The independent craft store owner is an interesting hybrid---the most successful are an equal mix of creativity and business savvy. Unfortunately, those attributes are not always a natural fit in a single brain. Some lucky "right brain/creative" retailers hook up with a "left brain/logical" business partner, but that is not always the case. Most retail craft store owners are heavy on the creativity and light on the business process. Think about it.....why did you go into business? If you are like me, it was your love of a particular craft that paved the way. I found my zen when weaving tiny little seed beads into larger tapestries. Unfortunately, I could not find supplies locally and the internet was not yet a viable source for supplies. I needed access to beading materials and I wanted to spread the joy of beading.
I had a husband who could afford to get me started and so I set up shop with some friends. It worked...for a while. Competition was minimal and beading was just starting to become the "big thing." It wasn't hard to keep the rent paid, we just needed to have stock on the shelves and smiles on our faces. We priced product by instinct and kept only the inventory that appealed to us. The system worked...for a while. Unfortunately, competitors started to pop up as the bead craze blossomed. The internet retailer became a viable threat. One of my partners left. My kids missed me. I was guilt ridden all of the time. Yup....It worked until it started to seem less like a hobby and more like, well, .... WORK! The naivete of those years is embarrassing to contemplate in retrospect. There was not much pressure on me to make the store profitable. Rather, it was more critical that I simply not lose too much money because then my husband would find it less tolerable. How is that for a business model?
I am willing to bet that many of you recognize that silly store owner. She is the competitor who can sell crystal for less than cost because profit is irrelevant. She is the Yarn Shop Nazi who doesn't respond well to pierced and tattooed shoppers (NO YARN FOR YOU!). She is the needle art store owner who refuses to respond to industry craft trends because she only cares about traditional cross stitch. Be honest....she might even be YOU! The sagging economy and rise in internet competition will make your accountant, your banker and even the most tolerant of husbands, demand a less pitiful bottom line. We know that you love your craft, but are you ready to make the leap into world of responsible business ownership?
There comes a point in every business owner's life where you must have a little "come to religion" meeting with yourself. Excuses don't pay the rent. You are either going to make the changes necessary to succeed or you are going to fail. It is not surprising to learn that many independent craft stores close after the honeymoon phase. Retail is hard work and sometimes the juice ain't worth the squeeze.
What is the crafty retailer to do?
LEARN THE BUSINESS OF BUSINESS! My first step was to read everything I could find on running a business. I have recommended it before and will do so again...Read The E-Myth ReVisited by Michael Gerber. He succinctly identifies the pitfalls that many small business owners fall prey to and offers tangible advice to improve the status quo. I have an extra copy on my book shelf and will send it to the person who makes the most entertaining case for a need for change. Another great resource is The Big Book of Small Business by Tom Gegax.
FIND A MENTOR! Nothing succeeds like success and there is no need to reinvent the wheel. Is there a retail store in your area (but outside of your genre) that is an "it" store? You know the one I mean....the owner has great shop displays, incredible marketing savvy, etc. Invite her to lunch! Most human beings like to feel needed and are willing to lend an ear and a hand to share their expertise. Join a networking club and learn from other business owners.
TAKE THE EMOTION OUT OF IT! Most specialty craft stores are owned by women. Many women have a hard time removing the emotional quotient from the business. Our need to please and to be liked can lead to foolish business decisions. We keep mediocre employees because we cannot bring ourselves to fire them and lack the assertiveness to train them properly. We reduce prices beyond the point that is reasonable because we are afraid to lose a customer. The result is a client base that is loyal only to price and a profit margin that cannot sustain us. We become so attached to our inventory that we refuse to dump the duds because we hope that someone will buy it someday. My very favorite customer confessed to having 5 year old product on the shelf. Ouch.
EMBRACE THE CONCEPT OF THE PROCESS. The personal change that made the biggest impact in my business was my reluctant recognition of the need for a system of fixed processes in my business. A store that operates without fixed processes creates an environment of instability and disorder. Legendary marketing guru Theodore Levitt aptly stated that "Discretion is the enemy of order, standardization, and quality." The younger me often did what was expedient rather than what was right for the business. I made decisions by the seat of my pants, often contradicting a previous decision, and confusing employees. I took bookkeeping shortcuts that cost me thousands of dollars to untangle later because I was too busy to do it right the first time. I hired inept employees because I needed a warm body and then was too wimpy to fire them when it was clearly not a good fit.
PROMOTE, PROMOTE, PROMOTE! Get out your marketing calendar and plan the promotions for the third and fourth quarters! Challenge yourself to come up with something that does NOT include a huge price reduction. There is no need to give away profits. Be creative and inventive. I recently spoke to a long time customer who told me about an amazing promotion at her store. Debbie Huntoon operates Alada Beads in Clinton Township, Michigan. Michigan has been one of the hardest hit states economically, with unemployment numbers well above the national average, and yet Debbie continues to thrive.
Debbie and her daughters take the business of business very seriously and it shows. She has made the decision to host one major event and two to three minor promotional events each month and is reaping the rewards. She recently hosted a "Mystic Party" which included palm readers, a wine tasting, several "make and take stations", and a food vendor. Debbie took a gamble by making a big investment in radio promotions while hoping for an equally big return on her investment. She needn't have worried! She had to pull the ads after only a few days because such a buzz was created that she worried about her ability to handle the crowd. 300 customers reserved a spot for the event and all of the vendors agreed to participate for free, knowing that the radio spot would generate enough publicity to more than compensate for their time.
Guests were lined up for the event, which lasted for only three hours and generated $10,000 in sales. She took lots of photographs and posted them on her store Facebook, which has continued to generate excitement and interest. What does beading have to do with palm reading? Not much, but this Crafty Retailer knows that a successful promotion is more about THRILLING THE CUSTOMER than showcasing the product. Congratulations on a job well done, Debbie!
5 months ago