I’m a simple business owner–nothing fancy here. I own a small card and gift shop in a small Florida town in a decent sized strip center near the heart of town. It’s a great location, near the tourist areas, decent anchor stores. It’s even a half-price card shop, so folks are getting a bargain in this market, which everyone is looking for. I have cut margin to the barest in an effort (perhaps a misspent effort) to provide my customers a good deal and viable options in todays killer economy while still trying to cover my own expenses. But I’m thinking about ending it all.
This store has been around awhile. It has serviced the people of this community well for nearly 20 years and is the only one of its’ kind in the county. Many of our customers are on a fixed income and live in the more settled area of town. The demographics are changing though, with more younger people moving in as the older folks move back to whereever it was that they came in order to spend their last time with family. Many didn’t go north this year due to the gas prices and many more are losing their homes and jobs and just trying to survive.
I am my only employee, except for my mother and husband who volunteer and help me out during emergencies, but it’s a 6-day-a-week thing for me. I feel as if I live here, and that everything else in my life is on hold. I have no insurance but what my spouse’s job provides, and during the summer months when many of my customers have gone north, it can be a real nail-biter if I don’t budget excruciatingly close.
I am far from alone. Many smaller businesses are hanging on just trying to get through the next few months, keep the lights on, the doors open for business. After all, many of the economists insist that our country has already turned the corner and hit its low. Pessimistically, I think not. Did I mention I’ve also worked in the petroleum, real estate and mortgage markets? The writing is on the wall and “bear” is a tough term for many of us to imagine. Bull, you say?
Recovery will be a long process, and I’m sad to think I might not be serving my customers for much longer, even though I’ve planned and budgeted for bad times. I can make it through but I can’t make extra money for my own everyday expenses. I didn’t get into the business so I would be poor or to make my own family suffer. I know there are no easy answers, but few customers in this neck of the woods want to spend on what they perceive is a luxury. Still, a card is minimalistic. It’s the gift margins that kill. And everyone has an opinion on it all. If I mark something up, I lose one segment of customer. If I mark something down, I lose another. The mix is confusing even on the best of days. Consignment margins are even tighter and although it means no direct overhead until a sale is completed, the product does take room that could be allocated to something with a better margin — if I could afford it.
I concentrated on keeping a specific price point after I took over the store, owing in part to the demographics. I cut back on buying from some vendors, opting instead to ebay after verifying costs per piece (yes, I figured shipping into the cost) and asking myself: Is it something I would buy NOW for someone I care about for their special occasion? I also want a quality product – who wants junk that will break in a days’ time? I have a fairly mainstream attitude, so am not purchasing knee-jerk products, or things that won’t have appeal to my demo’s. They just flat aren’t buying! Costs are up, sales are down. A saving grace for me are credit card purchases, which the previous owner did not have, and which has increased my average sale per customer. I’ve lost 200 customers comparing last May to this May, and another 200 for this June; again comparing against last June. It’s a good thing the average sale-per-customer is up!
I’m personable, honest, hard-working. People say they like me. Customers tell me how great the store is, how nice it looks, how much BETTER since I’ve taken it over. I work with my customers to answer their needs. I don’t give stock away, rarely do I use it for my self or family – and when I do, I’m careful to account for the stock removal and cost factors.
It honestly IS this dreary.
So, it raises many questions in my mind. Do I try to sell out and save my skin, or do I stick with it because the trend, according to the economists, is that we are turning the corner — and hope to hell it turns fast, before my wallet experiences that huge sucking sound caused by finance charges to prepurchased inventory and further dismal sales?
I am hurt in many ways, not just in my store. I commute a half an hour each way, which significantly increases my gas expenditures. We haven’t purchased a home yet and at almost 50 years of age, are living with my parents to help all of us out. Utilities have gone up for me also in the store. The landlord punched up the rent when I resigned the lease, although I did negotiate a smaller increase than he wanted (yay me!).
Customers, in general, are angry. They’ve gone to the grocer, and overspent. Same at the gas station and at home on their utilities. They still want some luxuries like their cell phones and HD/cable tv, but that’s an everyday expense now and it’s figured into the budget. They aren’t buying a card (printed in China) for their cousins or nieces or nephews or even friends as much as they were. They don’t want gifts from China, but they don’t want to pay for something “Made In America” or even made in their community. And on they complain. “It’s the war.” “It’s the President’s fault.” Even, “It’s your OWN fault.”
Big business is not willing to lower their costs: they might antagonize their shareholders! And so the little guy dies a little more each day. Mom and Pop stores will crop up, and then close. And crop up again, and close again. A few, very few select, will succeed in bridging the gap without selling their souls.
Frankly, I don’t want to close or sell. And I certainly don’t want to sell my soul to anyone or anything just to succeed. I like it just the way it is! Perhaps there is a business person out there with morals who can give a little guidance to a small chip like me so I can weather this front and see my way to the other side of the current depression. (There, I’ve said it!) Advertising? I’ve done what I can and I work as many of the free-ad angles as I can. Suggestions are certainly welcome!
In the meantime, I’m putting together the P&L and talking to a broker.
