Need some advice: Make or Break it Year

[Vigilante]

I sell hot dogs. I am selling a few hot dogs a day. The hot dogs I sell are not unique to me... several other street vendors in my area sell the same hot dogs. However, the hot dogs are definitely superior to some of the shit masquerading as hot dogs in my city.

A guy told me I could sell the same hot dogs, but just move a few blocks over during certain hours and expand hours to what they have witnessed first hand is a huge surge in foot traffic. The move to the new corner would literally cost me next to nothing, but I feel that I am ill equipped to spend the time and energy it would take to make the move. I could keep all my existing business, and use my existing cart to cover this new corner as well.

I talked to a guy that used to own a cart, on my same corner! He told me he took the same advice, moved down the street, and his results were way different than mine! I don't get it. Maybe he doesn't get it. I have a lot of time invested in this corner. Now he's telling me I need to learn a totally new corner in addition to mine? I'd rather just stay where I am at. I can't be in 2 places at once... even though he told me I didn't have to be. I could cover them both, as each corner had different time constraints.

I could use my same cart, my same ingredients, and my same mustard. All I had to do was move a few blocks over, and expand my hours. I didn't have to add more staff, change my formula, or even change my price. I just had to move into a higher traffic arena.

I decided to stay where I was, and just try and sell more hot dogs from my existing corner. I want to give it another year.

After that year, if it doesn't work I will just sell the damn cart and try something different.

 

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[Vigilante]

Cost to get yourself up and running on Amazon? $40/month and 10 hours to start. Should be profitable from month 1.

Cost to get yourself up and running on eBay? $0/month and 10 hours to start. Profitable from first transaction.

Cost to get yourself going on Pinterest/Facebook/Tumblr? Free and 2 hours to start. FREE. Your customers are already there!

If you can't find the time to invest in your business, you are doing something wrong. Nobody (from me to Donald Trump) can't find an extra 2 hours in the day.

I wish you the best, but am not sure that I have anything else I will be able to add that can help you. You're pretty determined to keep your hot dog cart on the same corner and hope for different results.

 

[CPisHere]

Thank you Vigilante.

I can't help but feel this ignores the reality of personal preference in what type of business you want to operate. I'm not in this JUST for money but also to enjoy what I do. And at this point I cannot afford to hire people to do all the aspects of online sales we need to, and am personally more interested in focusing on the physical store.

I will keep my hotdog stand on the same corner, but start selling hamburgers too, and hope for better results.

And, if in a year - it doesn't work, I will thank you again and humbly move my hot dog stand.

 

[Chapas]

I would of course also recommend you to start selling online, however, it looks like you are determined to focus on the physical store. Which is fair enough of course.

I know very little about B & M stores, though I might have a little idea for you.

There is a danish/dutch clothing company that is becoming quite popular here in northern Europe. They have a concept that a potential customer walks in their store, where he/she answers some questions about their clothing style and gets their clothing sizes measured. That might only take 10 minutes, and after that the customer leaves the store. What the company does now, is that they send a box of clothing to the home adress of the potential customer. The customer is now able to try out the outfit in the comfort of their own home. Whatever they want to keep, they just keep, and whatever they do not want, they just send back in the same package.

With your clients being the upper-class, I can imagine that they really want to save time wherever it is possible. And with this service they definately will save a lot of time. Also next time your busy customer needs some new clothes, and might not have the time to go shopping for many hours, they can just call you; and with you already having their measurements and know what they like, you can just send them a package of clothing and save your customer a lot of their precious time.

I do not know if this is something for you, however, I think that it will differentiate your business and help create good value and service towards your customers

 

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[biophase]

It's not really a personal preference to me, it's a business decision. If you already have a store open and you already have employees, I can only assume that they have some down time since your sales are not where you want them. So to make money, you need to figure out things for them to do when there is nobody in the store. I assume you already have internet connection in the store? You have a merchant account?

You should not need to hire anyone to get an online presence. I also think that you underestimate the profitability of going online. Let's take my business for example. I have a location and I could have a showroom/retail store, but I don't because I don't want to hire more employees. However, I do imagine how it would be if I could breakeven with a B&M store. Imagine if my B&M store paid for my rent, employees and all utilities and my online was then pure profit from (income - shipping + boxes). I would be killing it! Not mention the deeper discounts you get from suppliers by running more volume.

Maybe you just don't understand the online aspect, but your costs on running a store would be less than $100 a month. The beauty of the online portion is that it will supplement your income. Let's say you get 1 order per day with a profit of $50. Your employee will spend less than 10 minutes on this order. In a year that would be $18250 added to your bottom line with $1200 overhead.

I understand why you want to give it another year to see, but why leave $18,000 on the table in 2015 and only try it in 2016? BTW, the longer you wait to get in online, the tougher it will be.

Why would you want to go the tougher way to make revenue when there is a relatively easy way in front of you? Seems odd to me that you aren't giving your entire business a chance to succeed. You can go online and while its running, figure out how to get more traffic into your B&M, in addition to online.

 

[biophase]

BUT, I have limited time and resources. I believe I can make the physical store work without online sales, and I feel that once it is working well I will be in a better position to invest into online, since I'm not currently equipped for it. If I can't make the physical store work without online, I see no point in running an online business to support it - I would just shut down the store and focus on going online (even if I have to keep the store open for a few months to make it happen).

I'd like to expand on this.

Why do you feel you are not equipped for online? What do you think you are missing?

Why shut down the store and focus on just online? The point of the physical store running with online is that it can alleviate your expenses of running online. Is your store making money now? The only reason I'd shut the store down and go online only is if it is losing money. Or if it is a big headache, but it sounds like you like to run the physical store.

 

[MJ DeMarco]

reality of personal preference in what type of business you want to operate. I'm not in this JUST for money but also to enjoy what I do.

The market doesn't care about your personal preferences. The market also doesn't care about what you enjoy and don't enjoy. If the optimum channel to move X is Y, and not Z and you want to ignore X and focus on Z, then well, good luck. At least you'll enjoy your work while breaking even (or losing money) right?

 

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[Formless]

You could get advice regarding the B&M aspect and you still wouldn't take it, because you are not here to take advice, but to solidify your perceived futility. I hope my statement makes you angry, then makes you think about your feelings about the situation.

Vig gave you advice that PEOPLE PAY THOUSANDS OF DOLLARS FOR FROM CONSULTANTS AND SEMINARS, you are ignoring it without rational reason, but only because of some rotten beliefs pollutin' ya head.

Rest, recuperate and re-evaluate. Come back to this question a week later when you're more relaxed about a very shitty situation, which I'm really sorry you've had to encounter.

 

[Wuz]

you want to be right or you want to be rich?

answer that question before you start making people wasting their time answering you.

 

[CPisHere]

I can appreciate how frustrating it must be for you all when I clearly don't want to listen...

I absolutely agree that we need to be online. But I feel like I have to fix what's broken in my store before tackling a whole new beast.

@biophase you mentioned the 1 order a day online for $18k. That sounds great! But what's easier, getting 1 more order per day in the store, which just requires us to fix our problems & get better at what we're already doing - or go from almost 0 to $18k in something we have very little experience or knowledge in??

We have a shopify store, but only do 1 or 2 orders a month. And though I've read quite a bit about online - it's, frankly, quite overwhelming. And I'm not sure if our products are a good fit for online either.

Ultimately, I think it's easier to grow our in-store sales by $50k (a very reasonable % growth) than get to $50k in online sales (which seems to me to be monumental, though obviously I know many here have done much more).

 

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[Camo & Gold]

I can see you are apprehensive about creating an online store. I'm not going to attempt to persuade you otherwise, but simply ask WHY. Why are you putting all of your eggs in one basket?

 

[CPisHere]

I can see you are apprehensive about creating an online store. I'm not going to attempt to persuade you otherwise, but simply ask WHY. Why are you putting all of your eggs in one basket?

I believe it's the easiest way to grow our sales.

 

[Franky Neizer]

@Cparsons I run a small brick and mortar business and I understand your concern especially with structural changes. Since Justice manufactures most of their own goods and have 40% off sales, though they cater for low end customers, why don't you try a system where you will have some smaller goods (a smaller product your clients purchase most) branded in your name where you will offer a reasonable off sale for the new product.

Example: Have your own socks brand (a smaller product your clients purchase most), set up a department in the shop for the new product with a nice display with a 30/ 40% off (the product should be well produced though it will be a bit cheaper than other similar socks you sell in the shop), this will draw in low end customers; you should consider reducing the prices of some of your smaller products so low end customers who purchase your new branded products might make other purchases as well. It wouldn't mean you are going low end but offering products that your high end customers can purchase large quantities due to the reduced cost.
NB:Upper and Middle class customers do purchase cheaper quality goods as well...

 

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[MJ DeMarco]

I believe

 

[Camo & Gold]

I believe it's the easiest way to grow our sales.

Easier than setting up an Instagram account?

 

[CPisHere]

Easier than setting up an Instagram account?

We have an Instagram account, and 500 followers.

 

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[Camo & Gold]

We have an Instagram account, and 500 followers.

Now get out there and set a goal for 1,000 followers!
"Nobody got anywhere in the world by simply being content"- Louis L'Amour

 

[biophase]

I can appreciate how frustrating it must be for you all when I clearly don't want to listen...

I absolutely agree that we need to be online. But I feel like I have to fix what's broken in my store before tackling a whole new beast.

@biophase you mentioned the 1 order a day online for $18k. That sounds great! But what's easier, getting 1 more order per day in the store, which just requires us to fix our problems & get better at what we're already doing - or go from almost 0 to $18k in something we have very little experience or knowledge in??

We have a shopify store, but only do 1 or 2 orders a month. And though I've read quite a bit about online - it's, frankly, quite overwhelming. And I'm not sure if our products are a good fit for online either.

Ultimately, I think it's easier to grow our in-store sales by $50k (a very reasonable % growth) than get to $50k in online sales (which seems to me to be monumental, though obviously I know many here have done much more).

I don't know what your work day looks like. But you would have to believe that getting one more customer to purchase a product per day should not take all your energy. It sounds like you want to concentrate on more walk in customers and higher gross sales. To me, this is one of many tasks that you should be doing in 2015. That's not a huge goal to set for 2015. You are talking about increasing sales by $4k a month, $1k a week, $150 a day.

I would think that you should be shooting for this.
Increase gross sales by $100k ($50k walk-in, $50k online)
Increasing margins by creating your own line of products
Negotiate lower prices with your vendors
Lower your B&M expenses

With these 4 goals in place, you should see a huge increase in profits even if you only attain 50% of each goal. I mean you are talking about a year's timeframe. Set up man!!!

 

[AjeDad]

I have retail. 50-75% gross profit margins selling quality customizable furniture to high end customer, but also accommodate middle class with lower priced options.
My growth will either come by adding locations;or focusing on becoming true destination with larger showroom, horizontal expansion in product lines to cross sell, maybe vertical in manufacturing or value-adding, and expanded marketing.
Furniture doesn't ship cost effectively, but an improved web site can never hurt
You can focus on your image and brand and sell accessories online. Maybe create your own

 

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[ZCP]

Battles are fought on many fronts. If YOU want to focus on the B&M, fine. Hire someone to handle the online. Do both. Your business deserves all avenues of growth. Fight many fronts.

Your posts sound like my Dad and his business..... Don't want to change, will just try it one more year (for 5 years), online is hard (because I don't understand it), not going to hire somone even if what they do is profitable.....

He died in February.....penniless. I have the papers to sign on my desk to close his insolvent estate.

 

[randomnumber314]

I can appreciate how frustrating it must be for you all when I clearly don't want to listen...

I absolutely agree that we need to be online. But I feel like I have to fix what's broken in my store before tackling a whole new beast.

@biophase you mentioned the 1 order a day online for $18k. That sounds great! But what's easier, getting 1 more order per day in the store, which just requires us to fix our problems & get better at what we're already doing - or go from almost 0 to $18k in something we have very little experience or knowledge in??

We have a shopify store, but only do 1 or 2 orders a month. And though I've read quite a bit about online - it's, frankly, quite overwhelming. And I'm not sure if our products are a good fit for online either.

Ultimately, I think it's easier to grow our in-store sales by $50k (a very reasonable % growth) than get to $50k in online sales (which seems to me to be monumental, though obviously I know many here have done much more).

Alright dude, here's the deal: You clearly don't want the advice of the people on this forum, you want to fixate on "fixing" your B&M model that you admit has limited customer base. You don't want to go online, because...it's scary?

One time offer: I'll take your store online and we split profits 50/50. This is dead pan serious offer, and I'm sure one or two people here can vouch for my online and offline abilities.

Then, when you realize that my offer is fantastic, and you decide you might entertain the thought, ask yourself why you don't just do that yourself for 100% of the profit.

 

[CPisHere]

Now get out there and set a goal for 1,000 followers!
"Nobody got anywhere in the world by simply being content"- Louis L'Amour

Obviously we worked to get those 500, and are continuing to work to get more. My point was simply that it's not like we aren't doing anything for online - we just aren't that good at it and don't focus on it for online sales (the majority of our followers are existing customers of the physical store).

 

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[CPisHere]

I don't know what your work day looks like. But you would have to believe that getting one more customer to purchase a product per day should not take all your energy. It sounds like you want to concentrate on more walk in customers and higher gross sales. To me, this is one of many tasks that you should be doing in 2015. That's not a huge goal to set for 2015. You are talking about increasing sales by $4k a month, $1k a week, $150 a day.

I would think that you should be shooting for this.
Increase gross sales by $100k ($50k walk-in, $50k online)
Increasing margins by creating your own line of products
Negotiate lower prices with your vendors
Lower your B&M expenses

With these 4 goals in place, you should see a huge increase in profits even if you only attain 50% of each goal. I mean you are talking about a year's timeframe. Set up man!!!

I appreciate this kick in the a$$.

Suggestions for specific avenues I should be focused on for increasing gross sales (both online & in-store)?
The past few months we've really focused on our e-mail marketing - setting up a welcome e-mail (now we need a series), sending bi-weekly informational and/or promotional e-mails (30%+ open rates for a list of ~2,000), and e-mails to re-engage lapsed customers. This seems to be going well. We've also been looking to better our inventory by ensuring cross-sells and/or up-sells for everything, and putting a high margin featured item at check out. This is a slow process since most of our purchasing happens 6 months in advance but I think it will be good.

I'm planning to start creating our own products with t-shirts (via a heat press) & our staple gift item (I'm researching vendors that make similar items on Alibaba). I figured these would be the easiest, most profitable options to start with.

I definitely need to negotiate with vendors more - better pricing, extended terms, and more freebies.

I've looked at B&M expenses and don't see many options for cost cutting without impacting operations of the business.

 

[CPisHere]

Alright dude, here's the deal: You clearly don't want the advice of the people on this forum, you want to fixate on "fixing" your B&M model that you admit has limited customer base. You don't want to go online, because...it's scary?

One time offer: I'll take your store online and we split profits 50/50. This is dead pan serious offer, and I'm sure one or two people here can vouch for my online and offline abilities.

Then, when you realize that my offer is fantastic, and you decide you might entertain the thought, ask yourself why you don't just do that yourself for 100% of the profit.

Sent you a PM.

 

[Nicoknowsbest]

@Cparsons - my advice? LISTEN. Learn. Apply. Some of the biggest names here are trying to HELP you. Don't close the door in front of their noses.

 

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[Determined2012]

It seems to me that you just don't want to go online because you fear that its going to be hard...and a lot of work.

If so, DUH. (NO disrespect sir.) But that is what entrepreneurship is, and what it is SUPPOSED to be. HARD. WORK.

If this stuff was easy everybody and their momma would be doing it.

But seems you have found a solution in teaming up with RandomNumbers....

Robert Half said:
"Delegating work works, provided the one delegating works, too."

Good luck, looking forward to your update.

 

[CPisHere]

UPDATE (ONE YEAR LATER):

My business is up 40% from last year, because I ignored the advice here.

It's not because the advice here is bad. I'm actually focusing on all this advice for 2017. It just wasn't the right time. I couldn't put my finger on it when I wrote this, but all the problems I thought we had were not the real problems, which lead to everyone here trying to answer the wrong question.

 

[Stevo1]

Great news. Are you going to tell us what the real problem turned out to be and how you fixed it?

 

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[AllenCrawley]

UPDATE (ONE YEAR LATER):

My business is up 40% from last year, because I ignored the advice here.

It's not because the advice here is bad. I'm actually focusing on all this advice for 2017. It just wasn't the right time. I couldn't put my finger on it when I wrote this, but all the problems I thought we had were not the real problems, which lead to everyone here trying to answer the wrong question.

Considering the time and energy many devoted to your OP it would be nice if you would share what the real problems were and how you remedied them and grew your business 40%.

 

[CPisHere]

Great news. Are you going to tell us what the real problem turned out to be and how you fixed it?

The real problem was that our sales were being limited by our (lack of) inventory, which was being limited by our (lack of) cash. And the lack of cash was because our sales weren't high enough.

So a bit of a catch-22, but once I figured it out we cut expenses as much as we could, added some non-inventory based revenue, and focused on pouring all our money back into inventory. Now we have adequate inventory and our sales are high enough to provide cash-flow, which allows me to focus on growing other ways - like online.