Going Out Of Business? Let's Throw In The Towel.

Never Stop Promoting Your Business

I had a business friend recently tell me that writing a business plan was too much work.  I am serious.  He described to me why he does not waste his time trying to come up with ideas and systems for deciding what his business should do.  At least not in that way.  He said he finds it is a lot more efficient to do the right stuff he needs to do when that right stuff comes up.  We talked for a short while.  He continued to talk about some of the problems he has experienced in recent years with his family and business.  He described how anxious he was about getting to retirement so he could call it quits.  I had not seen him for about ten years or so.  He has a small sporting goods store.  It currently has a going out of business sign pasted all over its store front windows.  I was very confused about the conversation.  Maybe we should just throw in the towel?

I decided to ask him if he needed help in writing a new plan.  The above was his answer.  He described to me why he does not waste his time trying to come up with ideas and systems for deciding what his business should do.  At least not in that way.

Apparently he is going to try to do some other business.  He described it to me a little bit.  I could not see its future so I lost interest in the conversation.  His current sporting goods store has struggled for several years.  He had a business partner in that model who was the founder and original owner of that business.  They were lifelong friends.  They had a good working plan for many years.  Somewhere along the way they got lost.  I noticed how much energy and excitement that business model used to produce many years ago.  It was filled with young customers and families roaming about in the store.  The store was always fashionable, exciting and a central part of the community activities that drove outdoor sports.  Snow skiing, water skiing, white water rafting, mountain climbing, snow boarding, windsurfing, skateboarding and trail hiking were major categories of huge interest to this business.  They used to schedule community bus trips to the regional mountain ski slopes every Saturday during the snow season.  They sponsored the high school ski teams and instructed the ski team students.  Some of their past students were state competitors with two becoming winners of state championships.  They used to manage a white water rafting trip every weekend down a class of good rivers during the late spring and summer months.  My wife and I have taken that trip a few times with them.  We have some great memories that came from a couple of those trips.  I remember how the food break for lunch was always classy!  They pulled out the stuff to set it up and it was always like a fancy dinning experience on the shores out in the middle of nowhere next to the rushing waters of the river nearby.  I remember the lunches!

I remember shopping for school bags for all of my three girls because this was "the place" to go for that kind of return back to school shopping.  All of the kids at school wanted bags from this sporting goods store.  If you raise children, back to school fashion is very important.  This was the place to fit that bill correctly.  This sporting goods store used to carry some great looking specialty shoes in its separate fashion-conscious clothing department.  This is where all of the 'happening stuff' was offered.  I remember going into this store to visit with my business owner friends when they were so busy employing several floor staff members.  One employee would be back in the office doing the books.  She would be receiving the products, posting the invoices, printing the sale labels and charting the expenses, payroll and accounting.  She worked for these guys for almost 25 years.  I remember how some of their prime youth customers who were the most active sports enthusiasts became their part time employees helping these two owners develop their growing business model.  Some of their best skateboarders, skiers and mountain climbers worked part time on the showroom floor of the store.  They tagged the new merchandise, displayed it and wore it to show how it appeared.  They waxed the customers boards, did the routine repairs in the product shop and provided the customization each customer requested.  It used to be a 'happening' place.

Sometimes when I would stop by to visit my friends, who owned the business, they were jammed busy with all of the direction work they were spinning to get done.  There was very little quiet time in that shop.  The phone was always ringing to handle the many things that were scheduled, ordered, shipped, returned, and managed.  Ski events needed managed.  Bus trips were always happening.  Lessons classes were being filled.  Training team sports were being organized.  Meetings were being scheduled and produced.  They even used to manage a quarterly sports fashion show.  This shop was busy.  The owners were able to fill their days with plenty of work.  My visiting time was limited.

One of the activities we shared was golf.  Every once in awhile the owners and I would go out to shoot a round of golf.  We had some great fun.  They actually played some pretty good golf.  I was not as particular about my choice of clubs on every shot.  However, they always scored better than I.  We had a lot of fun chatting about life and business on those days.  One thing is for sure, the founder was the one with the business mind.  He was the one who would actually write the business plan.  He was the one who would come up with the many ideas.  He was the one who never got excited about what was going wrong.  He was the one with the most pleasing personality.  He was the one who prepared the best meals on the white water rafting trips.  When you went with the boss, you got first class treatment...always.  The truth, he is the one who built up this model to become the hot and happening place it eventually grew to become.  The founder had the right kind of dream, vision and drive.  His chosen partner was the mechanical side.

Every business needs a solid promoter.  Small business is all about promote, promote and promote.  If you have one of these people on board, good for you.  If you do not have one of these people on board, go find one.  They will be worth their weight in gold.  On the other hand, every business needs someone who stays firmly placed next to the disciplines of the mechanical side.  Someone needs to make certain all of the products get properly tagged before they reach the sales display floor...no exceptions.  Good tracking, good inventory controls, good recordings and excellent books.  The backside of the business needs to run perfectly.  Every possible discount must be realized.  None will ever get by a great back office leader.  The founders partner was that guy.  They were a good team.  They had a great business model.

Now the sign on the storefront says going out of business!  What happened?  As you might guess, when I bumped into the partner of that model he described how the economy finally took him down.  He bought out the founder several years ago.  The founder retired in another city far away.  The founder was also smart enough to make his partner use a real bank to buy him out.  The founder did not carry the papers of the business sale to his partner so he will not need to deal with the residual costs of this model going out of business.  I always thought of him as a smart guy.  Now I know he is a smart guy.  Take a major tip here owners!  Sell it clean if you sell it.  Otherwise, you might get it all back very broken.  Just a tip.

Here's what happened.

Do Not Stop To Wait For Customers To Show Up

The partner never liked doing the ski team stuff.  He hated losing his weekend time by arranging all of the community events this sporting goods store used to sponsor.  Instead, the partner loved to sail his boat on the neighboring river.  He would take his family out every single good weather weekend.  He quit playing golf because it took too much time away from the sailing he loved to do.  He turned over the product buying responsibilities to his long time bookkeeper.  She is the same one who could always be found in the back office posting numbers, invoices, payments, and books like mad.  Now she is the product buyer?

The store eventually quit the sporting event bus trips they used to perform on every possible weekend.  The partner said it was too much work.  He claimed it was never worth the money they spent on the cost of producing each weekend trip.  I immediately thought about how many baby chicks I have sold for a small loss when I managed a farm store.  I would pay a buck seventy for the baby chicks to arrive.  Then I would employ a person to care for them all day long, feeding and watering.  Then we would package them up for customers to carry out in boxes that cost about a buck twenty five each.  We used to sell thousands of these baby chicks at a loss of about fifty cents each.  It was never worth it.  Then the owners of those growing chicks would come back to the farm store to buy fifteen dollar bags of chicken feed at seven dollars a pop in gross profit.  All of the sudden, spotting fifty cents did not look so bad.  The best part of this deal was when we sold those baby chicks to the people who would never ever buy one until their children came into the shop with their parents and watched our employee taking care of them.  Their parents came into our farm store to get our lost leader priced dog food on sale!  They left the store with a two dollar baby chick!  Sometimes the bus trip to the mountain will cost more to arrange than what the revenues on that trip can provide.  However, without that routine offer some non-skiers may never take up the sport.   Those non-skiers may never need to pay for new lessons.  Those non-skiers may never need to buy skiing equipment.  Their kids may never urge their parents to buy school bags each year before the new year begins!  It all fits nicely if you do not get too analogical about what it costs.  The partner changed the way each activity center was designed.  Each one had to support itself or go away.  Ten years later...he is placing new signs on the front windows of the business he bought from the founder who built it.  Those signs read, "Going Out Of Business."  The once happening place no longer is.

No more white water rafting trips.  No more expensive lunch treats and amenities coming along with that trip.  No more special bus rides.  No more ski team teaching.  No more really funky shoe department.  No more promotional lost leaders to add to our memory banks.  No more great weekend sales that are dovetailed with new and exciting community sporting events.  No more camping and hiking trail products.  They never sold very well, he said.  No more going back to school fashion shows.  They took too much time.  They were very difficult to schedule and manage.  No sign of any mountain climbing stuff to speak of remaining in the store, even though many recreation spots now have mountain climbing activities in the middle of the mall.  As this activity became more popular, he quit offering it inside his model.  He is exactly correct, the economy is sour.

This business model does not work like it used to.  The people do not come in droves like they used to come in.  They do not come in to buy all of this stuff anymore.  There is no longer the activity board next to the sales counter.  No extra events are flowing around this business model anymore.  The high flow of continual energy that once was part of this growing and happening business model is now gone.  So are the customers.  The founder knew how to generate added interest inside the model he developed.  He was never the kind of business owner who would sit back in his office and wait for the next customer to find his door.  He certainly would not excuse himself away from the weekend work his customers would enjoy when he played along side of them with the activities they enjoyed.  Sporting stuff does not happen on weekdays.  Customers are either at school or work during the week.  The founder would take Tuesday and Wednesdays off to go golfing and skiing.  He was not needed in the store he owned on those particular days.  He was always open for sporting activities every single Saturday and Sunday, when he was in charge.  When the partner took over the operations, he closed early on Saturdays and never open on Sunday.  He failed to recognize the minimum rule of business, "Shoot when the ducks are flying!"

If you are blaming your lack of traffic flow, maybe you are not doing the right kinds of things.  If you do not want to work too hard, maybe you should go become an employee somewhere else.  If you do not want to take more risks, maybe ownership is not your thing.  If you do not believe that planning, scheduling, studying or developing creative ideas is not worthwhile to do for profit production, by all means...go make a going out of business sign.  Most of all, if you actually believe your accountant bookkeeper is the best person to use to select your future product mix and offerings...go ahead...save time and a buck appointing her to be in charge of your fashion presentation.  No offense to her, she does great books!  I see what she wears to work.  It does not look anything close to what those young kids like to wear!  In fact, I do not believe the bookkeeper ever bought any clothing at this sporting goods store, ever!  Why in goods name would you elect her to go become your clothing buyer?

No customers.  Wow.  What a terrible economy!

I repeat...as I started this post...I had a business friend recently tell me that writing a business plan was too much work.  I am serious.  He described to me why he does not waste his time trying to come up with ideas and systems for deciding what his business should do.  At least not in that way.  That is what he said.

Let's throw in the towel.  The economy is obviously too tough to mange, in our own way!  Why bother with it?

Until next time...