Cathe,
I’ve made some comments and given you a true story. Now pay
attention to everything Judy Hoch wrote! Especially the part about
the seller having “skin in the game for a long time.” Have you
noticed that nearly every posting on this topic has been full of
cautions and hard-learned, expensive lessons??
Judy in Kansas
Hi Cathe,
It is a real bummer to work 60 to 80 hours a week just to make the basic bills and the interest payment...
I hope this is what you’re looking for in your life! Owning a
business is a great opportunity for many (it’s essentially what many
on this list are doing including me, though not retail). I
second/tenth all the audits/ contracts advice, and smiled at the 6
types of insurance comment as I was just chatting someone whose
policy won’t even let her prop her door open, so before she got her
A/C recently she was physically standing in her doorway for
ventilation during a recent heat wave :-).
Two things you might want to try, and then a bit about small
business in general…
First, a time honored tradition in market research is called
“mystery shopping.” It consists of having people go into a
store/restaurant and play customer, either just presale or the full
purchase experience and then provide a detailed report of the
experience. Given you’re talking about investing in accountants/
attorneys and then staking your house, I’d say it’s worth sending in
a friend or three who this person doesn’t know you’re connected to,
even if you have to stake one to buy something. Better yet, if this
is a place you plan to own, if anyone you know plans to buy jewelry
for a holiday gift, you should feel comfortable sending them here to
shop. I’d have at least one just browse, and another do a purchase
and return at different times. You want them to be “average” and
natural, not difficult, but spend some time browsing and go when the
store is busier rather than empty so they can peek at interactions
with other customers. What to watch for:
a) Ease of finding store (signage, map on website, hours, etc.)
b) Appearance, exterior and interior relative to others in
neighborhood, expectations from brand image, jewelers in region
overall, and inventory
c) Wait for service for selves and any others in store, # people in
store, time of visit, time spent in store, etc.
d) # staff, courtesy, knowledge, helpfulness, any differentiation in
how they handled folks based on age/gender/race/couples/apparent
affluence
e) Pricing, variety and perceived quality of goods as suits brand
and region, value, etc.
f) Signs of the store having hard times: Physical wear in the store
fixtures, empty spots in cases, being seriously short staffed, out
of date letterhead… Hard or grasping sells such as verbal
discounts/price negotiation or throwing just about every item at them
to prevent walking out empty handed. Aggressive upsell 2-for-1 style
promos, coupons, or extensive clearance sections. Prominently posted
no return policies or resistance at an attempted return… Indiscreet
comments or just plain old instinct…
I’d prep them on everything except the differentiation in (d) and
all of (f), both of which could prejudice their observation. Those
you can pull from them in a verbal de-brief–maybe meet with them for
lunch/ dinner for thanks right after. If possible, try to send folks
you haven’t talked to about this dream opportunity, but who are
instead neutral/ uninformed about the store.
Second, if you’ve never run a small service business (which this
largely is despite the inventory), is it possible for you to shadow
the owner for several days/ evenings/ a weekend to see what a day in
the life really is? This isn’t for the same purpose as the mystery
shopping, though even with the staff knowing you’re there watching
you’ll get a hint of “normal,” interactions, it’s more for what
follows.
Even if you’re doing better than the breaking even Dave mentions (and
you can do worse as well so I hope that 2nd isn’t to 100% of your
assets), most small business owners still put in 60-80. The good and
bad of a being your own boss is the buck will always stop with
you–ever notice the owner is always hanging around your favorite
restaurant? Beyond the raw hours, you can never “leave it at the
office,” and neither can your spouse. A lot of my clients are also
independent consultants, and I know a few of them have their spouses
doing their bookkeeping and I suspect pitching in elseways, but even
if they don’t put hours in, the business will always be part of your
relationship. I don’t know how readily available or reliable current
stats are, or if you know any marriage counselors/ divorce attorneys
to ask, but starting a business is one of the more common causes of
relationship stress and strife. I spent 15 years working for my
father, and still have a contracting relationship with his firm.
There’s a whole slew of common family business dynamics, and I felt
a bit like I was filling out a checklist when my work history came up
with my ADD therapist (I did last 15 years after all ;-). Believe
me, I’d never have carried a server pager 24/7/365 for several years
straight for anyone but family.
Related to those 60-80 hours, do you really know what they’ll
consist of? 99% of people coming out of wage/ salaried
positions–even in relatively small companies–end up with a crash
course in 1,000 tasks ranging from operations to HR to customer
service to marketing to Web design. It’s not just the tasks you know
you’re unskilled in, many you may never even realized existed. For
example:
a) If you didn’t read the “Dealing with a customer of a broken
necklace” thread ~11/10, definitely check out the range of
perspectives. Customer service is both an instinct and skill, as well
as an area where written policies are periodically updated and
case-by-case exceptions made.
b) Accounting is far less cut and dried than many people think. In
my MBA classes I was entertained watching the programmers’ brains try
to wrap around the notion that–especially on the day-to-day
cost/managerial side-- it can be very arbitrary, rather than a hard
set of rules/policies.
c) HR law, payroll, and healthcare alone are complicated, expensive,
potential legal landmines, and simply no fun (for most humans). So
if you can find an equivalent to these folks in your state, that
alone would be a huge asset (I worked with them for many years, so
I’d also take any recommendation they provided):
And as the owner, it’s a constant trade-off between DIY which takes
time to learn and may compromise quality, and using cash you’ll
want/need to elsewhere to get an expert. Sometimes, even learning
enough to hire an expert can take more time or knowledge than you
have available–even me with two business degrees ended up with
accountant v2.0 after the first turned out to be a flake who
interviewed well. But if you always learn from what you did, don’t
beat yourself up too much or over-extend, then you come out ahead in
the long run.
Best of luck whichever way your path goes!
Cheers,
Ann Ray