Jerry, Jeff and David

Are they really entrepreneurs?

Once upon a time there were three businesses owned by local families. All of the businesses were in the same community but did not compete with each other because of their locations and product mix. There were several things they shared in common. All had been started about the same time.

The three businesses enjoyed their best years at a point in time when neighborhood businesses were at their best and mass merchants were only coming onto the retail scene. The businesses were all known by many people within the community and drew their customers from areas that were larger than most similar stores. One of the biggest challenges each faced was what to do when the mass merchants were enlarging their realm of influence. While each of the three businesses enjoyed growth for many years, none of the three looked about the community to see the changing landscape of retail.

All were started by couples that later brought their children into the business. Even after their children completed their schooling, they returned to be a part of the family business and eventually succeeded their parents in operating the business. The second generation did not enjoy the same success their parents had and eventually closed their family businesses. The second generation owners, Jeff, Jerry and David, stayed within retail after closing the business as they went to work for other businesses. Only one of the three went to work for another independent; the other two found jobs working for mass merchants.

Each of the three members of the second generation demonstrated the same great personal skills with customers and vendors that their parents had shown over the years. The second generation members each worked hard and many hours each week within the business. Why did they fail?

One observation that could be made of Jeff, Jerry and David was that perhaps they spent too many hours within their businesses. None of the three made any effort to visit the competition; be it other independents or mass merchants. They had little or no idea of what the competition was doing.

It could be said that David had the best clue given to him about visiting the competition. When being interviewed by a newspaper about the closing of the business, David said, “We always take good care of our customers. They come here often. We have a reputation of having all kinds of unique products. We know this because our customers say that if they can’t find it anywhere else, they know they can find it in our store”.

Unfortunately David took this as a compliment from his customers. David never stopped to wonder, or investigate, why the customers were choosing to do their first shopping in another business and coming to his business as a ‘last resort’. The hint was there from the customers; David just was not hearing it.

Jerry observed that his part of retailing was changing. His father operated the business in a time where customers would buy something and then call to have it serviced or repaired as necessary. As with many businesses, the service and repair component of the business can be very profitable.

Over the years, the type of products they sold required less and less repair; many customers simply discarded a product instead of repairing it. The business was also challenged by mass merchants that sold similar products at lower prices.

Few customers understand that very often the product being sold at a mass merchant is not the same product that is being offered by the local business. The manufacturer is leveraging their name and reputation in offering a product that is of lesser quality. Unfortunately, the customer can rarely distinguish the differences in the two products. All they see are two items that look identical but have very different prices.

While Jerry and his father both knew this, they did nothing to educate their customers as to the difference in product quality. They simply kept the doors open and took a beating in sales and profit until the point where all of their reserve money had been spent. Jerry closed the business and took a job working for another independent business where selling products and providing service and repair was still an option.

The story of Jeff and his family business was such that they never quite seemed to be into the idea enough of operating a retail business. Pulling into a parking space in front of their business you always recognized a couple of cars near the front door; they were the vehicles of Jeff and his father. Customers had to walk past their cars just to get in the front door.

The floors were always dirty; dust was everywhere; ceiling panels were missing; and you could always expect to see at least a quarter of all the lights not being turned on when you walked in their business.

Yet, when you saw the family in the store, they were always busy doing something; just not things that would make an impression on the customer.

Three short stories of three families and their businesses. All three examples could be in any town; at least one of them is likely to be a part of every town. Each of them, Jeff, Jerry and David, were the second generation in a family business, and perhaps we could anticipate they would have an advantage over many others because of their being around a parent that had many years of front line and retail management experience. Research has show that coming from the entrepreneurial background accounts for up to 40% of the success of those that make a ‘go’ of a small business.

Each of these three appear to suffer from the ‘do as we have always done it’ syndrome. This is an illness that can affect individuals, businesses, and even Main Street communities. Just like a doctor asks questions of a patient and their symptoms, let’s ask some questions to see if we have a patient/business with a problem.

When was the last time the business gave the interior a new look? This question could apply to a business owner’s office or the business itself. The same could be asked of the Main Street district; when was the last time planters were updated and light posts were checked to make sure the bulbs worked and any banners looked fresh?

How about determining the customer base? Has the business, or Main Street district engaged in research to determine who the customers are, where they live, and learned more about their spending habits? This does not require the utilization of an outside consulting firm. Colored straight pins, a map of the area and a few well designed questions can go a long way to determining who the primary customer is. The result of this will be a business that has more products and services that are targeting the right customer. For the Main Street district this means having events that will have better attendance and less money spent in media that is not targeting the ideal customer for the district.

While there can be other components that factor into the challenge, let’s stop with education as the third need. When was the last time the retailer exposed themselves to components of education? Perhaps the easiest form of education comes from reading business oriented books. The Main Street District could be working with the local library to make sure they have the most current books from authors that are speaking specifically to small business owners. The idea of reading these same books could also be asked of the Main Street staff. After all, you can’t really give someone ideas to improve their business unless you understand the challenges and opportunities they are facing.

Another aspect of education is that of attending live events. The small business owner should be attending the trade shows, conferences, and continuing education events that are geared toward their specific trade. Events that the Main Street district creates should be ones that every business should be attending. And the same suggestion is applicable for educational events that the Main Street is producing in conjunction with local colleges, SCORE and small business development organizations.

For the Main Street staff, attending the state and national events should be a regular event. While some will say they can’t afford education in tough economic times, saving money by forgoing education is like trying to save time by stopping a clock; the idea does not make sense.

Our communities have enough representation of Jerry, Jeff and David; we don’t need to create any more. We do need to do plenty to stop us from having any more. They aren’t helping our communities.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 128, Dardanelle, AR. 72834. Phone 727-823-7205. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.