your retail space to having to go through too many clicks on a website. The message: Read that title line again and just think about it in terms of your business.

Just a few things to think about. Have a great day!

A good business begins with a good plan

2007-03-17T10:15:00.000-07:00

I receive a lot emails from people who read this blog and tell me that they are almost ready to start their business, just starting to think about it or they are someplace in between. So today, I thought we'd discuss that monster of a task that needs to get done at the very, very beginning: Your business plan.

If you've written your business plan already, fantastic!

If you haven't, why not? What's holding you back?

Is it that you think you lack time? Well, if you can't make the time to work on a business plan, then you're not going to have the time to plan the business. :) Carve out the time. It might 30 minutes before bed. Or maybe set the alarm to wake up 30 minutes earlier in the morning every day until it's done.

Is it that you don't know the first thing about business plans? That's an easy fix... there are dozens of books out there on business plans. If you are truly starting from scratch, then start with a book such as "Business plans for dummies" (I have it, it's one that I used when writing my business plan).

Is it that you started, but it's not coming together in the way you hoped? Ah ha! This is most interesting. This happened to me quite a bit when writing my business planS. Yes, that's plans with an "S". Before starting my paint your own pottery studio, I had thought of other kinds of business ideas I'd like to try. When I had an idea, I would start writing the plan. If it didn't come together, it was because it really wasn't right. It wasn't right for me at that time. For example, while lots of folks have businesses they run buying properties and acting as landlord or flipping them, it just wasn't coming together for me when I started outlining and writing the plan. It wasn't right. I moved on and went through about 6 different ideas before thinking about my retail store. The business plan for The Pot and Bead just fell into place so easily for me at that time... that's how I knew it was right.

Here is an interesting resource for you: For a while, I ran a second business as a consultant helping people get their business plans together. I'm not really a consultant at heart, so that business, Now Plan This, only lasted a year or so. I shut it down, but I still have one of the tools I created. It's a business plan questionnaire that I'm now giving out for free:

Download the PDF business questionnaire.

It's similar to a business plan template, but instead of headings of sections to fill in, it asks the question for you to answer.

The theory is, if you're starting a business, you darn tootin' should be able to answer these questions. If you can't answer the questions, that might be a red flag before you get started in really opening the business. Note: since Now Plan This no longer exists, this is not a form to submit back to me or anyone else. It's provided free for your reference. However, if you have a specific question, please don't hesitate to ask.

More about the early days of getting The Pot and Bead into existence can be found in my book: Cute Little Store.

Thanks for reading!

Foul language, bad spelling and religion are not usually good sales techniques...

2007-03-02T09:21:00.000-08:00

All three of these things - naughty language, bad spelling and religion - were used on me the other day in some form of sales pitch. None of them worked.

The first was an email I received from someone overseas who was looking to network with other writers. He used some foul language in his introduction (in the form of a 4 letter word). Now, I might happen to be this informal among my very close friends, but it's in no way, shape or form appropriate in an introductory email to someone you've never met. I wasn't offended, but I was very put off by the tone it created and won't be responding to that email.

The second email was a solicitation to purchase some form of advertising. The advertising would involve placing my ad with another business' materials. But the name of this other business organization was spelled wrong by the sales person. Over and over. It reeks of un-professionalism that should not be present in a sales pitch.

The last one was the strangest (to me) and most controversial. Let me first say that my purpose here is only to present my view of how I see the business world. My blog is meant to describe how I do business - I'm sure there are others that would view this situation differently.

I received an email from an individual representing a business offering design and graphical services. These are services that I have paid other companies for in the past and it's something that (while I'm not looking for right now) I could possibly have use for in the future.

The email, however, touted the fact that this was a [Religion X] owned business. I thought that was very strange. The first thought that went through my head was "Who cares? What difference does it make?" It detracted significantly from the message of the business service they are trying to provide. I was a little offended - by the fact that this sales pitch was attempting to get me to use something private and personal that has nothing to do with my business to make a business decision.

Religion is a very touchy and personal subject with many people. So if one was going to use religion as a selling point, one first needs to determine if potential sales prospects also subscribe to ? What if I happened to belong to [Religion Y] which is at complete odds with [Religion X]. I might be so offended to the point of spreading negative word of mouth about that company.

One of the goals of selling, especially "cold call" selling is to connect with the customer. Announcing things like religion, politics and the like without knowing who you are talking to will most likely alienate prospects rather than connect with them.

At the end of the day, this kind of sales technique put me off working with that company because I'm not interested in purchasing any service from any organization because they are [Religion X] or [Religion Y] or [Religion Z] owned. It doesn't matter to me and in fact detracts from my desire to work with that organization. I'm interested in purchasing services from a business because they've demonstrated that they can provide a valuable service at a reasonable price.

The message in today's blog is this:

If you're attempting to sell and/or network, do so in the least controversial manner possible until you get to know the other person and build up a comfortable rapport. Err on the side of formality. Unless your politics or religion relate directly to the business you or your customers are in, leave your politics and religion at home. Be as professional with your pitch as possible - that includes watching your spelling and language.

A tip for developing your marketing pitch:

Before making the cold call, or sending the cold email, run your pitch by a couple friends or ideally, other business owners you know and can trust to give you honest feedback. Try to find people who will see it from a different point of view. Also, get other other eyes on your written materials - spelling mistakes aren't always caught by spell checkers.

Questions? Comments? I'm always curious to hear about experiences from other small business owners...

What does it cost to run a retail store?

2007-02-24T10:25:00.000-08:00

I get asked this question by people looking to start or buy a retail store... what are the costs involved? Now, I could go into a whole thesis on the cost on your family, time and sanity, but I think the folks are asking about "the green". How much moola, greenbacks... etc.

Here's a list of the costs involved in running the store. It's related to my specific business of paint-your-own-pottery, of course, but the list is applicable to retail in general. In planning your business, if you believe that the item in the list is relevant, then you'll need to do a little research to determine what the actual $$ might be. Publishing my specific numbers would just not be kosher, and could be misleading if you're in a different area of retail or a wildly different location. If you have questions, aren't sure if an item is applicable, or need help, send me an email or leave a comment.

The assumption here is that this list would be used in the planning stages of a business. If you're already in business, and have something to add, please leave a comment!

The Basics (i.e., things you can't do without):
Rent - plus CAM or triple net; plus real estate taxes that may get passed from landlord to you; plus association fees
Payroll - which may or may not include yourself
Taxes - sales tax, payroll taxes, property taxes, unemployment taxes, etc. This will vary wildly based on your location. Call an accountant to get a good understanding of your tax liability.
Inventory replenishment
Utilities - electric, gas, water, telephone, internet, trash removal (if not covered in CAM by landlord). I also consider having a website a necessity, so add in the cost to maintain the site and your URL.
Insurance - business insurance, works comp, etc. Give your insurance agent a call and get their opinion on what you might need. Note that a lot of what the agent comes up with might be optional (one option I had was to insure the cash in our register - that's not necessarily covered in case of a break-in)
Credit card processing fees - I'm not sure if there's any business starting out today that can consider not accepting credit cards.
Advertising - many newspapers publish their basic advertising costs online
Printing - flyers, brochures, forms, etc
Office supply replenishment - for us, this is everything from computer printer ink and paper to pens to sticky notes to new sets of dry erase markers every now and then
Cleaning supply replenishment - trash bags, floor cleaner, window cleaner, etc. And my employees have become very fond of swiffer dusters and swiffer wet jet .
Other supply replenishment - toilet paper, hand soap, paper towels, etc Shopping bags could go in this list, too.

"Optional" things that we do have at The Pot and Bead:
Security - if you choose to have a system such as ADT or Brinks
Bottled water delivery - a little nicety for my employees and customers. Drinking lots of water is healthy. :)
Muzak - Did you know that it's illegal and you are subject to fines by playing CDs or even the radio in a public place like your store? Having a service like Muzak (XM offers a service for businesses, too) takes care of all that and sounds great.
Accountant - I choose to have an accountant prepare my taxes each month rather then wade through all the papers I don't understand myself.
We also use a couple online services that go into the cost of running the business. Constant Contact ( www.constantcontact.com ) is for managing and sending out e-mail newsletters to existing customers. The best thing I've found for clocking employees in/out is an online service called Time Clock Online ( www.timeclockonline.com ).

Lastly... if you are starting or running your business on any type of credit (i.e., bank loan, credit cards, etc) don't forget to take into account the monthly payments you'll be making, including interest.

These are just the recurring costs. This does not take into account any cost associated with getting the doors open like deposits, fixtures, initial inventory costs and advertising costs. It also doesn't take into account the random unexpected costs that come up from time to time usually when something breaks (the toilet, the water heater, chairs, etc etc).

You can read more about some of my specific money issues in my book, Cute Little Store.

Any questions? I have to go pay a bunch of bills now...

Checklist for opening a retail store...

2007-02-15T07:00:00.000-08:00

I've had many requests for this kind of a list, so here goes. It's based on my experience and anecdotes of other small business owners I know. If you've had experience in this area, please feel free to comment or add your own ideas.

Here's the checklist. It's broken down roughly into 3 sections, and can be followed in the order presented.

1 - Research and Planning
1a) Create a Business Plan. This is a must. It does not have to be a 50-page polished fancy document. It can be as simple as listing your main products and services, your mission and philosophy and some other details. But it absolutely does need to exist.
1b) Create a Financial plan. This is also a must. It can be included as part of your business plan. You have to have an idea of what your expenses will be and a conservative guesstimate of what your income will be. This can't be in your head, it needs to be written down.
1c) Create a Marketing Plan. This can also be part of your business plan. How are potential customers going to know about your business when you start/open? At a minimum, this will be a simple list of things you will do (i.e., obtain a website, attend related networking events, post flyers around town, etc)

2 - Money and Space
2a) Find your space and secure a lease. If you're a retail store, by definition, you'll need space. Most landlords will also require a business plan, by the way.
2b) Secure funding. You might have money in the bank, or you might need a loan. By the time you've completed steps 1 and 1a, you'll know how much you'll need to get through the first 1-2 years. Oh... if you need to seek funding through a bank loan, most will require a business plan. Good thing you've already completed that step.

3 - Get ready to open
3a) Design your store. This might have been done as part of securing your lease. Some landlords will require that you submit a "site plan" for your store during the leasing process. But now you'll need to obtain all your furniture and fixtures, point of sale system, extra lighting and anything else you need.
3b) Purchase inventory. Chances are you'll have one or more regular suppliers so you'll need to arrange with them your first and probably largest shipment ever.
3c) Create operational procedures. This was one of the last things I did before opening, and my procedures are always in need of tweaking, but it was good to know what to do when we opened and was good to have something ready for when I hired my first employees.
3d) Hire some employees. I opened The Pot and Bead knowing that I wasn't going to be in the store at all times, so I started the hiring process right away. Lots of businesses, if they can afford to, hire and train some key employees before opening their doors. You'll need to decide for yourself if this is right for your business.

Now, before I opened, I had a "To-Do" checklist that was more detailed than above and was very specific to my situation - the above list is a simple overview, not meant to be 100% comprehensive. I encourage you to take this as a starting point, and expand each item to create your own detailed list. (Note: I'm in the process of writing the sequel to Cute Little Store and am considering including a more detailed checklist there.)

If you're still thinking about starting a retail business and haven't read my book yet, pick up a copy of Cute Little Store today. It's an easy read and will give you a feel for what it's like to leave the safety of the career you've been in for so long and try something else. I made a lot of mistakes in those first couple of years, which I write about, so you don't have to (make those mistakes, that is).

:)

Why I Didn't Buy From Your Online Store...

2007-01-23T06:12:00.001-08:00

I am an online shopper. It's not that I don't like brick and mortar shopping, I'm happy to do that, too. But I'm perfectly comfortable shopping in pajamas in my office at home.

So why didn't I buy from your online store today when it was a product I was looking for? It's very simple... I didn't know who I was buying from. Sure, the company had a name and a picture of the outside of a very generic looking manufacturing facility, but it ended there.

My recommendation to get folks like me to buy your product in the future: Add some personalization to the website. If you're a small company with a single founder, that's okay. Let me know that. If you are a group of college buddies who decided to make something and sell it, that's fine. Quirky stories about how your company started are okay and let us know that there are people behind the products.

A friend of mine was talking about an idea for a computer services company the other day. He was excited because he had this great idea on how to make the website look like he was a big company, thinking that would inspire confidence. It only inspires confidence if it's real. If it's not real, it won't feel real and will scare people away.

Tell people who you really are. Really.

There's an "Our Story" page on my website for my retail business. It's short, but it's to the point.
Another one I like is http://www.adinaworld.com/ (I happened to find their juice in a store, and then went to their website, but after reading about them, I'm a huge fan.)

Two Newsletters You Should Be Reading...

2007-01-22T17:48:00.000-08:00

In all my research, there are two e-newsletters that are free and are a must read:

1. "The Retail Experience" by Doug Fleener and Dynamic Experiences Group (DEG). Any and every retailer should read every issue of this weekly e-newsletter. The advice is pracitcal, useful and often very easy to implement. You can sign up at: www.dynamicexperiencesgroup.com

2. Rick Segel is another retailer turned writer who has a lot of good, inspirational and usually witty things to say. On his website, www.ricksegel.com , you can sign up for his free "Retail Tip of the Week"

While both of these guys are geared towards retail, anyone in any business that prides itself on customer service (or should be paying more attention to customer service) can learn alot from these newsletters. Get yourself on both of these lists this week.

Happy reading!

Or maybe not...

2006-12-20T09:17:00.000-08:00

I think I may need to take back my last post. I thought I was still on the right track with my theory Monday evening when I spent a half hour in a Super Target and had the same kind of blah feeling... plus, I left without spending a dime. (That's a whole other topic - the fact that one of the hardest things for a retailer to to is get people in the door - I was in, I was looking for something not too specific, spent 30min plus looking, was passed by many of the store's associates, but left without buying anything. If even less than one percent of the people who walk into a big store like that walk out for the same reasons I did... wow... I stagger to think of the lost business. Had I found the main item I had in my head, I would have also bought a pile of groceries. But when I couldn't really find what I wanted, I didn't bother to buy anything.)

But last night reminded me that yep, Christmas shopping is in full swing. I visited the local Mall... First, I have to say that I went to the mall with my holiday shopping complete. This trip was purely to buy myself a new purse. The place was almost a madhouse. The defining event was when I was at the cashier, and a woman finishing up her purchase to the right of me swung her purse around and whopped me on the back... gave me a nasty glance as if it was my fault for standing there and went on her way.

(heavy sigh)

I'm glad I'm done for the year, glad I am able to do more and more of my own holiday shopping on line (or in my living room - I still like to make lots of gifts!) and am very glad (and thankful) for all the folks who choose to spent some of their gift shopping/making time at my own store.

Has secular Christmas peaked?

2006-12-17T15:05:00.000-08:00

It's December 17th - Christmas Eve is a week from today. That means one more week of shopping, presents, wrapping, shipping and all those last minute stressful things that drive us this week of the year. Or is it?

This is my fifth Christmas/Holiday shopping season as a retailer, and it's been the strangest. People seem to be just... well... "blah".

Yesterday was the last day to paint pottery at my shop where we will guarantee the pottery be ready before Christmas. It was also a Saturday. If the past four years serves as any guide, then yesterday should have been the busiest - and I also mean the Craziest... people are usually crazy-stressed by just everything. But that's not the way it was yesterday. Sure, we were busy, but it was an eerie calm kind of busy.

It's not just my store, either. I just got home from a shopping trip where I hit Best Buy, Bed Bath & Beyond and Borders. Three places that I normally shudder to think of heading into this time of year. And yes, they were all busy, but again... eerie calm. And short lines at the register. I had hit both AC Moore and Michael's earlier this week and had the same feeling there, but I figured that was just a weird day. The fact that it's carried through the rest of my shopping spree makes me think that people are acting a little different lately. (we're also experiencing record warm temperatures here in Northern Virginia. I wonder if the fact that it doesn't feel anything like the middle of December has anything to do with it.)

Even though "Christmas" has been around for a long time, the shopping frenzy started in the 20th century. I'm wondering if everyone is not just saying they're tired of it... what if they are? As customers picked up their pottery in my store yesterday, I asked one of my standard holiday questions: "So are you done shopping for the season?" In past years, the responses got were like: "No! Oh my god there's only a week left!" But yesterday, the standard went something more like: "No... eh... I'll get done what I get done. No biggie."

As a retailer, I've had a hard time getting into the mode where I need to start decorating for Christmas in October and playing Christmas music in November and going nuts with sales all through December. Sure, we have lots of Christmas and holiday related pottery to sell... but beyond that, I've never gone to any extreme. Don't get me wrong... I'm just as anxious to sell during this season as the next retailer, but I've never felt I should go to extremes to have to.

Maybe people are finally starting to see that the real value in these holidays is the time one gets to spend with friends and family. As a retailer, I hope that means stronger sales the rest of the year. As a human being, it makes me glad.

I'll be interested to see how overall retail sales numbers look at the end of the year.

When is it time to close up shop?

2006-12-15T14:47:00.000-08:00

Last night, I did my monthly ritual of reading Oprah's magazine cover-to-cover. Suze Orman, the well-known personal finance expert, fielded some questions from the wife of a "struggling entrepreneur".

What has been bugging my brain all day was that the woman said her husband had been struggling with his restaurant for eight years. Eight. Years. That's a really long time to be struggling with a (new) business.

Any entrepreneur is and should struggle at the beginning... but when do you start wondering if you're doing the right thing by staying open? When do you know it's not working? The woman writing in didn't give all the details of how much personal money they've put in over the years or how much they were loosing each year other than to mention that they owed several thousand dollars in back taxes. But you have to wonder... have they been going through the motions all these years thinking "next year will be the one to turn around" or does the husband really just enjoy the restaurant business?

In my book I talk a little about new businesses not making it because the new entrepreneur is under-capitalized and can't sustain themselves through the start-up period - so their business doesn't even have a reasonable chance to grow and succeed. This situation seems to be just the opposite. Eight years and no profit... wow. I don't think I'd have the stomach for it! Kudos for those who do! (and Good Luck!)

:)

Continuing the story..

2006-12-14T18:14:00.000-08:00

Even though my business, The Pot and Bead, has been open for over four years, the stories in my book, Cute Little Store, end roughly 2 years ago. I'm working on a sequel, but so much is happening all the time that I want to share and get feedback on. Hence, this new Cute Little Blog.

I hope this proves as useful to other small business owners (and people contemplating making that entreprenurial leap) as the book has. The book covers a lot of what happens during and right after opening. My business is now in a "maintenance" phase, but one that still requires my attention, dedication and hard work - it's a phase that I know a lot of other small business owners can appreciate.

Please mark this blog and check back... the holiday season is almost over for the business this year, so there will be lots to discuss soon afterwards!