Fighting the Big Boxes

Some one pointed me to this video today and I thought I’d share it with you along with a few thoughts. The film isn’t new. It’s been around for a few years. But it’s worth watching if you haven’t seen it before.

Independent America

Independent America

One thing that concerns me a bit is the lumping of big-box stores and franchised fast-food places together. The 3/50 Project which MTS has supported almost since the very beginning does this too. If my neighbor owns the local McDonald’s franchise, I don’t see why I should boycott Big Macs. Granted, some of the restaurant’s revenue goes to McDonald’s corporate, but the bulk of it stays right here. That’s a far cry from he huge share of revenue from the local Wally World that ends up in Bentonville, AR.

The other thing that disturbs me a little is the tendency to bash the big boxes rather than pumping up the local merchants. It reminds me of walking through the woods. If you don’t watch where you’re going and you step on a snake, there’s a good chance the snake will bite you. If it happens, don’t blame the snake. He’s just doing what snakes do. Same for the boxes stores. They’re the most predictable of competitors. They’re going to do what they always do. Don’t play into their hands.

I’ve covered this before, but it bears repeating. Don’t try to compete with the chain stores on price. You can’t win! With their deep pockets they can lose money for a while, just long enough to put you out of business. Avoid going head-to-head. Find your niche and stick to it.

Most important of all, rather than fighting to keep a national chain out of your market, fight to keep your local government from subsidizing the big box with your tax money. There are enough small-town and even big city governments desperate for tax revenue that they’ll do whatever it takes to get the chain to locate within their boundaries. They do this by direct tax breaks and by indirect tax breaks. (We’ll widen the street and put in traffic lights at city expense.) As a taxpayer, scream bloody murder about this nonsense. Using your tax money as an incentive to bring a competitor into your marketplace should be cause to terminate the local government at the next election.

To me, there’s nothing quite as ridiculous as a local government who whines about the deteriorating downtown area while they pump your tax dollars into an infrastructure that encourages people and businesses to move to the outskirts of town.

Finally, adopt the “serenity prayer.”

“Lord, grant me the serenity to accept the things I can’t change, the courage to change the things I can change, and the wisdom to know the difference.”

The Marts and the Depots aren’t going away anytime soon.  Remember that every one of them started out with one store, just like you did.  What can you learn from them?  Study their operations.  Read anything you can find about their operations.  Then, do it better than they do.

They have greeters.  At your store make sure they’re greeted by the owner.

They have a liberal return policy.  If you have a sign that says “no refunds” or something like that, get rid of it!   Offer loaner programs.  Make sure your vendors back you up as well as they do the chains.

They have convenient hours.  Most likely you can’t afford to be open 24/7, but you do have to be there when they need you.

You have a number of advantages over the national chains.  Find out what they are and use them to your advantage.

April 15-The Real April Fool’s Day?

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Here in the heartland of America it’s a beautiful day.  As I sit here in my palatial office (actually a spare bedroom) I can hear the birds singing and almost hear the buds popping open on the trees.  All is well!

OK, maybe all isn’t well.  It’s April 15, sort of like April Fool’s Day on steroids.  As I prepare to send off a five figure check to the IRS, the beauty of the day seems to dim a little.  Maybe the birds aren’t singing.  Maybe they’re laughing at me.  It’s hard to say.

I don’t mind paying my fair share, I really don’t.  But my fair share was withheld from my IRA distributions throughout the year.  Yet, I still owe almost twenty grand because someone at my former employer didn’t feel the need to inform me that there would be a huge tax liability at the end of the year.  “Oops.  Sorry.”

It’s quite a hit for someone who didn’t actually earn a dime in 2009.

Then there’s my second son.  He owes $1,000.00.  That may not seem like a lot to you and me, but this young man made less in 2009, working two jobs, than I paid in taxes.  Like his old man, his tax liability is the result of someone at one of his employers dropping the ball.  In spite of his several requests, they failed to withhold taxes from his salary.  “Oops”, again.

I know many of you have similar nightmares and I guess having a blog gives me the opportunity to rant once in a while.  Here’s the thing, $1 billion of the “stimulus” money is going to hire thousands of new IRS agents.  Why?  Because a lot of us have had it up to here with a government that thinks our hard-earned money is somehow their money.  Because all of us, especially small business owners, feel like we contribute more than enough to Washington, our state capitals, counties, and municipalities.  Face it, most of us don’t trust the government.  By hiring thousands of additional IRS agents, the feds are making it painfully obvious that they don’t trust us either.

We’re shocked that the word “million” seems to have almost vanished from the national vocabulary to be replace by the word “billion” (1,000,000,000).  [Note:  “Millions” of Americans are out of work.  That seems to be the only place the “M word is still in wide usage.] Trillion (1,000,000,000,000), a number so big that most Americans can’t even comprehend it, is thrown around ever so casually by a government that acts like there is no limit to what you and I can be forced to pay.

I don’t mean to get all political on a business blog, but whatever we contribute to the government is money that we can’t use to build up our businesses.  And if we can’t build up our businesses, where are we going to find jobs for the millions of our friends and neighbors who are out of work?  Besides, this isn’t a liberal or conservative issue.  Both sides treat our paychecks like Monopoly money.

But, take heart, Tax Freedom Day occurs at about the same time as Tax Filing Day.  That means that everything you’ve made so far this year will go to pay the various taxes but what you make from now until the end of the year is yours.

Is it a coincidence that our tax day falls on the anniversary of the sinking of the Titanic?  I don’t think so.

More “Undercover Boss”

After yesterday’s post I watched another episode of “Undercover Boss”, this one featuring Coby Brooks, President and CEO of Hooters.  As you might imagine, Brooks finds both good and bad in his company and gets a hard time from some folks on the street who don’t appreciate the Hooters concept.

I’m no prude and I’ve enjoyed wings and beer at a couple of the Hooters locations (including one that’s featured on the program) but it is a little difficult to reconcile the company’s public profile with some of Brooks’ comments during the show.  He says he’d have no problem with his daughters joining the family business and that everything about the chain is wholesome and family-friendly, but early in the show one of the company’s ads flashes by on the screen:  “Hooters-More than a Mouthful”.

Be that as it may,the most telling episode in the show is probably when Brooks visits the company’s manufacturing plant (They make their own wing sauces and dressings.) in Atlanta.  The corporate office is also located in the Georgia city.

First, he says that morale in the factory was high when Dad was still alive (he died in 2006).  The elder Brooks would often visit the plant and talk to the people.  The current CEO admits that he hasn’t been in the plant since he was a teenager.  Don’t forget that the plant and the corporate office are in the same city and that Robert Brooks has been gone for four years!  Patti, the Business Manager at the plant tells Brooks that she has some concerns about morale.

The real enlightenment comes when Brooks asks one of the employees about the owner.  To make a long story short he says that the elder Brooks was a great guy and everybody loved working for him.  When our hero asks “What about the son?” what he hears is far from complimentary.

Of course, there is a happy ending with the newly enlightened CEO promising to do better.

Here’s the thing, this isn’t that unusual a story.  Almost without exception second-generation ownership is never like the first and third-generation owners are even less effective.  The founder had a dream and it was the focus of everything he did.  Charter employees shared in the dream and gave 110% to help achieve it.  It was usually a win-win for everyone.

Generation II comes along.  They knew about Dad’s (or Mom’s) dream but chances are that the business was already successful by the time they were old enough to really understand what was going on.  They’ve always enjoyed the fruits of the successful company but never experienced the struggles it took to get there.  Generation III has grown up around a successful business and have little or no idea of what it took to get there.

Coby Brooks didn’t aspire to join the family business so maybe we can give him a bit of a pass, but it took him four years to find his way to the factory.  No wonder the workers have no loyalty to him!

But he seems like a sincere enough guy, at least as sincere as you can be running a chain of restaurants named after a female body part.  Hopefully for his sake, he learned some valuable lessons.

Postscript:  According to several sources, the chain is for sale.   One reason given is “sagging sales”.

Silver Dollar City Grand Opening AdAnother Postscript:  This weekend’s episode of Undercover Boss will feature Herschend Family Entertainment, one of my favorite companies.  The Herschend family literally started with  nothing but a hole in the ground 50 years ago this year and now owns and operates theme parks and other entertainment properties all over the Midwest and Southeast.  If you watch you’ll see an organization that’s about as much opposite of Hooters as a company could possibly be.  It airs on CBS Sunday evening.  Don’t miss it if you can.

Undercover Boss; “must see TV”

I just finished watching an episode of Undercover Boss, a new series on CBS.  The premise is simple.  CEO’s go undercover to do the front line work of the companies they run.  The episode I just watched featured Dave Rife, the owner and CEO of White Castle.

Rife, and the other CEOs that have been featured learn very quickly that it ain’t as easy as it looks.  Leaving a trail of slider destruction in his wake, he (and the viewers) see that the job of making the little hamburgers requires a lot of hard work by a lot of people and that things don’t always go as planned.

Every episode that I’ve seen ends with the boss developing a whole new respect for the people who do the actual work.  I wish every CEO in America would watch this show and learn some valuable lessons.  But even if you only have employee, there are some good lessons to be learned.

The show airs on Sunday evenings on CBS and you can watch past episodes at the CBS web site.

Isn’t That Special?

According to the AP, Fidel Castro is praising the new US health care plan.  In that case, I guess it must be OK!  http://tinyurl.com/yhued88

Happy Saint Patrick’s Day

Gosh, I can’t believe it’s been so long since the last post!  Mea culpa!

I’ve been wrestling with some personal things and I know that I’ve been remiss in my duty as your favorite blogger.  But a whole month!  I’m shocked and embarrassed.  While it’s sometimes difficult to write every day,  you deserve more and I apologize.

On a happier note, Happy Saint Patrick’s Day! When I see the crowds who attended the big parade this past Saturday and the throngs of people gathering today at their favorite watering holes, I realize that people are still spending money.  One out of ten Americans may be out of a job (Personally I think it’s more than that.) but that means that the vast majority of us are receiving some kind of paycheck.

The trick is to offer them something of value, something they really want or need, and getting them to buy from you.  Of course that’s easier said than done, but I know you can do it.  Think of the story of today’s patron saint.  Born in England, he became a slave in Ireland, escaped and returned to England.

He returned to Ireland which was essentially a pagan land and converted thousands to Christianity.  He must have been some salesman!  If this former slave was able to convince the Irish to convert, how much easier is it for you to sell your product to your potential customers?

So, as we celebrate the famous Irish saint,  why not think of him as an inspiration as you go about your daily business?

Meanwhile, have a happy Saint Patrick’s day and celebrate responsibly.

Business Building Lessons

Thanks to Sandy Berkshire of Stuart’s House of Vacuums, Billings, MT for pointing out the following article.

Consultant Stacy Karacostas has written an excellent article called “Business-Building Lessons Learned in 2009: What Highly-Successful Small Business Owners Are Doing that You Can Do Too”. The title’s a mouthful but the article offers some very good advice on surviving and even thriving in our current economy.

The article promises ten things that successful entrepreneurs are doing but delivers only nine.  I guess that’s further evidence that the economy’s a mess.  Maybe the government’s imposed a 10% tax on internet lists.  Yeah, I’ll bet that’s it.

Anyway, I encourage you to read the article for the details, but here are the bullet points with some added commentary from yours truly.

1.  Forget about the state of the economy. I’m not sure you can entirely forget it, but don’t dwell on it, especially the emotional, mental part.  You have to look and act successful to be successful.

2.  Offer something new. People need something exciting in their lives.  Make your business exciting by adding new products, or just remerchandising your product line-up.

3.  Stop guessing. Ask your customers what they want.  Then give it to them.

4.  Embrace technology. More on this later.

5.  Build your list.  Use your customer list to build up your business.

6.  Provide value. I would add to this one, let your customers know about the value you provide.  Don’t be afraid to blow your own horn.

7.  Embrace mixed media marketing.  You can’t build a house with just one tool.  Use the whole box!

8.  Keep learning. Your customers are getting smarter every day.

9.  Stop doing it all yourself. If you haven’t already, read Michael Gerber’s “The E Myth Revisited.  If you’ve already read it, read it again.  Focus your efforts on what only you can do.

I’ve highlighted numbers 3, 4, 7, and 8 to create  MTS’s number 10.   Get out there! Get online.  Get on Facebook.  Get on LinkedIn.  Use all the tools at your disposal to find out what your customers want (3).  Use Facebook, or the brand-new Google Buzz to create a community of people who are interested in what you sell and then talk and listen to them every single day (4, 7,8).

You hope your customers are talking about you in a positive way.  If so, they’re probably doing it through social media.  If they’re talking about you in negative terms, they’re using the same social media.  Either way, you must be part of that conversation.  (See Retailers, What to do About the Internet.)

I guess I’ll add a number 11 and a number 12.

11.  Under promise and over deliver.  Nuff said.

12.  Keep on keeping on.  If you’ve been watching the Olympics you’ve seen stories about athletes who keep coming back even though they’ve failed many times in the past.  It’s called persistence and it’s the difference between a gold medal and a long, lonely trip back home.

Seasonal Marketing

We all know that the weeks before Christmas are the busiest shopping days of the year.  Other holidays, real (Easter) and manufactured (Valentine’s Day) can bring out the shoppers as well.  But, what can we do to stimulate the shopping gene in those times between major holidays?

Why not have some fun with the more obscure festivities like National Embroidery Month or National Snack Food Month  (February) or Random Acts of Kindness Day (February 17).  To get you started, here’s a web site that lists all variety of occasions, both monthly and daily.  Add a little imagination and you can liven up the last week of February with a big Polar Bear Sale (February 27th).

These off-the-wall celebrations can be a lot of fun and you have little or no competition.

Retailers, What to do about the Internet?

I’ve been following a conversation on another forum that was started with my recent post, “Are Your Suppliers Letting You Down on the Web?”  You may recall that the original article was about manufacturers who don’t use the web effectively to communicate with their dealers.  Like most on-line conversations, this one has morphed into a discussion on how independent retailers and manufacturers should handle Internet sales to consumers.

We know that there are price-only shoppers who will come into your store, get all the information they need, then go to the web to buy the item at the lowest price they can find.  On the other hand, there are customers who do their research on the web then buy the item locally.  The question is, which group is bigger?  My guess, and it’s only a guess, is that more consumers fall into the second group.

Maybe I’m not a very good shopper, but I’m in the second group mainly because I (1) prefer to support my local merchants and (2) I’ve yet to find anything on line that I couldn’t buy at the same price, or close to it, locally.

Here’s the thing.  If I can buy an item for, say $200.00 on line and I can buy it for $210.00  or $220.00 locally, I’ll buy local every time.  Basically, I’m a mechanical idiot.  It’s worth it to me to spend an extra 5-10% to have somebody close by to hold my hand when I can’t figure out how to make something work.  I’m not alone.  Based on the statistics, a lot of people feel the same way.

Case in point:  I just bought a new cell phone.  The instruction book wasn’t in the box.  Today I’ll go back to the store and get it.  If I had bought the phone on-line, I’d have to send an email and wait for a response.  Assuming they get back to me, I’ll then have to wait for the instruction book to come in the mail.  Meanwhile, I have a $179.00 phone that I can’t use properly.

To me, the key to competing with on-line merchants is to let the customer know how much your service is worth.  Granted, some people just don’t care.  All they’re interested in is getting the lowest price.  Chances are those people aren’t your customers anyway.  If there were no Internet, they’d either buy from the big box store, or they’d be searching the ads in the back of the magazines.  Either way, you don’t get the sale.

There’s a lot of hype about on-line merchants.  The media love them!  Price shoppers think they’re the greatest thing since sliced bread.  (I wonder what the greatest thing was before somebody invented sliced bread?)  Anyway, the facts don’t necessarily support the hype.  Depending on the industry, web sales still represent a small piece of the total pie.  According to the US Department of Commerce, 3rd Quarter 2009 on-line sales represented 3.7% of all retail.  Obviously the percentage varies by industry, but overall, nine out of ten retail dollars are spent at brick and mortar stores.

e commerce stats

Big on-line merchants like Amazon.com are doing very nicely, thank you.  But there’s still a huge market out there for your store.  Rather than chasing sales that you’re never going to get, in 2010 your brick and mortar customer should be your major focus.

Granted, on-line sales are growing, 4.7% in the third quarter of ’09 vs. 4.3% in ‘o8.  Today’s strategy may not work in the future but carpe diem,  seize the day.

Meanwhile manufacturers will continue to wrestle with the question of how best to market their products.  That 4.7% is worth more than $30 billion, hardly chump change.  Like I said in my last post, brick and mortar independent retailers should support suppliers who support them.

Here’s a post that I wrote in 2006 on Your Business Strategy that you might find interesting.

Are Your Suppliers Letting You Down on the Web?

If, as I suspect, you’re a web-savvy entrepreneur, (If you’re not, how did you find this post?) it’s in your best interest to find the manufacturers who think the same way that you do.  The fact that you’re a blog reader tells me that you know how to find relevant information and that you know what to do with it.

Whether we like it or not, (and we should like it) the way business is done in the US and in the entire world is changing.  You can pretend that you’re customers can’t find the lowest price on anything with just a few minutes of web surfing, but you’d be sadly mistaken.  You can assume that your customers have to leave their homes to shop, but you’d be very wrong.  Maybe you don’t think that eBay and Craigslist are your competitors, but I promise you that they are.

Wise manufacturers are working with their dealers to provide them with the best, most up-to-date tools and information.  We’re in the midst of an economic crisis yet many retailers are thriving.  Often, but not always, these dealers are supported by like-thinking vendors.  Some dealers thrive in spite of their vendors, not because of them.

By way of disclaimer, I don’t claim to be the most knowledgeable person on the subject of social media, but I have been a blogger, podcaster, and forum administrator for quite a while.  Between this blog and its predecessor, I’m approaching my 900th post.  I regularly follow dozens of blogs and podcasts.  Obviously I’ve invested a lot of time and effort in providing information to small business owners.  I guess that, since you’re reading this, you must find some value in the content of Mining the Store.

Sadly, there seem to be a lot of manufacturers who just don’t get it.  Twenty-first century business owners want and need help.  The climate is just too hostile for each of us to reinvent the wheel every day.  Likewise, very few suppliers have all the answers.  (even if they think they do)

The key to success in the year 2010 is community; communities of people with common interests who get together online to share information.  Whether it’s politics, sports, health matters, or business, anyone with a computer and an Internet connection can find communities of interest where any question can find its answer.

A wise supplier will get involved in the communities that affect his/her market and become a contributor.  Simply lurking, seeing what people are saying, is critical but it’s far from sufficient.  The days of a company looking down at its customers, considering them necessary evils, are over.  There are too many other vendors who treat their dealers as partners in the supply chain.  They will be successful.  Make no mistake, the same rules apply to retailers and their communities.

The bottom line here is that you have to hold your vendors feet to the fire.  Demand that they give you the help that you need or you’ll take your business elsewhere.  I don’t want to generalize too much, but there are vendors whose sales are down who actually blame their dealers.  They have such a perfect product and such infallible marketing programs that the problem couldn’t possibly lie with them.  Therefor the fault must be yours.  One sales manager actually wondered on an industry forum why “the better dealers” aren’t participating.  Maybe it’s because “the better vendors” aren’t participating?  I’m just sayin’…….

I’m not advocating for insurrection here.  But I am suggesting that you insist that your suppliers give you the help you need to move the product through the marketing chain to your/their customers.  History has shown, even with the help of the Internet, that it’s very difficult for a vendor to go directly to the consumer.  They need you more than you need them.  If they aren’t giving you what you need, they’re not doing their job.