Same Tricks, Different Industry....

I was watching Restaurant: Impossible last night.  If you haven't seen it, it's like Kitchen Nightmares that Gordon Ramsey does on BBC.  I love that show, too, and have used it in this blog.  Chef Robert Irvine goes into a failing restaurant and tries to turn it around.  The restaurant last night was a diner in San Diego called TRAILS.  It could have as well been a scrapbook store because I heard pretty much what I listened to for nearly a decade in the scrapbook industry.

Trails had an owner who had worked in a corporate restaurant and therefore decided she was qualified to run her own.  Lacking funds, she got her dad to finance it.  Lacking profit, they later decided expanding it out be the way to increase the cash flow so her dad took out a second mortgage and now he is $600,000 in debt.  

Reminds me of those who think that liking to scrapbook qualified them to run a scrapbook store.  So, they take out a second mortgage on their home to open one without any idea how to.  They think their "passion" will be enough to carry them.  

The decor was cute and the food wasn't bad - something Chef Irvine rarely encounters in these failing restaurants.  But, they will still losing money hand-over-fist so he set about the find out why.  

First, they bought the restaurant from the previous owner at the "Emotional Price".  Dave Ramsey would call that a "Stupid Tax".  Saw it all the time in the scrapbook industry.  An owner, having put all their blood, sweat and tears into their business, believes it is worth MUCH MORE than the sum total of the inventory and  fixtures.  They believe they have a loyal customer base and that their own sweat equity is valuable.  Financials don't matter or aren't offered up or requested.  A buyer, not getting proper advice about how a business is priced, buys into the "this is my baby, take care of it" line and just wants what they want so bad they agree to the ethereal and baseless price.  The owner of Trails paid $240,000 for about $20,000 worth of restaurant equipment in a leased building.  She claimed to have gotten a "customer base" for that price, but how many of us eat at the same restaurant all the time?  As Robert Irvine pointed out, Doctors and Lawyers have valuable customer bases, restaurants don't.  

I consulted with quite a few people who would come to me wanting to buy a scrapbook business.  They most always had the "emotional price".  And, most of the time, the current owner didn't want to release financials to them. I usually said either they didn't have a clue if their business was making money or they were lying to them that it was.  If they based even part of the price on ANYTHING, they usually started with the cost of inventory and fixtures.  How much of that inventory was outdated, though?  You can't expect to recoup 100% of your investment of inventory that no one wants anymore.  I was always surprised at what people thought their little scrapbook business was worth.  I usually told people it would be cheaper just to start their own and build their own reputation.  Sometimes, you're buying a business no one wants to come to anyway.  I cringe when I see "UNDER NEW MANAGEMENT" signs.  To me, that is announcing to the public that, yes, we were awful but come try us now!  It's hard to undo customer attitudes toward a business.   So, unless the business is making the big bucks with a loyal customer base, it's probably better to build your own than buy someone else's albatross that they are eager to get rid of at your expense.  Most of these owners rarely took home a penny while they owned the place, but now will attempt to extract their profit in the sale of it.  I usually told people to walk away.  

Their second mistake for the restaurant was pricing.  They wanted good food at a great price so they priced food based on the cost of the food and nothing else.  The owner had no idea what her daily operating costs were.  She had never calculated them.  She just said, "Let's set our prices at 3 times the cost of food" or some other "sounds like a good idea" strategy.  "Hope" is not a good strategy for a business.  She was shocked to learn that her daily expenses above the cost of the food were $900 - before she even took home a penny for herself or started paying her Dad back.   Her cheap breakfasts meant her core customers were geriatric and on "fixed incomes" so she kept her prices low for them and they sang her praises - right into the poor house.  

I saw poor pricing strategies way too often.  The challenge of the scrapbook industry is that everyone is selling pretty much the same stuff.  So, some would try to be the cheapest by shaving a few cents off the price.  Then, they might heavily discount their shipping if they were online.  Or, they would succumb to customer complaints about the cost of scrapbook products and try to lighten the financial burden in hopes they would sell more.  Rarely did anyone run the math or do any research about the demographics.  

Her third problem was that as a mom, she didn't want to do dinner service - she wanted to be home with her kids.  They had tried dinner service for a while but were losing about $500 a day on it because no one was coming.  Her Chef had the same attitude - she wanted to be home with her kids, too.  So, they were trying to run a restaurant on the two cheapest meals of the day.  

If I had a dollar for every scrapbook store owner who didn't want to work too many hours because they needed/wanted to be home with children, I'd be rich.  A business is the most demanding, needy and naughty child you'll ever have.  It will over-shadow and eclipse all other children until you can afford to pay someone to manage it for you.  Even then, when there is a problem, it's YOU that has to take care of it most of the time.  As one owner who closed her store told me, "When my alarm goes off at 3 am for the third time in a week and I have to get dressed and go down to the store to take care of it, I wonder how much longer I want to work for free."  

A few years ago, Dr. Phil gave some business dreaming moms a reality check on his SHOW.  Basically, if you have kids at home, don't start a business that needs a lot of your time.  Think smaller or go get a job with regular hours.  But, the idea that you can be successful only being open when the kids are at school is unrealistic.  Your customers are probably not available during those hours.  They want to come after work and on weekends - the exact times YOU want to be home with your kids.  

Start a PhotoBookBiz (or add one to your current Biz)

Did you know that by the end of this year nearly 10% of U.S. households will have made a photo book? Digital scrapbooking is growing in popularity as are photo books and custom photo products like puzzles, mugs, mouse pads, T-shirts, key tags, luggage tags, etc.

My webmistress posted a great quote on her Facebook page the other day - she said, "You can't walk backwards into the future". That's sort of where we are in the scrapbook industry. Traditional scrapbooking with the card stock, embellishments and beautiful papers that we all love, will never go away. But, digital scrapbooking and photo books have certainly become part of our future that we can't ignore.

So, ScrapBiz has now partnered with Rocket Life to offer a new PhotoBookBiz option to our program. You can now sign up to start your own business in this very fast growing segment of our industry.

This new option works great for:

• Digital scrapbook product designers
• Online traditional retailers
• Bricks and Mortar stores
• Custom scrapbookers
• Photographers (great for a home-studio!)
  
• Direct sales consultants
  

You can utilize your current customer base to introduce this new service to them. You might even be able to lure back former customers who have moved into digital scrapbooking.

Check out our FAQ's if you have questions about the new PhotoBookBiz program (scroll to the bottom). Then email (Kim at ScrapBiz.com) me if you have additional questions!

We are REALLY excited to offer this opportunity to you! It fits perfectly within our core philosophy which is to offer our members a program that allows them to be completely independent!

Check out the new ScrapBiz Website!!!

I'm so excited - we finally revamped our site. I liked the old one, but it was made by some programmers in a far off land and it had many "funky" parts to it that drove my webmistress nuts at times.

So, we decided to remodel the place! It looks pretty darn good! TAKE A LOOK!

Information about ScrapBiz is easier than ever to find! And, our members can finally stop searching for that itty-bitty "member log-in" link that was clear at the bottom of the home page on the old site. Now, it's front and center!

And, you'll notice that we added ANOTHER option - the PhotoBookBiz option. We now have 4 products to help you start or run your business:

• Start a Biz - everything you need to learn about and start a business in the scrapbook industry including the very important support you need to keep it fresh.
• Just the Start Up Guide for those just looking for information but not really ready to start a business in the near future
• Support for existing businesses - if you're already in business but looking for like-minded people to hang out and share with, then this is the option for you!
• And our new PhotoBookBiz option! We're SO EXCITED about this! You can literally start your own branded private label photo book and product site! Check out what I've done with my site HERE. This is great for digital scrapbook designers, custom scrappers, retail stores, online stores - pretty much anyone who wants to add custom photo books to their traditional offerings!

Unwritten

I LOVE this song! It's the ring tone on my phone and it motivates me on many levels - business, personal and even SCRAPBOOKING! I mean, who hasn't stared at the "blank page before you" and wondered what the heck you should write? LOL!

Enjoy!

New Weekly Feature for ScrapBiz Members

Today we started sending out an email to all ScrapBiz members called "This Week At ScrapBiz". It will highlight some of the hot topics and cool resources that were added the previous week. It will help our members keep up with our very active member "Clubhouse".

This inaugural email featured a discussion we had about business disasters (yes, we've had them!). Most of the members confessed that when they joined ScrapBiz, they got too excited about everything they had access to and they OVER-ORDERED products without having a plan to sell them. One person ordered the entire Magenta paper line (Remember them? They were HOT about 5 years ago) and it took her years to get rid of it all. We were able to share, laugh and learn from one another what NOT to do!

We also featured the January issue of ScrapBizness - our members-only monthly newsletter. It had some great stuff in it this month thanks to our contributing writers.

And finally, we featured an outside article about taking your business through a recession. It offered some great suggestions about marketing yourself to create growth in any economic climate.

If you would like to have access to these types of resources for your business - whether you are ready to start one or you already own one - then join us! There's always room for more ideas, more discussion, more questions and more friends!

“Professionalism: It's NOT the job you DO, It's HOW you DO the job.”

This weekend we had a conversation at ScrapBiz about professionalism. It reminded me of one of my industry pet-peeves - TMI aka "Too Much Information".

Many businesses in this industry are started by moms. And, as most of us know - being a mom is a hard job. Kids get sick. We are taxi drivers (one friend said to me once, "Why am I called a 'stay-at-home-mom' - I'm never there!"). We are volunteers. We are housekeepers. We do it all. And, if we are also business owners, we need to squeeze that in too.

But, when all those things collide and we find our businesses very hard to run for a few days or weeks, how do we react? Do we write a lengthy epistle outlining our tales of woe and email it off to all our customers? Or, do we do the best we can to keep things running smoothly and just tell our customers that shipping or email responses will be delayed. Or, do we ask someone else to help?

One of the big problems in the industry is a lack of a "what if" or contingency plan. What do you do if you hit a rough spot and how do you handle it to keep it smooth for the customer?

• Do you shut down temporarily and expect your customers to hang around waiting for you to return? You could - and I've seen that done by companies big and small. However, with so many places for them to shop. You will probably find that most wander off and discover someplace better. Sidenote: that's how ScrapBiz started - I wandered off and found something better where I could control what happened.
  
• Do you close up shop abruptly (I've seen that done recently, too) and leave customers - some of whom have paid you for products or services already - high and dry wondering what the heck just happened? Often, if there IS an explanation - it's forced by the angry mob and full of "poor me" whining. Not very professional.
  
• Do you just ignore your business? That's been done too. If a customer buys something from you, you can't just pretend you didn't notice and keep their money. If you can't fulfill your obligations to them, at least refund the money. You don't have a right to keep it unless you hold up your end of the bargain. I saw one business owner say, "My kids need to eat! You're not getting your money back!" Wow...
  
• Do you send long-winded emails to customers detailing all your business or home troubles and threatening to shut down if things don't improve and whining about the death of your dream and how the universe conspired against you to force you to close your business and if customers only bought MORE, you wouldn't have to do this? It's called the "blame everyone else but ME for my failure" letter. And, it's one of the most common ways a scrapbook business closes in this industry. It's so unprofessional that it causes me to gasp each time I see one.

Here's a news-flash. Your customers DON'T CARE about your excuses! They just want what they paid for and if you close - they'll just go find someplace else to shop. Your customers are not going to say, "Oh, I'm sorry. I'll stop scrapbooking if you shut down just to honor you." Or, "Oh, let me come drive your kids to the doctor so you can keep running your business." Or, "I'm such a baaaaad customer. I'll double what I buy this month so you can stay in business." They don't want the gory details. They just want to do business with you and if you aren't around, they'll take their debit card and go find somewhere else to play.

This past summer, my husband became very ill and nearly died. Yes, my business was hard to keep going during that time. But, aside from a couple of mentions here - I never went into great detail for the general public. I never made excuses beyond, "Email response time will be delayed". ScrapBiz members knew what was going on, but I still got the August and September newsletters done as was my job to do. I had people who were able to step in and help, but then, they were already helping so it wasn't that much of a change. New and old members didn't feel the effects of my family issues. They cared about Mark, but only to the point that it didn't affect their businesses. And that was totally appropriate.

So, as the title of this post says, "It's not the job you do, it's how you do the job" - be it running your business or closing your business - a big dose of professional behavior is always in vogue.

Who are we REALLY scrapping for and why do we worry?

I saw a thread on a MB the other day where a scrapper was critical of her style. Several others chimed in the say they too didn't feel like they "measured up".

Well, just that afternoon, my sons dragged out the scrapbooks to look through them. I had to laugh as I looked at some of my pages from 10 years ago. If deco scissors and pop-dots were crimes, I'd be a "lifer". Many of those pages (not even my earliest - my scrapping days go back to the mid 90's) are so downright funny. The photos are matted with cardstock whose edges have been lovingly cut with my deco scissors. Then I went for the "layered look" and raised photos and embellishments up off the page with foam dots.

But, who cares? I get a laugh out of the "retro look", but my boys spent a couple of hours looking through them excitedly talking about the things they did remember and asking questions about the things they didn't remember. Anytime you can get an 8 and a 10 year old boy to not fight with his brother for 2 hours (okay, there was a scuffle or two, but they were mild) and talk together, that's a good day!

And, they didn't say, "UGH, MOM! What were you THINKING using this plaid paper???" Or, "ICK! Sticker Sneeze!" The most important thing to them are the memories and stories behind the photos.

I jokingly refer to scrap magazines as Fashion Mags for Scrappers. You can't afford the $2000 purse in Vogue anymore than you can afford to spend 3 weeks on one page with a single photo and some words of wisdom that would make Ghandi look like a rube. Yet, we look through the magazines and try to copy the pages and then criticize ourselves when they don't look good enough. The women making those layouts are very talented, but I would bet good money that just as the models in Vogue go out without makeup and fancy clothes most days, the everyday scrapbook pages of those magazine scrappers are quite a bit different from their published pages. Personally, I have all but stopped looking at the magazine layouts. Actually, I have all but stopped taking scrap magazines. I simply don't care. I'm not scrapping to please anyone but those two boys. It's their life - it's our family. We are all that matters. I could glue the photos on construction paper and write the stories with a ball-point pen and they would be thrilled.

Something to remember...

Fall Craft Shows and Angel Policies

It's funny how I see the most messages regarding Angel Policies during the Fall. It just dawned on me that it's because many people are attempting to make a little Christmas shopping cash by selling their crafts at shows.

First of all, if you want some terrific books on selling your crafts at shows, get yourself copies of HANDMADE FOR PROFIT and THE CRAFTS BUSINESS ANSWER BOOK by Barbara Brabec. Barbara has excellent advice for selling your crafts at shows.

Number one - get your rear out of that chair and your nose out of the book! You don't have to act like a used-car salesman, but if you aren't excited about your wares, why should anyone else be excited about them? Talk to people when they stop by your booth. Don't shove your products down their throats, but just talk to them. Be friendly and enthusiastic. Listen to them and address their concerns. If something is only available in pink and someone says, "I only have boys". Then offer to make her a custom one after the show in blue. Take a 50% deposit and exchange personal information. Don't just go, "Ohhh, I'm sorry, we had some blue ones but they sold out."

Number two - realize that most people there won't scrapbook! And, they want finished products at decent prices. Projects should be simple to use (plop a standard sized photo without trimming) and made from inexpensive materials. Don't waste Basic Grey's Figgy Pudding that took you 3 weeks to find on non-scrappers. The red/white candy-cane striped paper you got for 20 cents a sheet at Michaels can look just as fabulous to the non-scrapper.

And finally, Angel Policies... Here's a past post about Angel Policies. For the mom selling a few things at the school craft show, it's not a big deal. It's when you show up on a national show with their stuff that they will get testy.

Good luck with your booth if you are selling this season!!!

Life Lessons

Recently, there was some ferver over a series of online scrapbook classes. I'll admit that I didn't really pay attention to the whole story. Sometimes, drama bores me. There seemed to be quite a bit of drama in this situation and I got tired of following it (obviously NOT a soap watcher).

Anyway, it made me wonder if some in this industry are just running way too fast. Some are starting to do so many things that they have ceased to be excellent in anything. What drives us to do this? Fame? Fortune? Fun? I'll admit that sometimes running my business is more fun that doing laundry and I will often choose ScrapBiz over dishes. But, I have a solid life plan that goes hand-in-hand with my business plan that keeps me grounded.

I have had so many ideas going around in my head over the last 5 years. But, each time something that SOUNDS like a good way to market my business comes up, I weigh it against the impact on my family. And, my family always wins. Therefore, I am not the travelling business roadshow I have thought about being. I go to two tradeshows at the most each year and I choose the ones close to home where I can be in and out with the fewest days.

I don't want to sound like I am a supermom or that I'm putting down others for their choices, but, I know what a toll my business takes on my family at times and I know that others are doing far more. At a certain point, you can't help but crash and burn and along with it goes your reputation - either personally or professionally.

My husband is living (thankfully) proof of that. With his work and church responsibilities (he's a Bishop for all you LDS scrappers), he burns the candle at both ends and through the middle sometimes. He crashed and burned in a big way and will spend 4-6 weeks in the hospital learning to walk again thanks to an immune system that went out of control. The doctors agree that perhaps he would not have gotten AS SICK as he did had he not been so fatigued and worn-out. No one knows for sure, but it's been a big wake-up call. At a certain point, your body says it's had enough.

I worry that some in this industry are headed towards a similar type of crash. Maybe it's time to cash the reality check and re-assess priorities. I know we have done this in the past 2 1/2 weeks and in some twisted way, it's been good for us. I think we'd all like to do everything we want to do, but it's not always the best path to take.

Life lessons are sometimes learned the very hardest way possible...

Cows

I've mused at length about whether or not there is money in digital for the traditional retailer. As I've said, I think we'll get there to SOME degree, but I don't think it's the cash cow that we are being told it is by some in the digital industry.

Yes, there are purple cows out there that will cross over from digital and be a successful money-maker for traditional, but I think they will be minimal and I don't think we've talked about it (together - both traditional and digital) enough. Things like printing services or hybrid scrapping ideas will most likely be the things that do it. I'm still open to ideas and watching with interest. I'm not against the "tradigital" store model, I just don't see how it can be done, yet.


Now, let's talk about another cow analogy. You've probably heard the phrase, "Why buy the cow when you can get the milk for free?". Usually, this is applied to *ahem* a different situation. But, I'm going to apply it to the digital industry because there is way too much free milk in it!

I have heard this from a couple of people: "I have all the digital scrapbook stuff I could ever need and I've never paid a penny for any of it!" I have quite a few freebies myself. It's not hard at all to find freebies - shoot, there are whole blogs and sites devoted to rounding up digital freebies. I bet that many digital scrappers have more that they got for free in their digi-stash than stuff they actually paid for. As I said, "Why buy the cow when you can get the milk for free?"

I understand the reason for digital freebies. Each digi designer assumes she'll get a following of paying customers if she gives them a sample. I can understand that. The traditional industry did that a lot in the beginning, too. However, here's where it goes bad. If a traditional scrapbook company gives me a small kit to try their products. I can only use those products ONCE. If I want more, I'll have to pay. But, if a digital designer gives me a free kit, I can mix up those elements and combine them with other free kits from other designers and have endless use of the one free kit I got. And then, most likely, within a couple of weeks, another freebie from that designer will show up. Some designers are giving away half their stuff. Why would I ever need to buy anything?? Digital scrappers don't ever use up their stash. They just use it over and over in different "recipes" for different looks.

On top of that, we have the digital divas who aren't in business. They make stuff for themselves and then post it on their blog for anyone to pick up. That's different from the traditional side of the industry. A traditional scrapping mom at home can't dabble in stickers or patterned paper and then give them away to anyone who wants some. The cost is too high. But anyone who can use Photoshop can make digital scrapbook products and giving them away is as easy as having an account at 4shared.com.

An individual designer might be thinking she's building her business by giving away freebies all the time. But when you look at the COLLECTIVE impact of ALL the digital freebies floating around out there, it's just contributing to the overall milk surplus. A surplus is bad - it causes prices to drop. The same thing happened in the "dot com" era in 1999. Businesses set up shop on the internet and gave it all away for free assuming that at some point, they could get their readers to "pay for play" or that some bigger company would come in and advertise with them or buy them. It didn't happen and a lot of people lost their shirts over it and the stock market crashed. Internet users got used to finding it all for free and when they were asked to pay, they didn't see value in paying for something they were getting for free.

Someone once told me, "That which is free is cheap". Cheapening your designs by giving them away may not be the best business strategy. Especially when the field is crowded and the herd is too big and the milk buckets are overflowing. Maybe it's time for a change of strategy. Give out samples, but not whole cartons of milk. Otherwise all the dairies will go broke when no one can sell their milk.

Okay, I'm done with the cow analogy...

Okay, it's October so I've made an Executive Decision...

The hanging Christmas Decoration in the Playroom STAYS! I tried all year to get it down and put it away, but at this point, there's no point in even worrying about it!

At least the tree got put away last year...