Monday, February 10, 2014

Simple logic.

I wonder sometimes if some business owners just don't get it.   Like, you know, that the purpose of business is to make money and stay in business.

I have seen this same scenario over and over and over again over on Shelf Awareness (the independent bookstore site).

Here it is -- see if you can see the lack of logic:


A bookstore goes out of business.

They proclaim how successful they were in event planning.

Uh...no.


So I'm going to detail the following entry from today's Shelf Awareness, and use the real names because frankly these people should be called on their lack of critical analysis.

OK.

There are a couple of bookstores in Minnesota called Reading Frenzy.  They've been around for about 3 or 4 years.

They just closed up shop, saying:   "...sales didn't cover costs..."

The very next line is:  Reading Frenzy had an "...an extensive schedule of author appearances and creative events, including mystery dinners, a pie contest, turtle races and the Frenzy Games (at which "contestants competed for a hundred-dollar gift certificate in near-death matches of rock, paper and scissors.)""

What conclusion do they draw from this?  The owner is quoted as saying she's..."good at events planning and aims to set up a marketing and events planning business."

You just went out of business!  How is this successful!!!

The only reason I call this bullshit is -- I see the same exact chain of illogical thinking over and over and over again.  It's the common wisdom.  It very much reminds me of the same chain of illogical thinking about downtown events.  I'm one of, if not the oldest existing business by the same owner in the same location in downtown Bend.  I don't do event planning.  I'm a thriving business.

But I've talked to so many business owners over the years that are gone, gone, gone.  And each of them said, "Events are bad for business on the day they happen.  However it is good for business the rest of the time."

I repeat.  They are gone, gone, gone, and I'm still here and I'm just going to say it -- they were wrong, wrong, wrong.

But once a certain mindset sets in:  "We were fabulously successful in our events.  But we made no money."  You just can't seem to get rid of it.

It's simple logic.  If you can't do simple logic, don't open a business.

Just so you can see that I'm not exaggerating or misrepresenting the lack of logic, here is the original article in full:


"Store Closing, Reading Frenzy.


Founded in Zimmerman, Minn., in 2010, Reading Frenzy opened a branch called Reading Frenzy Corner last April in the new Elk River Area Arts Alliance Building. The original Zimmerman store closed six months ago, and the Elk River store closed at the beginning of the month.

Reading Frenzy sold new and used books and had an extensive schedule of author appearances and creative events, including mystery dinners, a pie contest, turtle races and the Frenzy Games (at which "contestants competed for a hundred-dollar gift certificate in near-death matches of rock, paper and scissors").

Sheri Olson, who owned the store with her husband, Mike, said that sales didn't cover costs, so they decided to close "even though we'd had a fantastic time and had all these fun events."

One silver lining: Sheri Olson said she learned that she's good at events planning and aims to set up a marketing and events planning business."



Here's the thing -- I've seen the exact same chain of logic -- or lack thereof -- dozens of times over the last few years, and no one seems to see it.
 

3 comments:

Duncan McGeary said...

So why on earth would I hire this woman for event planning when she couldn't even succeed in keeping her own store open?

Andy Z said...

I guess for some people simply buying and selling goods for a profit isn't enough. They get into bookselling because they LOVE books, not necessarily because they are particularly good at spreadsheets.

I mean lets face it, in 2014, running a bookstore has to look like a bad investment to people with any real interest in making money. So bookstores tend to be run by book lovers, and book lovers have to express that beyond standing behind a counter.

I mean it's different in a town like Bend, anyway. Your audience is limited.

Duncan McGeary said...

I understand what you're saying, Andy. But I still think it is a prerequisite for a business to make a profit -- the definition of, actually.

I always joke that if you think you're going to run a business and just break even, I guaranteed you'll lose money -- after all, I do everything I can to make a profit, and often don't.

Love books? Volunteer for the library? Work in the bookstore?

Running a bookstore requires making a profit, just so the bookstore can do the job properly.

I think bookstores can be profitable if you treat them as a business. That's kind of what I'm saying.