Friday, October 12, 2007

A young woman and her mom came in yesterday and asked for my advice about opening a dress shop (a women's clothing store.....) on Minnesota.

Imagine my surprise ~~~~~~

"Er, you know I'm pretty skeptical of high end businesses?"

"Oh, yes. My sister" (a good customer of mine who'd obviously overheard one of my rants) "suggested that I get the negative side from you."

Heh. Nothing like having a reputation....

"I see. Well, how do I put this in a way that won't I squash your little heart? You see, we in Bend like to take your money, spank you, thank you, and send you on your way...."

Well, that's what I wanted to say. Here's what I actually said.

"You realize there are already 6 dress shops on this street?

"You realize that Bend relies on tourism, especially downtown, and that we see that tourism mostly in 4 months?

"You realize that Bend has a population of only 78k and most of them don't shop for dresses in downtown Bend?"

"You realize that most of my longterm neighbors left because they thought rents were too high?"

"You realize that most downtown businesses are relatively new and aren't proven moneymakers yet?"

"You realize that there has been a high rate of turnover in the downtown area?"

And so on. Gently trying the Socratic method of enlightenment.

But a store owner will do what a store owner wants to do, or they'd never be store owners in the first place.

I sent her next door to the jewelry guy John who is still pretty positive after 3.5 years. And I sent her down to the road to a long established dress shop where I know one of the owners and thought there was a decent chance that if they mentioned that "Duncan sent me," that they might get some information they could use.

I read once, that the Small Business administration up at the college felt they were doing their job if they put prospective owners through the mill and made them realize on their own that maybe their business plan wasn't workable.

Maybe I should've been cruel to be kind.

Then again, maybe she's a genius that will surmount all obstacles and become Chanel number 6 and tell interviewers in decades hence about that awful little man who told her she wouldn't make it....

It's a lot easier to make advice to the cyberworld than to have some eager young person ask you to your face.
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4 comments:

dkgoodman said...

Every time I read your rant on dress shops (and fortunately I've never had an urge to open a dress shop, and if I did I'd go have a drink and take a nap until the urge went away) I always wonder, "Just what kind of shop WOULD work downtown? What could Duncan recommend to bright-eyed young entrepreneurs that would give them a better chance at not breaking their hearts?"

So my question is, in your travels, have you come across other towns of approx 80k people with a 4-month tourist season? What stores are successful there that we don't have here?

A store selling musical instruments?

A psychic tarot reader?

A Sharper Image / Brookstone?

A Discovery / Nature Store?

Enquiring minds want to know! :)

October 12, 2007 at 1:44:00 PM PDT
Duncan McGeary said...

Hey, to be fair DK, I wasn't ranting.

Ranting is one of those things you don't mind saying about yourself, but you hate others to agree.....

So you want me to be constructive, huh.

Actually, now that you've put me to the test, I'm drawing a blank. Jewelry stores seem to have the most success, lately. Hard to say, because other than Karen Bandy, most of them are new.

It's something I've been thinking about in another context.

I was saying that my wife's store is doing well, and how we did a good job and also lucked into a good location, and had enough experience and material to do it affordably, and slotted right into a spot that made us the second used bookstore left in town.

So because we are selling something with a much, much larger base, books, (minority that it is, perhaps) it does better than a much longer lived store with product that appeals to a much smaller base.

But what else is there that fits that bill?

Something that has a customer base, but something the big chainstores aren't doing.

Other than service businesses, which have a whole different dynamic, I'm stumped.

October 12, 2007 at 2:56:00 PM PDT
Duncan McGeary said...

Dk, that's a challenge.

I've actually thought about it, but only have one life to live.

If I couldn't do what I'm doing, I'd do a used bookstore, maybe with trade policy for used dvds, music cd.s, and maybe a few more gifty things, maybe jigsaw puzzles.

If I couldn't do a bookstore, I do have an idea.

Bear with me.

When we first went into the Mountain View mall, we took a little space that had been occupied by a concept called Bangles and Bolts.

It was hardware and jewelry.

Damned if it didn't work.

They were so successful that they expanded, went away from the original concept, and collapsed.I think that people were willing to go along with the joke when the space was 400 sq. ft. but as soon as it grew into a real store, the cheapness of the product became apparent.

At the same time, the Mall manager showed Linda and me another store that was just opening. It was really the manager's idea that he'd talked someone into doing, I think.

Bright colors, and posters and t-shirts and greeting cards, and all kinds of bangly, jangly stuff.

I always thought it would've worked, but it never really got refreshed and replenished.

My idea would be something like that. A gift store. A funky, funny, cool, junky, nifty, weirdly, cool, cheap, gag, funk store.

1.) I would have to have a minimum of a year lead time.

2.) I would have to have a location that had high foot traffic, it would have to be between 800 to 1200 feet to be both affordable and do the job.

3.) I'd have to be able to work it.

Does anyone remember Merlin's downtown? First off, I would have those funky little plastic figures.I would gag gifts. I would have fantasy posters and greeting cards, and designer toys and art books. It would be a pop culture emporium. I wouldn't have mass market stuff like Transformers, but I might have Gundam. I wouldn't have Spiderman, but I might have the Tick. I wouldn't have Monopoly, but I might have Settlers of Cataan.

(This is sounding like my store, but if I couldn't do expensive stuff like books, graphic novels, dvd's, sportscards.)

Basically, I would look for absolutely cool, but funky, but cheap stuff.

This would only work if:

1.) I really had a good grasp of what would sell.

2.) I had enormous margins.

How would I do that? I would start off 50/50 between cool new stuff that had 50% margins, and as cool of stuff I could find at 80% margins. Over time, I would find a middle type, either the original cool 50% margin stuff on sale, or more of the original 80% stuff that sold well.

So, after a couple of years, the plan would be to have one third of my product at 50%, one third at 65%, and one third at 80%. A overall profit margin of 65%. When you realize that the average small business operates at 40% margins, you have a huge potential to make a profit, even if you are in a high-traffic location.

The reason I would need a year in advance would be:

1.) To look through every conceivable liquidation catalog in existence, and pick only the very best.

2.) Look for a way to fixture the store in a classy, but cheap way. Either by buying nice used, or cheap new, or any combination. To use my imagination to find fixtures that may or may not have been intended for that purpose. A hundred baskets for sale, for instance, my be where I put the gag plastic figures.

I think I could pull this off. But perhaps only because I've had so many years of observing what people like and don't like, and developing a good sense of what price points people would buy, and knowing which combination of new and cheap would look like a real gift store and not a junk store. I wouldn't want to be a smaller Dollar Tree.

It wouldn't take many missteps to not work. But if you could pull it off, I think it would be a very lucrative enterprise.

In another life.

October 12, 2007 at 5:22:00 PM PDT
Anonymous said...

Just what kind of shop WOULD work downtown?
*

All things equal walk around, look for a place thats been open more than 3 years, where you KNOW the owner isn't feeding the rent.

There's probably barely a dozen that meets that target. So what's that 10%

The map store comes to my mind, been there forever, useful product. Deschutes Brewery does well.

The odd's of success are small, and on the scale of duncan, your talking min-wage at the end of the day. Thus why shouldn't duncan be straight forward with the kids.

If you put all your life into a biz, your chance of surviving over five years are 5%, and at best you might make minimum wage.

When I study businesses, I always copy success I look at whose making money and copy them, trouble in Bend, there really is no success story, can't use Deschutes because that's just a showcase for the real business. A few of the old time restaurants did well before Merenda, but now everybody sold out or got out, as the competition is terrible, too many people chasing a few tourists.

Folks want to be lied to and feel good, its actually a good thing that most money in Bend comes from elsewhere. Otherwise it really would be a ghost town.

October 12, 2007 at 11:16:00 PM PDT

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