Last day of February, and we have made it for three and a half months! The time, I must admit, has flown by, but I do wonder how we manage to juggle all our responsibilities. With spring right around the corner, Don's home repair business is picking up again, and the oil shop is attracting more new customers every day. Add to that my part-time gig as educational consultant where I travel to different school districts to work with both teachers and students, and Don's "higher calling" of taking care of the grandkids--no wonder we are tired!!!
Is it worth what some might call not having a life? I would say at this juncture that our life is pretty darn good; hectic, yes. Confusing, sometimes. We have a full life that combines many passions, and right now, we have the best deal going.
One way or the other, we are here to stay...now I have to order supplies for next week. Don says he's already got an idea for the building sign, but he won't tell me what it is. I like surprises (that don't fall off the building :)
Sunday, February 28, 2010
Friday, February 26, 2010
The Real World
An email from a new customer today forced us to do a little research and restructuring (we've been losing our asses on Myrrh for over two years)...
After 20+ years of maintaining fairly level pricing across our essential and synthetic oils, we have finally had to face reality (and the growing disparity of essential oil pricing) and price some of our more costly essential oils accordingly. While this does not affect most people, some of the true essentials simply do not fit the old pricing structure. We will strive always to stock a synthetic equivalent to the more expensive essentials, but sometimes a special order will have to be made. For example, Blue chamomile currently sells for $250.00 an ounce, but Roman chamomile is still available here for $9.00/oz. Don't even ASK about ROSE!!!
At any rate, while the general public inquires about "essentials," most do not know the difference or care--they just want a great smell! Our intention is to give our customers what they want; if that means ordering some essential oils that are a little pricier, then so be it.
After 20+ years of maintaining fairly level pricing across our essential and synthetic oils, we have finally had to face reality (and the growing disparity of essential oil pricing) and price some of our more costly essential oils accordingly. While this does not affect most people, some of the true essentials simply do not fit the old pricing structure. We will strive always to stock a synthetic equivalent to the more expensive essentials, but sometimes a special order will have to be made. For example, Blue chamomile currently sells for $250.00 an ounce, but Roman chamomile is still available here for $9.00/oz. Don't even ASK about ROSE!!!
At any rate, while the general public inquires about "essentials," most do not know the difference or care--they just want a great smell! Our intention is to give our customers what they want; if that means ordering some essential oils that are a little pricier, then so be it.
Thursday, February 25, 2010
Are you hiring?
I would have to say that this is the most often asked question when someone random walks in the door. What interests me is that they do not take time to look around and see what we do. I would want someone who knows and has interest in fragrances in general and oils in particular to work with us. Unfortunately, as a small, start-up operation, hiring is not even in the neighborhood of considerations. The other thought that comes up is the number of people out there looking for a job. The store across the street from us has a "Now Hiring" sign up, and I have sent five or six people over there, but so far, it seems no one has fit the bill for them.
Here are my thoughts: Even knowing the current minimum wage for employees, I would also have to think about taxes, withholding amounts, paperwork to the IRS logging hours and part-time or full-time pay, and with time and a full-time employee, benefits. I don't even pay myself a salary, so thinking of paying someone else makes me stop and wonder. I know, I know--I am supposed to pay myself first. I've read all the books; but first I have to make sure the store has everything it needs. For example, here we are with only four days left in the month, and I wanted to make it without ordering supplies. The good news: I got a big custom candle order from my UPS guy, and I am almost out of wax and the fragrance he wants in all of them. So, I ordered from two different places to get the most out of my dollars. That leaves precious little for rent and other bills. If I hire someone just so I can take off a day or two--or even an afternoon-then I have to take that money from somewhere else.
The other challenge I have to overcome is trust. It is very difficult for me to trust my livelihood, oils, and cash register to a complete stranger. How do people do it? I know some people use cameras and have special keys on the register, and the credit card machine helps track some sales, but still, I wonder how some store owners cull out the trustworthy from those who might cause problems. This goes beyond money, also when I consider the relationship I have with my customers, old and new. Don and I have built a family feeling, and it would take a specific personality and willingness to welcome everyone who walks in the door. Are there folks out there capable of being the perfect employee? Of course! I just have to find that person over time...or close one day a week to recoup my sanity :)
Here are my thoughts: Even knowing the current minimum wage for employees, I would also have to think about taxes, withholding amounts, paperwork to the IRS logging hours and part-time or full-time pay, and with time and a full-time employee, benefits. I don't even pay myself a salary, so thinking of paying someone else makes me stop and wonder. I know, I know--I am supposed to pay myself first. I've read all the books; but first I have to make sure the store has everything it needs. For example, here we are with only four days left in the month, and I wanted to make it without ordering supplies. The good news: I got a big custom candle order from my UPS guy, and I am almost out of wax and the fragrance he wants in all of them. So, I ordered from two different places to get the most out of my dollars. That leaves precious little for rent and other bills. If I hire someone just so I can take off a day or two--or even an afternoon-then I have to take that money from somewhere else.
The other challenge I have to overcome is trust. It is very difficult for me to trust my livelihood, oils, and cash register to a complete stranger. How do people do it? I know some people use cameras and have special keys on the register, and the credit card machine helps track some sales, but still, I wonder how some store owners cull out the trustworthy from those who might cause problems. This goes beyond money, also when I consider the relationship I have with my customers, old and new. Don and I have built a family feeling, and it would take a specific personality and willingness to welcome everyone who walks in the door. Are there folks out there capable of being the perfect employee? Of course! I just have to find that person over time...or close one day a week to recoup my sanity :)
Tuesday, February 23, 2010
Business or hobby?
My brother-in-law and sister got me started learning about oils when they moved back to Texas in the late eighties. Gary and Wendy were masters at showing people how to use oils, and they paid attention to the needs and wants of their customers. In the heydey of Vikon Village, people could find everything they might want, from antiques to country memorabilia, to blown glass, and of course, to fragrance and perfume oils. Many customers remember the hustle and bustle of the market--standing room only--as crowds went from booth to booth to see what treasures they could uncover. I worked with them in their booth at the flea market, and for five years, I watched, listened, and began to understand the way they ran the business. Gary told me it was time I started accumulating my own oils and try setting up a show. My first attempt was at my house, and it was not a good experience. I have tried other independent sales venues (Mary Kay, Herbalife, Tupperware, Amway) unsuccessfully, so my track record suggested that I did not have an aptitude for this. I did not give up though. Again, my sister helped me with a tarp and tables, and Don built a traveling oil rig, and off I trekked to the McKinney Third Monday Trade Days. In the mid-nineties, the trade fair was still small; we did a little better than break even, so I thought maybe I had a chance after all.
Subsequently, Don and I traveled to fairs across Texas and into Oklahoma as I learned more, gathered together a wider variety of oils, expanded my essential oil supply, and learned about the newer designer type oils. We found customers from all walks of life and still have many of them today. I also discovered that some fairs do not fit us well at all--My Fair Lady is great, but not for oils. On the other hand, the Denton Jazz Festival remains as one of our favorite places to vend. By far, Hawkwood Fantasy Fair in Roanoke TX established us as the "oil people." For seven weeks each year for three years, we transformed our traveling rig into a shop that people loved. But, we still considered ourselves operating a hobby, and something had to change if we were going to move forward.
Twice I almost gave it all up--sales were down, Don and I were busy with full time jobs and raising children, and it seemed easier not to travel--oils never got lighter. One person approached me wanting to buy the business, but she offered what I thought too low a price, and I had so much money tied up in product that it seemed silly to give it away. Then, we had the opportunity to take over the business my brother-in-law and sister had started. Vikon had a new owner, vendors left and found new places to sell, and the vendors who were leasing space sold dollar-store items--nothing unique at all. Visitors who had heard about Vikon Village, once the biggest flea market in Dallas, were not discovering the special finds they once did. Slowly, people disappeared, and the flea market began its decline.
We decided, however, to stick it out, and this is where my mindset changed from hobby to business. By this time, I had diversified into making candles and soaps, and I was more knowledgeable about ancillary merchandise that complemented the oils. I started taking credit cards (a big step) and paid my fair share of sales tax. It was also then that I discovered that I was making a profit--small though it was--at this business. Yes, it started as a hobby, and for many years, it was much like a yo-yo as far as sales went. Ownership changed everything though, and I enjoyed establishing my own thing. The seriousness of it became apparent when I started teaching others what I know about oils. My passion for this part of the business continues, and I hope to see Deb's Oils become a place people visit often, refer to their friends, and trust for quality.
www.debsoils.com
Subsequently, Don and I traveled to fairs across Texas and into Oklahoma as I learned more, gathered together a wider variety of oils, expanded my essential oil supply, and learned about the newer designer type oils. We found customers from all walks of life and still have many of them today. I also discovered that some fairs do not fit us well at all--My Fair Lady is great, but not for oils. On the other hand, the Denton Jazz Festival remains as one of our favorite places to vend. By far, Hawkwood Fantasy Fair in Roanoke TX established us as the "oil people." For seven weeks each year for three years, we transformed our traveling rig into a shop that people loved. But, we still considered ourselves operating a hobby, and something had to change if we were going to move forward.
Twice I almost gave it all up--sales were down, Don and I were busy with full time jobs and raising children, and it seemed easier not to travel--oils never got lighter. One person approached me wanting to buy the business, but she offered what I thought too low a price, and I had so much money tied up in product that it seemed silly to give it away. Then, we had the opportunity to take over the business my brother-in-law and sister had started. Vikon had a new owner, vendors left and found new places to sell, and the vendors who were leasing space sold dollar-store items--nothing unique at all. Visitors who had heard about Vikon Village, once the biggest flea market in Dallas, were not discovering the special finds they once did. Slowly, people disappeared, and the flea market began its decline.
We decided, however, to stick it out, and this is where my mindset changed from hobby to business. By this time, I had diversified into making candles and soaps, and I was more knowledgeable about ancillary merchandise that complemented the oils. I started taking credit cards (a big step) and paid my fair share of sales tax. It was also then that I discovered that I was making a profit--small though it was--at this business. Yes, it started as a hobby, and for many years, it was much like a yo-yo as far as sales went. Ownership changed everything though, and I enjoyed establishing my own thing. The seriousness of it became apparent when I started teaching others what I know about oils. My passion for this part of the business continues, and I hope to see Deb's Oils become a place people visit often, refer to their friends, and trust for quality.
www.debsoils.com
Monday, February 22, 2010
Apothecary meets Star Trek
One of the quandaries facing us in the next two months is how to create a space that reflects our personality and the personality of our store. A great compliment from someone who walked in-curious about what we do-said that our store reminded him of the apothecary shops in Germany. That was a very cool compliment! Unfortunately, the new location already has floor to ceiling, wall to wall shelving that is shiny, upscale, and modern. The color scheme is brown and pink with a pink painted metal ceiling (yes, yikes!). The wall behind the central desk is brown with pastel polka dots--so painting is definitely in order and the one thing that will bring the greatest change in looks. As shelving goes, the ones in the store are beautiful and very expensive, but their trendy look sends a different message than what we intend. Therefore, we are considering options that changes the shiny exterior to one more weathered.
We are thinking of fronting the shelves with rough wood or metal strips--again, it is something that we cannot really visualize until we can get into the store for a long enough time to really look at the layout. Although we love the grey concrete floors, we want to soften the look with either area rugs or carpet. I scour Craigslist for possible materials that might serve as functional display and fabric. As we wait for the contract (it does take the property a long time to do this) all we can do is come up with ideas and eliminate them once we discuss practicality and cost. This post seems a little disjointed, but as I get my thoughts down, the ideas are coming together and I will call the property manager to get into the new store to take pictures. Thanks blog! :)
We are thinking of fronting the shelves with rough wood or metal strips--again, it is something that we cannot really visualize until we can get into the store for a long enough time to really look at the layout. Although we love the grey concrete floors, we want to soften the look with either area rugs or carpet. I scour Craigslist for possible materials that might serve as functional display and fabric. As we wait for the contract (it does take the property a long time to do this) all we can do is come up with ideas and eliminate them once we discuss practicality and cost. This post seems a little disjointed, but as I get my thoughts down, the ideas are coming together and I will call the property manager to get into the new store to take pictures. Thanks blog! :)
An outdoor mall, the weather, and the end of the month
Well, the title says it all: Inclement weather forces itself again on our area, and we are looking at perhaps three days this week of rain, ice and snow. This affects us because we are at an outdoor mall, and the chances of consumers trekking around in the cold are minimal at best. That compounded by the already slow Monday (no takers yet on the aromatherapy classes) means that as we enter the last week of February, we are tightening the proverbial belt and watching the bottom line of the monthly sales report. We have made enough to cover basic expenses for this time period, but as we continue to look forward to moving, we know that this is not even near enough to break even and then some.
That is not to say that we are pessimistic--quite the contrary. We are looking at developing new products and have chosen the next couple of days doing trial and error. I don't know if you all are familiar with SoapRocks by T.S. Pink (this is a trademarked product). They are very cool soaps that look like their geological counterparts. I am fascinated by their look, but up til now have been unable to understand how they do it. Don has convinced me that he can take the general idea and make a veritable facsimile of this only with our special twist. In addition, a customer showed me a solid lotion bar in a small natural tube that fits nicely in a bag, purse or pocket. I was able to find the tube at a reasonable cost and will use part of today to fill a dozen or so and put them on the shelves.
What I am saying here is that while I am a little worried about making sure we make ends meet each month, I also know that without new products to keep customers coming back, we are just like every other fragrance shop. I want us to be different...price, quality, affordability, and diversity...come see us and offer suggestions.
That is not to say that we are pessimistic--quite the contrary. We are looking at developing new products and have chosen the next couple of days doing trial and error. I don't know if you all are familiar with SoapRocks by T.S. Pink (this is a trademarked product). They are very cool soaps that look like their geological counterparts. I am fascinated by their look, but up til now have been unable to understand how they do it. Don has convinced me that he can take the general idea and make a veritable facsimile of this only with our special twist. In addition, a customer showed me a solid lotion bar in a small natural tube that fits nicely in a bag, purse or pocket. I was able to find the tube at a reasonable cost and will use part of today to fill a dozen or so and put them on the shelves.
What I am saying here is that while I am a little worried about making sure we make ends meet each month, I also know that without new products to keep customers coming back, we are just like every other fragrance shop. I want us to be different...price, quality, affordability, and diversity...come see us and offer suggestions.
Sunday, February 21, 2010
It takes money to make money
Don't you just love these types of sayings? While I understand this one philosophically, I guess it did not hit me until I owned a store where making the rent payment was so critical. Here we are with just seven days left in February and I need to order stock for the shelves. The trick is that I am also trying to save as much as I can day to day to be sure I can meet the other financial obligations.
Yesterday, I put on my educational consultant hat and worked for six hours in the Dallas ISD holding an AP English workshop for high school juniors (they are great kids, by the way!). This kind of day does wonders for making sure we have something of a cash reserve. Don opened the store and made sure our customers were taken care of. It was a great day for soap and gifts--not so much oil sold, but that is okay. Consequently, I have to use the next several days making soap and candles not only for special orders, but also to replenish the shelves. This is not a bad thing--just a costly one. Now I have to place orders so I can continue to offer my products to people, and I want to spend wisely and judiciously. I don't know if it is matter of going without one thing in favor of making sure something else is done, or working on new products that will surprise those who come in looking for something new.
Part of my business is doing just that--listening to what my customers are looking for and want, and trying to get it at a reasonable price. Because I love research, this is enjoyable for me (to hunt for and find stuff), but sometimes I have trouble finding just the right thing at an affordable price. My goal has always been to offer the same for less--and I will continue to do that. In this weird economy, though, finding quality can sometimes be as difficult as finding those reasonable products. I do not want to waste precious dollars on what looks good on the internet--I think I will start scouring local talent and see what I can find.
Yesterday, I put on my educational consultant hat and worked for six hours in the Dallas ISD holding an AP English workshop for high school juniors (they are great kids, by the way!). This kind of day does wonders for making sure we have something of a cash reserve. Don opened the store and made sure our customers were taken care of. It was a great day for soap and gifts--not so much oil sold, but that is okay. Consequently, I have to use the next several days making soap and candles not only for special orders, but also to replenish the shelves. This is not a bad thing--just a costly one. Now I have to place orders so I can continue to offer my products to people, and I want to spend wisely and judiciously. I don't know if it is matter of going without one thing in favor of making sure something else is done, or working on new products that will surprise those who come in looking for something new.
Part of my business is doing just that--listening to what my customers are looking for and want, and trying to get it at a reasonable price. Because I love research, this is enjoyable for me (to hunt for and find stuff), but sometimes I have trouble finding just the right thing at an affordable price. My goal has always been to offer the same for less--and I will continue to do that. In this weird economy, though, finding quality can sometimes be as difficult as finding those reasonable products. I do not want to waste precious dollars on what looks good on the internet--I think I will start scouring local talent and see what I can find.
My feet hurt
I wonder every day: Why do my feet hurt? Could it be that I am just getting on up there in years, and hurting is just part of life beyond 50? Possibly. However, I think more likely the answer lies in the fact that we are working seven days a week at the store rather than the two days of the weekend. That is the biggest difference, I think, about working in the flea market or weekend traveling to craft shows arena and owning a retail storefront. Even though I had a full-time job teaching, when I worked at the flea market, there were definitely times I could sit and read or visit with other vendors. I did not normally walk around and see what other people offered as wares--I was there to work.
At the store, though, even when business is slow during the weekdays, I am walking around, checking stock, cleaning shelves, and making soap, candles, incense, and the like. I do not like to have a customer come in the door and see me get up out of a chair--it suggests that they are interrupting what I am doing, and their first reaction is to apologize for walking in my store. On the contrary, I want them to see me "busy," even if that means faking it. I will just have to find a good pair of comfortable walking shoes that help my legs feel younger--yea, right!
At the store, though, even when business is slow during the weekdays, I am walking around, checking stock, cleaning shelves, and making soap, candles, incense, and the like. I do not like to have a customer come in the door and see me get up out of a chair--it suggests that they are interrupting what I am doing, and their first reaction is to apologize for walking in my store. On the contrary, I want them to see me "busy," even if that means faking it. I will just have to find a good pair of comfortable walking shoes that help my legs feel younger--yea, right!
Thursday, February 18, 2010
Good credit but no cigar
Yesterday I talked a little about the business plan and the financial/credit report. Both are extremely good documents to complete and update from time to time, just to keep us honest, and our motives clear. What is a little disconcerting is the fact that no matter how good the credit score, this does not alleviate or substitute for a lack of what is called liquid assets. Here is what I learned: Don and I have a great credit score--we should; we have been plugging away at eliminating debt, paying down credit cards at more than the minimum payment, and limiting spending as much as possible, using cash for necessities. However, when we look at moving into a permanent building through a lease, we have to consider the very concrete "move in costs."
First there is the security deposit and the first month's rent (about $6k). We also have to buy a sign and have it installed to the tune of approximately $3k. Then we have to figure in fixtures and displays--even though we can use our current furniture, we have to fit in the parameters of the individual building. Add to that a security system, utilities, a new CO (certificate of occupancy), a sign fee from the city of Garland (they get you coming and going), phone and cable if necessary, and a variety of other little things I am sure we have not even thought about yet.
What this means is that despite all the money we have saved and all the things we bring to the table otherwise, without at least $10,000 to start, we cannot even think about moving in today's commercial market. I refuse to refinance our home or take out a personal loan just to make this work. On the upside, the Simon property we are negotiating for and waiting for the contract on does not require either a deposit or move in fee. We do still have to get a CO, a sign and a utilities sign-off, but those are minor in the grand scheme of things. With a two-year contract, we can revisit a move in the not-so-distant future.
First there is the security deposit and the first month's rent (about $6k). We also have to buy a sign and have it installed to the tune of approximately $3k. Then we have to figure in fixtures and displays--even though we can use our current furniture, we have to fit in the parameters of the individual building. Add to that a security system, utilities, a new CO (certificate of occupancy), a sign fee from the city of Garland (they get you coming and going), phone and cable if necessary, and a variety of other little things I am sure we have not even thought about yet.
What this means is that despite all the money we have saved and all the things we bring to the table otherwise, without at least $10,000 to start, we cannot even think about moving in today's commercial market. I refuse to refinance our home or take out a personal loan just to make this work. On the upside, the Simon property we are negotiating for and waiting for the contract on does not require either a deposit or move in fee. We do still have to get a CO, a sign and a utilities sign-off, but those are minor in the grand scheme of things. With a two-year contract, we can revisit a move in the not-so-distant future.
Wednesday, February 17, 2010
Financial Statement
Besides the business plan, the other important document to fill in and be aware of is the financial report. I filled one out yesterday, and noticed it is much like any other credit type application we might encounter when buying a car or financing a home--although the one I worked with was only two pages and relatively straightforward.
Here is what I got out of this report: I often forget all the assets I have--including the property we own adjacent to our homestead as well as furniture, tools, and the like. In addition, I focus on the fact that I am a retired teacher rather than consider that I am still employable as an educational consultant and an online instructor for a university. Both these "jobs" are ongoing and bring money to the table, so to speak, so they are part of my income. In addition, now that we are starting to thaw out, and people are venturing out of their homes to look at possible repairs, Don's phone is ringing and he is taking on home repair jobs that always help bolster our financial stability.
I tend to look at the liabilities column and see the credit card balances still owed and the bottom line for our mortgage and my car. What helps me rebound is the asset column where we have the value of both home and automobile, both of which are still much greater than what we owe. We are working hard to pay down balances of credit cards; hopefully they will be at zero within 18 months, but that responsibility falls on all of us. We have pared down expenses considerably, but there are some things we still feel important: cell phones (both Don and I use our phones for business) and cable (our only big luxury).
What did filling out this financial report do for me? In black and white and very concrete numbers, it gave me a realistic view of our money situation. It is more than just what we owe. It analyzes and gives a bottom line for our personal situation. This is important not only to a future landlord, but also to us-this report gives us a chance to understand what we have and what we still need to do to stay on the plus side.
Here is what I got out of this report: I often forget all the assets I have--including the property we own adjacent to our homestead as well as furniture, tools, and the like. In addition, I focus on the fact that I am a retired teacher rather than consider that I am still employable as an educational consultant and an online instructor for a university. Both these "jobs" are ongoing and bring money to the table, so to speak, so they are part of my income. In addition, now that we are starting to thaw out, and people are venturing out of their homes to look at possible repairs, Don's phone is ringing and he is taking on home repair jobs that always help bolster our financial stability.
I tend to look at the liabilities column and see the credit card balances still owed and the bottom line for our mortgage and my car. What helps me rebound is the asset column where we have the value of both home and automobile, both of which are still much greater than what we owe. We are working hard to pay down balances of credit cards; hopefully they will be at zero within 18 months, but that responsibility falls on all of us. We have pared down expenses considerably, but there are some things we still feel important: cell phones (both Don and I use our phones for business) and cable (our only big luxury).
What did filling out this financial report do for me? In black and white and very concrete numbers, it gave me a realistic view of our money situation. It is more than just what we owe. It analyzes and gives a bottom line for our personal situation. This is important not only to a future landlord, but also to us-this report gives us a chance to understand what we have and what we still need to do to stay on the plus side.
Business plan
Yesterday got away from me, so I will play catch up today. In talking to a commercial real estate guy on Tuesday, and in looking at a possible store front in a nearby market, I was faced with putting down information in two different formats: a business plan and a financial report. I found a business plan template online, deciding that reinventing the wheel was not a logical thing to do. I cannot believe how many good model documents I can find online! Some scam and want money at some point, but with careful research, an individual can find what he/she needs and tweak it as needed.
This particular business plan was more detailed than I need right now, so I worked on it for several hours, covering the background material that would serve the immediate purpose. The rest (researched background for traffic and customer breakdown in a 3-5 mile radius, statistics for needs, etc) could be done at a later time).
I have always before now avoided this commitment on paper, thinking it was not necessary for what I was doing. However, in finally taking the step, at least to complete Part 1, I am able to see exactly where I have been, where I am now, and where I want to be three to five years in the future. The business plan also requires that I acknowledge what and who I am as a business, complete with mission statement, description of product line and customer base, and short and long term goals. While I would not say it was "fun," it showed me that I have grown from hobbyist to business person in understanding the need for growth and development.
The book I talked about earlier by Bill Collier also reiterates the need to look constantly at the business play--keeping an eye on the prize--to be sure I stay on track and can meet my goals, even if they shift and change depending on what happens in the market of fragrance oils. For my purposes, this plan shows a potential landlord that I know what I am doing with this business. One of the important parts of this plan was an explanation of how my business is different from other similar fragrance-oriented stores. This part is a lot like the question a potential employer might ask a job-seeker: "Why should we hire you? How are you different from the other 17 applicants for this job?" Especially if the landlord has leased space to other similar businesses that have not succeeded and maybe even broken a lease, he needs to be convinced that my situation and business is different.
Now that does not mean I won't fail for reasons out of my control; on the other hand, filling in the parts of the business plan that elucidate strengths, weaknesses, and challenges at least show this lessor that I have considered different scenarios and possibilities as well as solutions to the challenges that may face me. I do not plan on failing. I have faith that I offer a quality, affordable line of products. Unfortunately, business cannot run on faith alone, and so the planning part is critical to acknowledge.
This particular business plan was more detailed than I need right now, so I worked on it for several hours, covering the background material that would serve the immediate purpose. The rest (researched background for traffic and customer breakdown in a 3-5 mile radius, statistics for needs, etc) could be done at a later time).
I have always before now avoided this commitment on paper, thinking it was not necessary for what I was doing. However, in finally taking the step, at least to complete Part 1, I am able to see exactly where I have been, where I am now, and where I want to be three to five years in the future. The business plan also requires that I acknowledge what and who I am as a business, complete with mission statement, description of product line and customer base, and short and long term goals. While I would not say it was "fun," it showed me that I have grown from hobbyist to business person in understanding the need for growth and development.
The book I talked about earlier by Bill Collier also reiterates the need to look constantly at the business play--keeping an eye on the prize--to be sure I stay on track and can meet my goals, even if they shift and change depending on what happens in the market of fragrance oils. For my purposes, this plan shows a potential landlord that I know what I am doing with this business. One of the important parts of this plan was an explanation of how my business is different from other similar fragrance-oriented stores. This part is a lot like the question a potential employer might ask a job-seeker: "Why should we hire you? How are you different from the other 17 applicants for this job?" Especially if the landlord has leased space to other similar businesses that have not succeeded and maybe even broken a lease, he needs to be convinced that my situation and business is different.
Now that does not mean I won't fail for reasons out of my control; on the other hand, filling in the parts of the business plan that elucidate strengths, weaknesses, and challenges at least show this lessor that I have considered different scenarios and possibilities as well as solutions to the challenges that may face me. I do not plan on failing. I have faith that I offer a quality, affordable line of products. Unfortunately, business cannot run on faith alone, and so the planning part is critical to acknowledge.
Monday, February 15, 2010
Does walk by traffic count?
One of the things Don and I considered when we first looked at Firewheel Town Center was the "walk by traffic." As an open air mall, it's pretty cool that we can see cars drive by and folks going from one end of the mall to the other. I know that some things to consider before leasing commercial retail property include population, median income, cars that drive major roads by the business, and so on, but for us, we wanted to look at potential new customers. That does not mean we do not rely on our customers of long standing! They keep us afloat, but one of the main reasons we chose to move out of the flea market was because new customers were NOT coming in.
We moved into the store the week before Thanksgiving to give us a shot at Black Friday and the holiday buying season. Business was good, but what we wanted was a fair shake at people coming into the store, looking around, and even if not buying on the first trip in, having the potential for a return visit. What we have determined thus far is that we do not get that much walk in business. We are sandwiched between two major restaurants and a block from the AMC theatre and Dick's Sporting Goods, so people are on the way somewhere, and they do not walk in our door.
Why is that? A big reason could be that we do not yet have a giant sign on the building. The catch to that is we are only here temporarily--until we get a permanent store, we do not want to spend $2500-3500 (conservative estimate) for a sign when we would then have to pay to have it moved--and hope it fits the specs of the new building. So, I am trying to get the word out through this blog, through Facebook, through email, and through word of mouth.
We moved into the store the week before Thanksgiving to give us a shot at Black Friday and the holiday buying season. Business was good, but what we wanted was a fair shake at people coming into the store, looking around, and even if not buying on the first trip in, having the potential for a return visit. What we have determined thus far is that we do not get that much walk in business. We are sandwiched between two major restaurants and a block from the AMC theatre and Dick's Sporting Goods, so people are on the way somewhere, and they do not walk in our door.
Why is that? A big reason could be that we do not yet have a giant sign on the building. The catch to that is we are only here temporarily--until we get a permanent store, we do not want to spend $2500-3500 (conservative estimate) for a sign when we would then have to pay to have it moved--and hope it fits the specs of the new building. So, I am trying to get the word out through this blog, through Facebook, through email, and through word of mouth.
What to negotiate?
I want to keep on a little bit about this triple net. What confused me at first (and I looked at this several years ago) is why, in this terrible economy, commercial real estate folks are gutting the business owner--both large and small--by such methods. Well, it saves them money, trouble, and upkeep for their properties. Now a lessee could lease a property, sign all the appropriate documents, and promise to pay on time and take care of the "investment." What I have seen happen in my limited experience, however, is renters not paying (or paying late) and destroying the store either by ripping out appliances, built ins, and fixtures, or demolishing the insides altogether. I have also more recently seen store owners just up and leave--break the lease. I do not know legally what happens at that point, but it can't be good.
Just yesterday, one of the realtors I contacted about available stores here in Sachse contacted with with options smaller than she had already suggested (this is after I told her we were looking for under 1,000 sq. ft.). The two new spots are a little over what we asked about, so I inquired about price per sq. ft and triple net. Her response? She could be a used car salesman: "Tell me what monthly cost you have budgeted..." Really? I may be new at this, but even I know better than to answer THAT! So, onward and upward.
My question now is, what can I negotiate when I do get a contract for this new space at the mall? They are giving us leeway on several items per square foot, and I do not want to negate those things. However, I do not like an estimated cost for anything, because something like electricity can definitely fluctuate. For example, Don reads the electric meter daily and tracks usage and cost per day. In our current location, we have yet to see the meter, so we cannot track usage. This bothers us as three units are together and use, I think, the same transformer (both are large restaurants). Because Don and I are energy use conscious, we use compact florescent bulbs and are very conservative about turning breakers off if we are not using them. I do not want management to dictate what we pay unless I can see myself the numbers. Is this a negotiable item? Between that and common area maintenance (CAM), we will see. I still have research to do...
Just yesterday, one of the realtors I contacted about available stores here in Sachse contacted with with options smaller than she had already suggested (this is after I told her we were looking for under 1,000 sq. ft.). The two new spots are a little over what we asked about, so I inquired about price per sq. ft and triple net. Her response? She could be a used car salesman: "Tell me what monthly cost you have budgeted..." Really? I may be new at this, but even I know better than to answer THAT! So, onward and upward.
My question now is, what can I negotiate when I do get a contract for this new space at the mall? They are giving us leeway on several items per square foot, and I do not want to negate those things. However, I do not like an estimated cost for anything, because something like electricity can definitely fluctuate. For example, Don reads the electric meter daily and tracks usage and cost per day. In our current location, we have yet to see the meter, so we cannot track usage. This bothers us as three units are together and use, I think, the same transformer (both are large restaurants). Because Don and I are energy use conscious, we use compact florescent bulbs and are very conservative about turning breakers off if we are not using them. I do not want management to dictate what we pay unless I can see myself the numbers. Is this a negotiable item? Between that and common area maintenance (CAM), we will see. I still have research to do...
Sunday, February 14, 2010
Valentine's Day
Today is Valentine's Day, we have freezing fog blanketing the Sachse/Garland corridor, and my store is in an outdoor mall. Gotta love it. However, I am optimistic that we are a destination for everyone who loves not only great scents, but great prices as well.
I put in yesterday's numbers in the sales spread sheet Don made, keeping my eye on the daily sales number. I know the current number for our store is half of what we will need just to break even in the new location, so I get a little nervous. That brings up my education concerning triple net (or nnn). This is the jargon that means the lessee (me) pays the replacement cost insurance on the entire building, the property tax, and the maintenance on the store I choose to lease. If a store leases for $20/square foot, the next question I have to ask is how much the triple net is. You would think that this would be standard for a strip center, mall, or complex, but ohhhhh no. That would be too simple.
For example, in the mall where I am now, the nnn for the store we are considering is one price, while the other two proposals for the same mall, one street over, have two different nnn's. What this means in a nutshell is that as far as "ownership" goes, everything is our problem, but we don't own it. We will be paying twice (or more) of our home mortgage for a store that we are leasing. Of course we are there seven days a week, nine hours a day, so technically we are there more...Who thought of this plan???
I put in yesterday's numbers in the sales spread sheet Don made, keeping my eye on the daily sales number. I know the current number for our store is half of what we will need just to break even in the new location, so I get a little nervous. That brings up my education concerning triple net (or nnn). This is the jargon that means the lessee (me) pays the replacement cost insurance on the entire building, the property tax, and the maintenance on the store I choose to lease. If a store leases for $20/square foot, the next question I have to ask is how much the triple net is. You would think that this would be standard for a strip center, mall, or complex, but ohhhhh no. That would be too simple.
For example, in the mall where I am now, the nnn for the store we are considering is one price, while the other two proposals for the same mall, one street over, have two different nnn's. What this means in a nutshell is that as far as "ownership" goes, everything is our problem, but we don't own it. We will be paying twice (or more) of our home mortgage for a store that we are leasing. Of course we are there seven days a week, nine hours a day, so technically we are there more...Who thought of this plan???
Saturday, February 13, 2010
Learning about Business
Last week I started reading How to Succeed as a Small Business Owner...and Still Have a Life by Bill Collier. Let me reiterate: I am a teacher, not a business person. I am terrible at numbers, I have trouble organizing all the diverse products I carry, and I am taking baby steps learning the technology that will help me move into this virtual business world.
To that end, the first step was my husband patiently teaching me how to set up a spread sheet. This way, I am able to track daily, weekly, and monthly sales. I can see what my daily average is, and we can project what I need to make to make rent and bills. The problem right now is that the permanent space we are looking at is $1,000 more each month, so we also have to project future needs. Yikes! Now it starts getting scary.
Always before I had a full-time salary to bolster the whims of setting up a booth at the Denton Jazz Festival, the Muskoogee Castle, or Hawkwood's Fantasy Faire. Now, this is our way of life--let's see how it goes.
To that end, the first step was my husband patiently teaching me how to set up a spread sheet. This way, I am able to track daily, weekly, and monthly sales. I can see what my daily average is, and we can project what I need to make to make rent and bills. The problem right now is that the permanent space we are looking at is $1,000 more each month, so we also have to project future needs. Yikes! Now it starts getting scary.
Always before I had a full-time salary to bolster the whims of setting up a booth at the Denton Jazz Festival, the Muskoogee Castle, or Hawkwood's Fantasy Faire. Now, this is our way of life--let's see how it goes.
A New Life for an Old Business
Last week I watched Julie & Julia, a pretty good movie about how a cookbook and a chef changed the life of one person. The medium Julie used to chronicle her year of cooking Julia Childs' recipes, the blog, helped me understand the importance not only of putting my words down concretely, but also of taking my life one day at a time in order to find balance and truth in my choices. While, like Julie, I am not sure if anyone but me will read this, that is irrelevant.
What is my purpose? My purpose is to track my first year as a small business owner. Don't get me wrong--I have been in the "oil" business for over fifteen years, but always it was second banana to teaching. I worked full time as an English teacher and consultant, keeping the weekends to sell my wares at a local flea market. Although I retired in '05, I continued to work with at-risk students at the district alternative evening school. Then, with budget cuts all the rage, I found myself unemployed this past August. What to do? What to do? I spent the next several months weighing my options--the flea market was going downhill fast, and I would never build a new customer base. Thank heavens for our loyal customers of many years.
After looking at several options, my husband suggested I look into leasing a store at Firewheel Town Center, an outdoor mall in north Garland. I did not think we would have a chance, but to my surprise, they offered a deal we could not refuse, and we signed a temporary 6-month lease. We are halfway through that agreement and are working on a more permanent situation. Now I am getting nervous--a 2 year commitment means we have to look at other considerations.
That said, my secondary purpose is to put down my thoughts, my misconceptions, my insecurities about being an entrepreneur in a very unstable economy. What will happen? Can I generate enough new business--and keep my existing customer base--to really succeed? For the next year, I will follow Julie's model and keep an on-going journal about this adventure. Surely I will learn many lessons as I jump into the retail world with both feet.
What is my purpose? My purpose is to track my first year as a small business owner. Don't get me wrong--I have been in the "oil" business for over fifteen years, but always it was second banana to teaching. I worked full time as an English teacher and consultant, keeping the weekends to sell my wares at a local flea market. Although I retired in '05, I continued to work with at-risk students at the district alternative evening school. Then, with budget cuts all the rage, I found myself unemployed this past August. What to do? What to do? I spent the next several months weighing my options--the flea market was going downhill fast, and I would never build a new customer base. Thank heavens for our loyal customers of many years.
After looking at several options, my husband suggested I look into leasing a store at Firewheel Town Center, an outdoor mall in north Garland. I did not think we would have a chance, but to my surprise, they offered a deal we could not refuse, and we signed a temporary 6-month lease. We are halfway through that agreement and are working on a more permanent situation. Now I am getting nervous--a 2 year commitment means we have to look at other considerations.
That said, my secondary purpose is to put down my thoughts, my misconceptions, my insecurities about being an entrepreneur in a very unstable economy. What will happen? Can I generate enough new business--and keep my existing customer base--to really succeed? For the next year, I will follow Julie's model and keep an on-going journal about this adventure. Surely I will learn many lessons as I jump into the retail world with both feet.
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