After having a shop for one full year many lessons were learned, and for now at least, it’s closed.
I do not consider closing after only one year in the retail shop business to be a failure. Some valuable lessons were learned, experience gained, and friends helped.
As for the friends, another couple who had a shop here in town, were having some difficulties in life and without partnering with someone else would have had to close. I’m glad we were in the position, also having similar difficulties, to be able to partner for the past year. Our friends are now in a position to move forward and we gained the experience. That’s a win!
There’s no better education than the experience of life. Should we embark on a retail shop path again one day, we’ll be better equipped knowing from the start what we’ll need to do and what to expect.
Lessons learned?
* You won’t be paying yourself for a while *
In fact I never got paid for any of the countless hours I worked, both in the shop and at home. Why? There never was quite enough sales to allow that. Let’s face it, creditors, rent, utilities, all get their money first. After that, there was nothing left. So you need to have a nice savings built up to get you at least through the first year if not longer.
* What you stock makes all the difference *
In spite of all the reports of a booming economy, the really nice, over $10 items, didn’t sell much. Especially in a tourist town, you’re relying heavily on spur of the moment purchases, which items priced under $10 win every time. Also a certain level of diversity in your stock helps drive sales. Ours was a specialty shop, which can work, or won’t work at all depending on what your specialty is. Our appeal was limited to a small group of shoppers, which of course limits your potential daily sales.
* Local products are best *
Local products tend to often sell better, both because it’s made locally and that typically means it’s unique. Another huge advantage is that you’re not stuck with enormous freight charges when buying local. We quickly discovered with many products we couldn’t add our freight costs in to the sale price because it would make it more than people wanted to pay. So we ate the cost as a business expense.
* Business expenses will break you *
As I mentioned earlier, rent, utilities, licenses, taxes, freight, shopping bags, wrapping paper… the list of things you need to pay for is endless. It’s a constant battle to get the best prices on these things when ever possible, but also on the stock you’re buying.
* Location matters *
No matter how much you advertise, if you’re not located on the routes where all the other shops are, you won’t get the business. The downside of that is also it’ll be the high rent district.
* Beware of the tourist season *
When tourists are in town, business is good, even in a poor location. But when it’s not tourist season, business is bad. Here it was non-existent. There were 2 months we didn’t have $100 in sales all month. Which means you’re now paying for all those expenses out of your pocket. Money management is crucial to get through those times.
* The government owns you *
Or at least they think they do. And the myriad of taxes and laws and regulations change constantly. Expect to pay A LOT in income taxes. Our tax bill was almost equal to our profit for the year. And after not getting paid for my work, was insult on top of injury.
Will we do it again? Time will tell. I’m not opposed to it. And I do miss the customers, that much was fun most of the time. At least if there is a next time, I’ll be better prepared for what to expect.
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