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Don’t be afraid to change your business plan, some plans don’t make sense

23 Dec

Posted by Christine as Entrepreneurship

For those that are new to our blog– I’m Christine – Steve’s wife. Some of my previous posts are here and here. I haven’t posted in a couple of months because I’ve been so focused on my book business. Anyway…

My dream is to own a successful profitable business doing something I love. I want to make money, but it must be doing something I love and I love books.

I’ve always planned to open a retail bookstore – a discount bookstore with all bargain remainder type books. I’ve been in the book business for over 14 years. I visualized every aspect of my new store:

The employees I would need
The computer architecture
The shelving
The trim
Where I’d position the counter
The name
The style
The logo
Everything

I’ve owned and run several small businesses. I read tons of books on running small businesses, retail trends, and why people buy – see my favorite booklist below. I thought… when my boys get a little older, when I have a little more time, when I have a little more money, you know the excuses… finally, a few months ago I thought, why not now? I can do it. We have the money, the kids are in part-time Montessori, and I can make it work. I started scouting out my surrounding area and took down phone numbers of both new strip malls and older out of the way places. After making several phone calls my dream of a retail store began to fade. Rent was outrageous! The new malls wanted $22 per square foot plus $8 – $12 for taxes and maintenance fees. The second rate malls wanted $15 - $18 plus the added extras. A well-stocked bookstore needs lots of space. I was looking at $4000 - $6000 per month just in rent. To be honest, I think I could make it, but it doesn’t make sense to pay that amount in rent. It isn’t profitable enough. I could probably find cheaper rent in a downtown area but I wanted a suburban bookstore. A place where stay at home moms could drop in during the day and browse books with their kids or dads could give mom a break on the weekend and the kids could play in my ‘kids den’ area, all while dad shops for books at a cheap price.

Altering the Dream

2 weeks ago I had one last phone call from a property owner and he said he had a great deal. After speaking to him I knew I had to alter my dream. The “great deal” was $14.00 per square foot. Wow! I thought it was pretty good considering the location. Then he said “Oh, and the taxes and CAM (common area maintenance) are $8.00 per sq. foot.” My heart sank. I cried. I couldn’t take it anymore. I’m not about to give up on the book business, but my plans needed to change.

I run an online bookstore from the basement of my house. Business has been awesome. I’ve broken my yearly plan by over $10,000. My sales are double what they were last Christmas Season. My original plan was to build up my inventory and move it into a retail bookstore, running the retail store with a large web presence. After discovering the cost of retail space and finishing the book Tax Loopholes for eBay Sellers I realized my retail dream is dead. When I look at all the tax write offs I have for running a business out of my home and employing my kids when they get older, hands-down a home based business is the clear winner. In Minnesota we could buy a 6,000 sq ft house on 10 acres and build a 5,000 sq ft building for less than the 6K per month I’d shell out on retail rent.

The new plan is to just keep growing my online business.

It’s hard to change my plan to own a retail bookstore because I love the idea of being a visible part of our local community. You are a destination where people come to shop and feel happy. When you are online you are a mystery. Nobody knows or cares who you are just as long as they get their product. My plan will now consist of buying a bigger piece of property. Something I can build a large 4-season outbuilding on. Instead of nice wooden shelving with the books organized by category it will contain steel shelving with books sorted by barcode. Instead of having a staff of knowledgeable ‘book people’, I will have my children and neighborhood teenagers running around folding boxes and slapping address labels on them. I’m not giving up; I’m just accepting the changing reality. All this is fine with me because – in the end – what I really like to do is – make money doing something I love. And I love being surrounded by books.

You can browse my eBay bookstore here:
http://www.soconik.com

Recommended Reading List (sorry, I don’t have them in my inventory right now)

The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It

Tax Loopholes for eBay Sellers

EBay Powerseller Secrets

Rich Dad Poor Dad

Cashflow Quadrant

Own Your Own Corporation

Why We Buy

Call of the Mall

5 Responses

Soni

December 23rd, 2006 at 6:58 pm
1

The nature of the global market is changing everybody’s viewpoint of what “a business” looks like, these days. I think it won’t be too long before the notion of having a brick and mortar in order to have a business will seem as old-fashioned to us as the concept of joining a guild and working for 7 years as an apprentice in order to legally qualify to work on your own does now.

Besides, from what I’m reading in your post, it seems to me that the books are the dream. The rest is just infrastructure.
TOMAS

December 27th, 2006 at 11:14 am
2

I would have to say that there’s nothing wrong with having a Big Hairy Audacious Goal (BHAG) to shoot for, and in your case Christine, that would be to have an actual retail bookstore where you could stack your books on nice wooden shelving (or bamboo to help the environment :) ), chit chat with patrons, and have a staff comprised of knowledgeable book people. Maybe changing your business plan in the short term and exclusively selling online might be one step that will eventually enable you to have your physical bookstore. So be sure to at least keep the idea in the back of your head, or write it down somewhere if you haven’t done so already because you never know what opportunities may come down the line to make your dreams a reality.

In the meantime, I would suggest blogging and writing more often in order to become less of an online mystery and help you connect with other people online who share you love of books (you might also want to check out Shelfari as a way of finding fellow book lovers and also help promote your site). Also, you might look into making your online bookstore a little more personal and exclusive by switching to a service like Shopify or creating your own personal e-commerce site.

Anyway, it’s just a suggestion. Oh and BTW, you might want to add Jim Collins’ “Good to Great” to your reading list, it’s a good read!
Josh

December 27th, 2006 at 1:58 pm
3

I had a dream to move to Atlanta and expand my real estate business. When I did, everything failed in a perfectly unexplainable way. I was thankful for the opportunity and began to look elsewhere for new ones.

I got more ideas, and way more profitable business ideas from my failure than I ever would have if my plan had worked to perfection.

Sometimes our plans seem right to us, but as it turns out there was a better opportunity we just weren’t looking at.

I like the idea of an internet store over a brick and mortar because you have #1 a global customer base, #2 very little startup costs, and #3 your monthly expenses are far less. It’s a win/win/win!

Best of luck to you, and keep us up to date with how it goes!
Christine

December 29th, 2006 at 8:47 pm
4

Tomas: I am keeping the bookstore wish in the back of my head but I get so obsessed with things I need to change my obsession. I get so “up” and then so “down” it’s draining. Thanks for the links – I am really considering setting up my own e-commerce site so I can get more regular customers and have more independence from eBay and Amazon and set myself apart.

Good to Great is on my bookshelf :) Steve has read it but I haven’t yet.

As for blogging, I always have these great ideas but I find it hard to sit down and write. I spend so much time on the computer already working with my books.

Josh: I agree with your win/win/win. There is so little risk with internet retail. You buy something, it doesn’t sell, oh well, sell it off at cost and try something new.
jpdmom

March 8th, 2007 at 10:12 am
5

Just found your blog and what a great, well-written article. I too run a small business and things have had to be altered to fit in with our life. We originally (me that is) thought we could run it out of our garage, but with manufacturing, shipping and making tiles the business took over our home. We now rent space as close by as possible, but rent is a killer, really hurts us. Now in our 4th year in business, with one year under our belt paying for office space it feels like only being in business a year. Slow and steady wins the race I always say. Do consider reading the book by Lisa hammond “Dream Big”. Best of luck!