Message
#152
Wednesday, August
16, 2000
Experience
is the best teacher. And if you have no experience as a retail-business owner,
you may find it hard to accept what I’m going to tell you today. But tTry.
It could save you a ton of heartache, disappointment, and money.
I’m
going to try to persuade you to resist the temptation to go into the retail
business.,
Nnow
or in the future. As a career or as a “nice thing to do for retirement.”
My
first serious venture into retail took place when I retired. I was 39 and way
too young to just play golf, so I bought my way into a retail fine-art
business. I
took, taking half interest in a very
successful little operation in Boca Raton, Florida, 15 minutes from my home.
My
partner, a one-time clinical psychologist, had been in the business for 30
years. He loved art and enjoyed people. His seemedI imagined that he
had the perfect life. Sitting amid splendid, wonderful things, reading
great books, attending the occasional cocktail party, rubbing elbows with
creative people, etc.
It
was a nice dream. Bludgeoned the very first day I showed up for work. There was
little time for reading. E – every
productive moment needed to be spent on bringing in new customers, “educating” (i.e.,
selling) existing ones, looking around for art to sell (buying right is
absolutely critical in retail), keeping track of inventory, etc.
NoRetail , retail
business did not provide the relaxed atmosphere I sought. The
pressure to sell – to pay for all the fixed expenses (Yes, location is
the first rule, but good location is very expensive) – is
enormous. (Yes,
“location” is the first rule
of success
in retail,
but a good location is
very expensive.) You have to push just as hard as you do in any other
business.
But
that was not the worst of it. The thing about retail business I
most disliked was the time requirementsit required.
Retail business is a ball and chain. If you think it’s hard to get away from
the office now – to attend a trade show, say, or take an impromptu vacation – , try
getting away
from retail. You just about can’t do it.
If
you are lucky enough to have someone . . . even one person . . . – you
can rely on, who canto handle your
customers properly and take care of the many minor emergencies that come up, you will still have one leg
shackled. The fixed-time requirements hours
(usually six days a week . . . …sometimes
seven) become very tiring.
Between
the constant pressure to sell . . . sell . . . sell . . . and the eternal
hours, I gave up (I hope for good) my aspirations. I sold my interest back to
my partner (at a considerable discount), and he then promptly
shut down his retail business and went wholesale. (No fool, he.) And I
never looked back.
Since
my own little retail-fantasy bubble burst, I’ve paid more attention to my
friends in the retail business. Everything I’ve seen has convinced me I was
smart to get out of it. Even the most successful of my friends are still
tethered to those miserable hours. On Saturdays, they are not in their back yards
barbecuing. They are in their stores. Friday evenings, they don’t
leave early. They stay late. Ugh. I don’t like to
think about it.
Of
the various retail fantasies you may be harboring (I know you are!.
Don’t deny it!.)
the worst – and by far the most common – is the restaurateur hallucination. Everybody
who has any successbeen at all
successful in any business, and this includes most athletes
and movie stars, wants to own their his/her own
little bistro.
Here’s
my advice on that:.
Shoot yourself first. There is nothing more life-draining than owning a
restaurant. Sure,
you can make yourself the Center of Attention and Life of the Party.
But for every restaurant groupie who giggles at your jokes and/or smiles as you
pass by, there is one who will call you over to tell you how bad your food is,
how slovenly your staff, how miserable your décor – and can’t you turn the air
conditioning down?
I
used to be in the restaurant business. And I’ve I have several
friends in that business now. Take it from usme,: the best way
to enjoy a restaurant is as a patron. You pay people to kiss
your butt. That’s so much better than being the
boss, paying employees to show up (occasionally) with all their many problems
(not to mention sinus infections) and kcow towing
to obnoxious drunks and pretentious asswipes who send back perfectly good wine
because they
“don’t really like it.”
The
black evil cousin of the restaurant fantasy is the
bar fantasy. I was once also in
that business,
too.
TNow
the thing about running a bar business is that if you do it right,
you can eliminate most of the problems with retail businesses. A bar is
relatively easy to run, and almost anybody with a third-grade
education and a decent personality can work it for you. The trouble with the
bar business, however, is that it will more than likely turn you into a drunken
lech. (I’ll tell you more about it and how – if you want
– you can succeed in the bar business in a later message.)
One
final point: My advice about owning a retail business does not apply to chain
stores, franchises, and the like. Those are totally separate
animals. In a previous memo (Be a Seller, Not a Buyer) I
talk about that. And I’ll be glad to discuss it some more(I’ll talk more
about this in the future.)
For
now, make
yourself a solemn promise. No retail. Not now. Not when you retire.
Don’t
buy anything with credit that won’t last as long as the credit payments. In
other words, don’t pay so much for something that the monthly payments will
last longer than the thing itself.
A prime example: vacations.
Many people make this foolish mistake. The vacation may be great, but a year
after you’ve returned (and it’s time for another vacation) you are still paying
that damn bill. And the interest charges are mounting.
Remember: the
secrets we’ve talked about when we speak of Living Rich. The best
things in life are free – and the next-best things can often be
bought at a discount. If you are buying aAny thing – a product you buy – then itshould
be made to last. If notit isn’t, don’t buy it. (This actually
applies to fashion, too, if you think about it. If you follow
trends, then you will be spending
a lot of money on something clothes that
lasts only a season or two. If you buy cClassics, you can
will
enjoy them forever.) If you are buying an experience . . . …such
as a vacation .
. . …then you don’tthere’s no need
to spend much on it, because the quality of the experience is almost entirely
dependent on the mentality attitude you
bring to it.
MMF
* Thursday’s Class
Work: TV commercials – what you (and only you) can do