Message #152

Wednesday, August 16, 2000

 

“Forgive us for frantic buying and selling; for advertising the unnecessary and coveting the extravagant, and calling it good business when it is not good for you.

United Presbyterian Church, Litany for Holy Communion (1968)

Question: Why did God create Goyem?

Answer: Someone has to buy retail.

 

WHY YOU SHOULD NEVER GET INTO RETAIL

 

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.”

Take it from me . . . if you can.

 

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.

 

What You Get When You Get Into Retail

 

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.

 

 

The Worst Retail Business Of Them All

 

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.

 

* * * * *

 

A SIMPLE RULE FOR PERSONAL CREDIT

 

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

 

TOMORROW

 

* Thursday’s Class Work: TV commercials – what you (and only you) can do