Too Bad Everyone Doesn't Have to Own a Business at Some Point

A local plant nursery near me just announced they are closing.  It's too bad because they were the place you could get the really COOL plants for your yard - not just the standard stuff you can get at any big box store.  They will be missed.

But, the article in the paper had a comment from the owner that made me have flashbacks to the scrapbook industry. The owner said that they were losing money because consumers were buying their plants at the big box stores and then coming to this nursery for advice on planting and caring for them.  The consumers knew the big box store employees didn't know what kind of fertilizer worked best for a Japanese Maple, but they knew that this independent nursery did.  They dragged all their plant issues and dying plants into the nursery for advice but left without spending a dime.  

Shame on consumers.  I really wish that people would but themselves in the shoes of business owners.  If you don't want to shop there and pay a little more for the local retailer's fine products and experience, that's your choice.  But, shame on you for buying "cheap" and then using the expertise of the independent for free.  I have yet to run across a business who can exist by giving out free advice.  

I can't tell you how many times this was an issue in the scrapbook industry - and probably still is.  Consumers would come into their LSS and demo every tool they could get their hands on and then run to the big box store with the 40% off coupon and buy the one they wanted.  Those same people then act shocked when their LSS's started closing all over the country. 

I have often said that a retail business is not a charity.  They can't afford to give you free crop space, free advice, free demonstrations, etc. so you can go spend your money at the store that doesn't really offer any of of that.  

I know everyone is looking to save a buck these days, however, it's unfair to use a small retailer for information you know you can't get where you purchased your products.  Coming in to ask advice for a $200 cutter you bought somewhere else and then feeling "justified" because you walked out with $7 in paper (and therefore bought something, after all) just isn't nice.  

Put yourself in the shoes of that owner who has invested about everything they can give into their LSS before you spend half an hour playing with their tools with a 40% off coupon in your purse.  

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.  

Scrapbook Industry 2010

I'll admit that I have pretty much ceased my scrapbooking.  I cleaned out my studio and have a huge pile of scrapbook paper waiting for me to drive it to the local children's hospital.  My paper crafting is relegated to the occasional card or tag.  I don't see myself doing traditional paper scrapping ever again.  I do most of my memory preservation with digital scrapping and print it out in photobooks.  In fact, I have my own photobook company now.  

I rarely purchase scrapbook supplies anymore.  The largest local scrapbook store in my area went out of business this year after more than a decade.  I stopped by Michaels today because I needed some paper for a project for the teenage girls at my church.  We are making these cute gum advent calendars.  I was saddened by the lack of selection of Christmas papers.  There was about 10 different ones and none of them very interesting.  It was sad that there really wasn't any place else to go for a better selection.  

Is the scrapbook industry dead?  No, it's not.  Has it contracted significantly?  Yes, it has.  The result is being left with whatever you can find in your area rather than the freshest fun stuff hand-picked by an independent scrapbook store owner based on what her customers are telling her they want.  

Does that mean there is room for new scrapbook stores because so many places are left without one?  No, I don't believe that's what it means.  Although I'm sure there are some who are sort of new to the industry who believe that.  It's not that many areas don't have stores because no one has thought to open one.  Many areas don't have stores because there just isn't enough business anymore to support one.  

I have had the occasion in the last month to correspond with two people who were looking into opening or buying a scrapbook business.  Both asked my opinion based on how involved I have been in the industry.  While I don't necessarily participate in a business way in it anymore, I have paid attention to what has been happening to scrapbooking.

I get the feeling that the closing of so many retail stores has helped the ones that survived.  Although their customers are having to come from farther away.  But, as one store closes, another picks up some of those poor scrapbook retail orphans.  But I also get the feeling that the new influx of customers just helps them hold steady.  They don't really grow as a result of someone else closing.  They just replace customers they themselves may have lost.     

I am also convinced that digital scrapbooking and photobooks continue to take a tremendous bite out of the traditional industry.  I was walking through Michaels today and heard two women discussing how no one makes scrapbooks anymore because they don't have to print their photos.  They were just a couple of shoppers - no one special.  I was sort of amazed at their insight.  They are on the right track.  There's no compulsion to take care of that roll of film sitting on your kitchen counter.  And, for me, printing THEN scrapping was more time consuming than scrapping THEN printing as I do in digital scrapbooking.  

So, as I corresponded with these women who came to me, some thoughts emerged regarding the industry and how you can tell that it's probably not a good idea in most cases to dump a lot of money into starting a business.  Does that mean you shouldn't start a business?  No.  But, you should proceed with caution and with money you can afford to lose.  It's advice I've actually been handing out since 2002.  

Martha Steward said that if you only seek the advice of friends when you're about to launch an expensive business, you're on the wrong track.  Of course your friends will agree that it's a great idea.  What else are they going to say?  They have no skin in the game so they are totally supportive of whatever you want to do with YOUR time and YOUR money.  I daresay, though, that most wouldn't give you a minute of their own time or money to help you.  Suddenly, it may not seem like that good of an idea if they have to put something up.  And, despite what they say, your own friends will often never spend much in your place of business.  I've seen that time and time again.  They sort of expect the big discount more than they want to help you pay the bills.  You simply can't build a business on the promises of friends.  

Seeking the advice of someone who will challenge your idea is the best thing you can do.  I will challenge your idea to enter the scrapbook industry.  I figure one of two things will happen.  I'll either make you SO ANGRY that you set out to prove me wrong and you'll work your rear off to make sure I see that YOU can be successful (which may actually result in your success), OR, you'll get scared and walk away.  Either way, you'll probably win.   Retailing of any sort isn't for wimps and the scrapbook industry is an especially challenging place.

Consider the following:  

• There was once probably a dozen consumer magazines in the scrapbook industry.  There are now only a few left and they are very thin due to a lack of ads
• At one point, there was a dedicated tradeshow for the industry.  Now, there is only CHA and the scrapbook portion of it seems to be shrinking in size of booths, number of exhibitors and attendees.
• There have been instances of companies debuting products at CHA and then cancelling all orders immediately after the show and closing their business.  That's not good when you can get enough orders at the biggest show there is to move forward.  
• There were 4-5 trade magazines at the highpoint.  There is now one and it's not that good.
• When I started ScrapBiz in 2002, I worked with probably half a dozen distributors.  About half of them have now closed.  
• Support organizations like ScrapBiz have all but disappeared with just a few left
• Once popular Creating Keepsakes University is non-existent as are many of the expos in many markets
• The big box retailers, who carry what's selling, have down-sized their scrapbook sections or now offer very generic, cheap products in their aisles.
• Most of the direct sales companies dedicated to scrapbooking have disappeared.  I get the feeling the ones left are limping along.  
• Lots of very popular names in the industry have added digital scrapping to their offerings.  Most retailers "pooh-poohed" the idea of digital scrapbooking and paid a price as lots of their customers left to pursue it and never darkened their door again.  

You can't blame the economy.  The scrapbook industry started to decline in about 2006 - well before the economy started to tank.  Do I see it roaring back?  Not really.  Do I see it continuing to exist?  Yes.  It's just peaked.  

Therefore, I caution anyone looking to start a business in it to do their homework (as I always have).  Don't ask your scrapbooking friends if they think opening a business is a good idea.  Instead, hunt down former store owners in your area and have an honest chat with them about why they closed their doors.   Run the numbers with a realistic look at how much patterned paper you'd have to sell to break even.  Look at your finances and decide of you can afford to lose the money you put into your business.  

Then, either proceed with your plans to prove me wrong or walk away and save yourself the headache.  

The End of an Era

I got a postcard in the mail today telling me that the 14 year old scrapbook store north of Seattle is closing.  My gut tells me that if they can't make it, no one can with a bricks and mortar store.  They are in a great location - right next to the huge regional mall and they have tripled in size in the last 9 years or so.  The owners say they are retiring - which I believe because they are in the right stage of their life to want more freedom.  Honestly, though, if you have a "cash cow", you either sell it to retire or hire a really good manager so you hardly have to be there.  Closing is a last resort since you don't get any financial benefit from doing that.  

About a year ago, just before CHA, they sent out a bizarre email to all their customers defending the store from a comment made by a customer.  It was odd because, of course, 99.99% of the people who received this email didn't hear the comment.  Maybe they thought OTHERS were thinking what this customer said.  Apparently, a customer came in just weeks before CHA and pronounced the store, "EMPTY" and walked out.  The owner got upset and sent out this email telling everyone that the store wasn't empty on purpose - they were gearing up to order a bunch of new products at the upcoming CHA show.  It might have sounded reasonable to the average scrapper but it sounded like "spin" to me.  Knowing what I know now, I believe it WAS "spin" for a store that was limping along.  In all the years I have lived her, I have never seen that store feel like it was empty.  But, the last few times I have been in there, it felt that way.  

They really gave it a good run and I'm sorry they're closing.  I have been very critical of LSS's over the years but this one always seemed to shine while others failed.  They added some digital elements.  They added a scanner for photos.  They had great classes and fresh products.  The staff was friendly and helpful.  I never had any criticism for this particular store.  In fact, I believe it was the reason so many other smaller stores in the area failed.  No one else could match their selection so scrappers would often just head there first.  

But, their closing also re-affirms my belief that a bricks and mortar scrapbook store is not for the faint of heart.  Even the strong can't always survive.  

Starting a Scrapbook Business? There's still time to get our book!

We have FIVE THREE TWO ONE!!!    ALL GONE!  ScrapBiz Business Start-Up Guides left and we are selling them for the fantastic price of just $39.95 plus shipping.  The guide has been the "how-to" book for hundreds and hundreds of women who have started successful small businesses in the Scrapbook industry since 2002.

This book normally sells for $99 but we are letting the last five go for less than half that price.  We don't know if we'll ever sell this book again since we are closing ScrapBiz on December 1.  So, if you're thinking about starting a scrapbook business of ANY type or could just use some additional insight, hurry and get this book before it's sold out!  

Our members have referred to this book as their "Business Bible".  It's the only book specifically aimed at starting a home-based or small retail business in our industry.  You can see an excerpt of it HERE and read more about it HERE.

Click on the BUY NOW button and grab yours before it's gone!!!  There is only 5 ONE of them!

Learning From Donut Wars!

Recently, a new shop was opening near me. They had painted a website on the paper-covered windows intended to create an air of mystery. They had a big contest at their site about "what are we?" To me, the website totally sounded like a cupcake shop. They had a Facebook page with the same contest and to many others, it sounded like a cupcake shop. In fact, the hints they were giving made it sound like it was a cupcake shop where you could go in, choose your cupcake flavor and have it custom-frosted for you. It would have been a FABULOUS idea for two reasons:

1. There are no cupcake shops in this whole area. Cupcakes are HOT right now, but few places are selling them here beyond what you can get in a plastic clamshell with nasty Crisco frosting.
   
2. This is an upscale upper-middle class shopping area and people would have totally bought into the upscale idea of serving cupcakes at Birthday parties, showers, etc.
   

But, alas, the place turned out to be a DONUT shop. Which, did not fit the website name in my opinion. The URL sounded like more cake than donut.

So, my kids and I decided to check it out and see if the donuts lived up to the hype so we wandered over there the first day of their Grand Opening. We showed up in the afternoon - wondering if there would be any donuts left. But, given the fact that they stay open until 10pm, I assumed they would be making donuts all day long. There was not much of a line if you don't count the busload of elderly people who arrived just 30 second before us and took most of the afternoon to order.

I bought 4 donuts - two chocolate frosted custard filled, one german chocolate with coconut-pecan frosting and one Maple Bar. My total for 4 very average donuts was over $8. They put them in a brown box with a cutesty label on it that was sort of meant to be "signature" packaging since pink and brown are their signature colors. I think I paid $4 just for the packaging alone because what we got was 4 donuts I could have bought across the street at the grocery store for less than $4. And, to top it all off, my kids didn't get any custard in their donuts until the last 2 bites. They had skimped on the filling.

The next day was the annual 5K Race and festival in this area. We happened to park near this donut shop when we arrived about 7:45 am for the race. This was the second day of this shop being open and I kept an eye on the foot traffic as I sat in the car waiting about 90 minutes for the race to start. I didn't notice a lot of people going in and out. It was surprising given all the hype.

My husband went to warm up for the race and came back with a postcard he handed to me. Apparently, the book store at the other end of the parking lot just opened a branch of a very famous donut shop from Seattle where they had previously had a coffee shop. They were handing out postcards for free donuts. So, after the race, we went and got 4 donuts. We didn't use our postcard and paid $6 for 4 donuts. Still too high in my opinion, but they were much better than the other place and they had the "brand name" behind them as well as features on the Travel Channel and the Food Network. I immediately thought, DONUT WAR!!! You can't tell me that the legendary donut shop isn't going to throw their name and reputation around against this upstart across the parking lot. It will be interesting to watch.

So, what's the lesson here? First, if I was doing a big "what are we?" promotion and everyone kept guessing I was a cupcake shop and they were EXCITED about the fact that a cupcake shop MIGHT be opening in our area - I honestly might have taken a step back and thought about changing my plans. Listen to your customers! People were THRILLED with the idea that it might be a cupcake shop. How many, including myself, were disappointed to find out it wasn't?

Second, I can get donuts at 5 grocery stores and this other new "legendary" Seattle-based donut place all within about a 10-15 minute walk from this donut shop. And, none of them are going to charge me $2 for a custard filled donut. Actually, this new shop sits in the middle of a parking lot between the high-end (similar to Whole Foods) market with lots of donut and pastry choices and the legendary donut place in the bookstore. So, it's literally one of three choices from one parking lot.

How many places can I get cupcakes? ZERO. Okay, I can get them at the grocery store, but they are prepackaged - nothing custom. How many times will I pay over $2 for a donut? Never again. I can't believe that I'm alone in that thought, either. The donuts weren't bad, but they weren't the best I've ever had, either. Perhaps they will develop their donut menu over time to include outrageous things like a bacon-maple bar you can get at VooDoo Donuts in Portland. But for now, they are just a cute donut place selling donuts and I hope they can stand out in the crowd enough to make people want to pay the high price of their donuts.

The scrapbook industry lesson is similar. You need to really evaluate how many other places around you are selling what you sell and try to figure out something of value to the customer that sets you apart from the others. Cute packaging isn't enough anymore. People want VALUE and UNIQUENESS. If you find yourself among lots of others doing the same as you, find that thing that makes you unique! Do you provide better customer service? Have unusually themed crops? Have custom papers for the local area? Stay open later? Can provide lots of "fan comments" about your store that will make others want to come check it out? What's your "hook" that will make people choose you over someone else? It's got to be more than cute colors and decent donuts - especially decent donuts that are higher priced than other decent donuts in the area.

"I'll Be There For You..."

Remember the theme song to the show FRIENDS by The Rembrandts? What's funny about starting your own business is that usually, as you start talking about it, your friends are SO SUPPORTIVE of the idea. They'll say, "Go for it!" or "I'll support you 100%!". They will cheer you along and tell you that you've got the talent to do whatever you're thinking of doing.

But, you know what happens when you finally open that business? Your friends are often nowhere to be found. There is an old saying that comes from the bible that roughly says, "No man is a prophet in his own country". That is true at times. I often find that those who were your biggest supporter during the planning stages of your business, don't take you seriously when you actually launch the business. They will often treat your business lightly and sometimes even expect a "friend discount" (translation - WHOLESALE PRICE).

It's sad, really, because you would hope that those closest to you would be your best customers if they are interested in whatever you're selling or doing. You would also hope that they would be your best customer advocates and tell others about your new business.

So, the lesson for today is that if you have a friend who owns a business - be it a scrapbook business or a plumbing business - use them. Put your money where you mouth is and show them that you really DO support them 100% by becoming one of their customers.

Twitter Wisdom

This was re-tweeted by someone I follow today. It's very sage advice:

Never fall in love with an idea until you've crunched the numbers.

One of the biggest failings of retailers in the industry, in my opinion, is that too many of them made the decision to open a scrapbook store without ever thinking for 5 seconds about whether or not it made any financial sense. I have been begging people for years to think on the profitability of a store rather than the "fun" of owning one. You can't pay the bills with "fun" and when the bills pile up, the fun is over!

• Stats, Math and Scrapbook Stores
• Do the Paper Numbers Add Up?

There is a really nice European shopping street-type area near me surrounded by upscale neighborhoods. The area opened about 5 years ago and many of the leases are coming due this Spring. Guess what's happening? Many of the businesses are closing leaving lots of empty space. It's still a very nice area, though, and it makes me a little sad to see so many shops and restaurants close.

I would love to see a little upscale paper craft store go in like a Paper Source store but with more scrapbook products. But, then, when I crunch the numbers in my head and realize that 10 scrapbook stores have come and gone in my area in the last 8 years, I know in my heart that it wouldn't make any sense.

But, a girl can still dream, can't she? The problem is that many dream without thinking it through and would do it anyway.

One Day Retailer Event

The Creative Leisure News had a bit yesterday about a great opportunity for retailers who are in the area of GASC. I knew this was being planned and I'm glad it came together.

If you are a retailer in the Arlington area and plan on attendting GASC, you can't go wrong by attending this one day special event just for you! Tamara and Beth will surely have some fabulous classes to share with you!

SEMINARS. F+W Publications is sponsoring the Great American Retail Conference in Arlington, TX on June 3, the day before the Great American Scrapbook Convention. The one-day seminar will be presented by Beth Mauro, former editor of Scrapbook Retailer and CNA, and author/retail consultant Tamara Lipori. Sessions will address trends and strategies for generating store traffic during a tough economy. For info, email Beth at beth.mauro@fwmedia.com. For info on the Convention, visit www.greatamericanscrapbook.com.

Don't Blame the Economy - we were hurting before that....

I Remember When, the direct sales company that ScrapBiz grew out of in 2002, quietly shut it's doors a couple of days ago. It went without the drama usually associated with the demise of the industry's direct sales companies (Scrap in a Snap, Leaving Prints and TLC all went down in scandalous flames). But, the company was not without it's troubles through the years. According to wholesalers I have worked with for many years, paying bills was often a problem. Still, many consultants are now left without a business. Which was part of my beef with these companies in the first place. It's not really YOUR business - if they close, you close.

But, that's not my point here. My point is that many are blaming the economy. That may have had SOMETHING to do with it - as in it was the proverbial straw that broke the camel's back. But, the scrapbook industry has been in trouble for more than just this past 18 months that we've been in a recession. So, the economy can't be totally blamed.

Some of the business members at ScrapBiz report that their customers don't seem to know there's a recession going on. They are still buying like crazy. Others are reporting only slight declines in business or that business is flat. Both aren't bad given the tough economy.

Our real problems started years ago and the economy was the final straw for some. The problems are simple but the answers are complex. I just taught a class at PMA that covered part of the reasons why the industry has suffered the last few years.

1. Consider what a scrapbook store looked like in 1999 - paper, albums, adhesives, embellishments, tools. Then, consider what the scrapbook store of 2009 looks like - paper albums, adhesives, embellishments, tools.
2. Consider the changes in home technology since then: digital cameras, photo printers, faster computers, better scanners, photo books, color printers, wide format printers.

The problem here is clear - scrapbook stores failed to keep up with the evolution of technology and what it meant to memory preservationists. The new tech brought new possibilities for taking photos and preserving memories and stores ignored it all but customers didn't.

1. Consider the scrappers of 1999 - pretty much those who did and those who didn't. Scrapping was pretty much just ONE type of activity
2. Consider the variety of scrappers in 2009 - hybrid, traditional, card makers, paper crafters, digi scrappers, photo book makers, etc.

The problem here is once again that retailers failed to adapt. We have SO MANY types of customers in our industry and yet, most stores cater to ONLY the traditional scrapper. You can't shut out a large percentage of potential customers and thrive. I seriously get amused when a store owner will look me in the face and say, with all seriousness, "I don't have ANY customers interested in digital scrapping." Well, you DID have those people and they already left. And, you DO have some who are dabbling in it or thinking about it and are in danger of leaving the traditional industry. What you're saying is that you don't offer anything to those people so they don't come in.

And finally, knowing that some will drop out over time (or maybe we didn't have the business sense to know that) and that the average life-cycle of a craft is 7 years, we did NOTHING to invite in new scrappers to replace those who left either because they got bored or changed their style.

Struggle, struggle, struggle.... now, add a bad economy on top of that and it means death for many retailers.

That's not to say that you should be all things to all people. But, if you know you have a strong position as a traditional retailer, then you need to market the heck out of that angle and scratch and claw for every traditional customer you can find. You can't sit back and wonder where everyone went and then blame the economy. If you add tech to your store, then you need to like-wise market heavily the fact that you are a 21st Century Scrapbook Store and you want to invite your former customers back to see what you've got.

Either way it's not going to be easy. But, it CAN be done.

Video Business Tip: Don't Worry, Be Happy!

Okay, I have a web cam and I know how to use it! I'm going to try to give you at least one quick business video tip a month.

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!

Taking Shelter from the Storm

WOW! What a week it's been! I think even those who are doing okay because they have a solid home loan and no debt (there are a few of us out here) are feeling just a little queasy about what the stock market's doing.

If you're a business owner, you're probably feeling REALLY queasy about the whole thing. Some store owners are reporting that their sales are sharply down. Retail sales reports came out today and the news isn't good over the whole retail world.

So, are you standing out in the storm all by yourself? Are you wringing your hands and wondering what to do next? You shouldn't be alone at a time like this - you should be looking for a community shelter full of others who understand and can help.

I think that if there was EVER a time in the history of the scrapbook industry that retailers needed to band together, it's NOW. We need to stand together in the storm and collectively figure out how we are going to adapt and grow.

Last week I received an email from business book author Jeffrey Gitomer (fun fact- Ali Edwards' sister is his girlfriend). He suggested that there are two ways to look at change. Which side are you on? I would say that I fall on the bright side of change and especially love that CHANGE IS OPPORTUNITY.


On the dark side:
Change is eliminating.
Change is terminating.
Change is hiding or avoiding truth.
Change is disappointing.
Change is scary.
Change is morale busting.

On the bright side:
Change is refinement.
Change is growth.
Change is movement.
Change is acquiring.
Change is upgrading.
Change is opportunity.

Well, CHANGE is happening - in our industry, in our economy and among our customers. It's caused a lot of failure in the scrapbook industry. Some store owners may not even have known how to bail the water out as their boats sank.

A business group is useful in that you have a group to help you start bailing the minute you see the water coming in. They can't keep you from sinking altogether, but they give you a better chance of NOT sinking.

There are several business groups in this industry that can help you weather the storm of change. I'm biased so I'll just say that ScrapBiz is a great group to join. We have been talking a lot this last couple of weeks about what's going on and how things are selling. The consensus is that customers are buying consumable supplies and using their stash. The Professional Scrapbook Retailers Organization is another group to join. They don't yet have the feeling of community that other groups offer, but they are pumping out lots of information for retailers to help them stay afloat. Another group if you are a bricks and mortar store is the SMART Group. They, too, can help you find shelter from the storm. There are other groups out there, too, that can offer you some help during these challanging and changing times.

Some retailers might think that they can't afford to pay to join a group like this. But, I would say that you can't afford NOT to. Time is so precious for most retailers and these groups can save you a lot of time by providing answers to questions and information nearly at your fingertips. Also, the peer to peer networking can be invaluable to your business. Many retailers in our industry have resisted working with their competition for years. ScrapBiz members have always worked well together despite this.

But, now we need to put our collective heads together and figure out Phase 2 of our industry. When this industry was born in the late 1990's, no one could fathom anything but the printed photo. The internet was just a few years old and computers were way too slow to make and print out a high-resolution image. Customers wanted the fun papers and fancy stickers - it was a decorative diversion from plain photo albums.

Now we have online stores, digital photos, digital scrapbooking, home photo printers, large format printers and custom photo products. Yet, many retailers are still plugging away with card stock and stickers in a world where customers want solutions, and not JUST products, for their photos. In the words of Jerry Seinfeld, "Not that there's anything wrong with that", except that you may not have done anything to adapt to the change and you may have paid a price for that. Every store doesn't have to adapt, but many should. You can't ignore the technology that has crept into our industry. Many of these groups are talking about it and trying to figure out how to use it to our (and our customers') benefit.

If you are a lone retailer in the scrapbook industry - be that a home-based business, an online store, a custom scrapper or a bricks and mortar store - I would invite you to take a look at joining a group like ScrapBiz to take shelter from the storm with others who understand and can help.

Scrapbook Store Primer: How NOT To Do Business

I really think I need to write a book of how NOT to run your business. I hear more stories than you can imagine. Not every store owner is doing it wrong. Many are doing it right. And, that's why they are probably still in business after more than a few years.

But, I do hear lots of stories about businesses like THIS recent one where I can clearly see the writing on the wall for that store. I think engaging your brain is a skill many people lack.

So, here's today's entry in the "What Not To Do" Files:

A ScrapBiz member recently had a reporter and photographer come to her crop to do a story on the local scrapbooking scene. She was THRILLED to have them there and asked at ScrapBiz what she should do. I suggested she give her some products and make sure she had a good time at the crop. The reporter had such a great time that she asked to come to future crops - just for fun.

At the end of the crop, the reported confided in this ScrapBiz member a story about the story. She said she had contacted a local Scrapbook store and asked to come to her crop to do a story and the store owner insisted the reporter pay for the crop. The reporter let her know that she wasn't interested in scrapping, but the store owner was insistent that if she touch any scrapbook products that she would have to pay. The reporter said, "I promise, I won't scrap" and the store owners reply was very lukewarm, "Okay, I guess." And, the reporter didn't bother to show up.

Where is my "DUH" board???? A local newspaper wants to give your business publicity in your community and all you can worry about is that the reporter might not pay for $5 worth of products she might use? So, the cost of the story WAS $5 (or whatever the price of the materials), but what was the cost of NOT having the story run about your store? Probably much, much higher. The store owner could only see what she was going to LOSE by having the reporter come and didn't think about what she might GAIN.

I would venture to say that when the story about this home-based scrapbook business runs, the store owner's head will split open and she'll be angry at the home-based scrapbook business for hurting HER business. Really, though, she should be angry at her own arrogance and stupidity for letting a great opportunity for free publicity slip through her fingers for the cost of some paper and a seat at her crop. If the store fails, I assume she'll cast blame and point fingers. But really, it's clear where the blame probably lies...

Add a little excitement

A grocery store- not very exciting, is it? Well, my local Albertson's mixed it up a bit and managed to at least interest me. They remodeled. Now it feels like a "Spa" Grocery Store - all calming with hanging lights and interesting, warm flooring.

But, then they added a whole aisle of International Foods! Now that caught my attention! I can get British, Polish, German and Indian products now. We're not talking as in "here's some Ragu - we're calling this the 'Italian section'." I'm talking, "here are some jars of stuff straight off the shelf in India!" I can buy interesting curry sauces from India, real German red cabbage with Apples and Golden Syrup from England. That's cool because once in a while, I want something completely different!

Then, they added a "Chippery". They are now making fresh potato chips right in the store. I'm not much of a potato chip person, but these chips are GOOD! Yes, you pay more, but when have you ever had a potato chip that was made 3 minutes earlier? Talk about FRESH!

I'm not likely to fill my cart with Polish food every time I'm in there and I will probably only buy the fresh potato chips once in a while. But, the point is that the stale, boring grocery store added some new products and services that made me sit up and take notice. Another local store added a "nut bar" with all sorts of roasted nuts and still another added an olive bar with a large variety of olives.

Adding unexpected products and services can delight your customers. They will see that you are committed to "keeping up" with the changing times. Not every customer will want fresh roasted nuts, but every customer will take note of the fact that it's there and it's a new idea!

The face of retail has changed in the last 5 years. Customers want more options. Scrapbook retailers should look at their stores and think about ways to add more options in the way of products and services. Adding technology such as scanning services or digital scrapbooking programs that make financial sense can be a way to tell your customers that, "Hey! We're keeping up with the times and we're committed to offering you more!"

Death with Dignity...

Since my post yesterday about the store owner who is desperately begging customers for cash and used goods to stay open, I have reflected on how many "we're closing" messages I have seen over the years.

Let me just say that "Death with Dignity" is a noble thing not practiced often enough in the scrapbook industry. Perhaps it's because those who refuse to go down without a 1000 word "woe is me and shame on your for not shopping more often" email message to all their customers, lacked the skills to run a store in the first place. They made business personal. You can't do that and retain your dignity and professionalism.

One recent story I heard about a struggling store contained this exchange with a customer, "Please don't use your credit card - it costs me too much in fees." The customer only had a credit card and pressed to use it anyway. Another person blurted out, "At least you could OFFER TO PAY THE FEES!"

There have been other shocking ploys to stay in business that I have seen - all of them just looked ridiculous and desperate. Not every store closes with such drama and "flair". Many of them just quietly liquidate and close as professionally as possible.

It's sad when any store closes their doors. But it's even sadder when an owner feels the need to whine, beg, plead, complain and blame as they lock the doors for the last time.

Sometimes you just need to put on your big girl panties and suck it up and deal with it. Business is hard and you have to have a thick skin to deal with it. It's not always fun and games. Your customers don't owe you survival and you have no right to succeed. Those are the hard facts of the business world.

Starting a scrapbook business, start a scrapbook business, scrapbook business

Synergy

Synergy is the term used to describe a situation where the final outcome of a system is greater than the sum of its parts.

We have a whole lotta Synergy going on at ScrapBiz. If you want to see how the scrapbook industry could work together to make ourselves better as a whole industry, you have to look no farther than ScrapBiz. The result is that while many retailers are struggling, many ScrapBiz members are reporting growth. I firmly believe it's because of the support and synergy they get from ScrapBiz. I'm not talking about ScrapBiz as in "Kim Guymon", I'm talking about ScrapBiz as in our wonderful savvy business members who have formed a sisterhood of scrapbook business support.

Some examples:

• Members ordering products from member manufacturers in HUGE quantities
• Members working at consumer expos for other members
• Members selling each others products at shows
  
• Members designing and/or packaging products for other member businesses
• Group buys and order splits to make sure you have a huge variety but not too much of anything
• Member businesses merging with or buying other member businesses
• Members critiquing other member's sites or products
• Members becoming partners with each other and starting new businesses together
• Members placing group ads in Magazines for discounted prices (did you see our ad in the new September/October Memory Makers?)
  

Really, it doesn't matter where you are in your business. Our active members who have been around for a long time STILL say ScrapBiz is an important part of their business. New and seasoned members both find great support and information there.

We have options for people who want to start a business as well as options for people already in business. CLICK HERE to see how you can become part of this amazingly synergistic scrapbook retailer group. I daresay there isn't another group in the whole industry as active and with the level of support you'll find at ScrapBiz.

Lessons Learned

THIS was in our local paper today. It's always painful to hear of someone having to learn lessons the hard (and expensive) way. Inventory management, location, marketing, etc. are all absolutes when it comes to running a small specialty boutique like a scrapbook store. But, often, those things are overlooked or largely ignored ("location isn't really THAT important") to follow a dream. Chasing your dreams is great, just make sure you put on your work boots, not your slippers, to run after them.

You can't ignore the realities of business ownership. They will catch up to you eventually. And, for these two shop owners, they finally did.

Annoying Customers is NOT a Winning Strategy

I know this post has the potential to be controversial, but... I'm gonna say it anyway!

DOGS and CATS in a scrapbook store... (I can feel some of you fanning the flames already).

Two local scrapbook stores in my area have resident dogs. I stopped going in to both. I like dogs, just not in the scrapbook (or any other) store. Here's what happened:

Store one (now closed): They had a cute smallish dog (about 20 pounds) who was either darting out of their office just a couple feet from the front door when you came in OR, it was locked behind a baby-gate in the office and whined at you when you came in. It was a friendly dog. But, it was always underfoot or yowling to get out.

Store Two: a new store in my area. The first time I went, there were two lap-dogs penned in a baby gate pen right by the front door. They were friendly enough - too friendly actually. They yipped and yapped every time the door opened. Then, every time I came into view while I was shopping, they continued to whine for my attention. I found it VERY annoying.

Now, the little girl up the street from us is DEATHLY afraid of dogs of any type or size. Whenever a neighbor comes to the bus stop with their dog, she practically climbs a tree. So, her mom taking her into a store with dogs would be out of the question.

I'm allergic to cats. I can tell you have a cat the minute I walk into your home. I don't even have to see the cat. My stuffy nose tells me instantly you have one. I would get the same reaction in a store with a roving cat.

Most of you store owners who have pets in your scrapbook store would immediately and defensively tell me that your customers LOVE your pets being in there and that you keep them under control.

I'm sure many of your customers DO tell you that they love your pets. But, how many of your customers DON'T love your pets? Do you know? And, how many of your customers have stopped coming to your store BECAUSE of your pets? Those people aren't as easy to measure...

What I'm saying is that given these economic times and the fact that making a profit in a scrapbook store is hard enough no matter what the economy is doing, can you afford to alienate ANYONE with your pets? Are the pets worth the loss of revenue? And, no matter what you think, you ARE losing customers over the pets. Those people will come in, see the pets and then express their opinion over them silently by not returning.

You can get the same reaction with music. I've been in stores where the twangy country or loud heavy metal has literally driven me right out the door. I often hear that Christian music annoys people to the point they leave the store. I am always amazed when a store posts political or religious statements - both very polarizing swamps to wade into. You might be thinking, "Too bad! Get over it! It's MY business!" Yes, it is. But customers pay your bills. Annoy enough of them and you go broke.

I'm sure we are all aware of the Dixie Chicks and the controversy they created by criticizing American policy overseas. Country Music fans are largely conservative flag-waving patriots and they didn't take kindly to what was said. The Dixie Chicks were "punished" when they returned home. Former fans voted with their dollars and refused to buy their music or go to their concerts.

While trying to fill their Chicago concert (and not doing very well at it), they asked basketball legend, Michael Jordan, a fellow Democrat and friend of theirs, to help them sell tickets. His response was beautiful. He said, "No". His reasoning was that Republicans buy his tennis shoes just as much as Democrats do and he couldn't risk alienating half of his customers.

I am of the opinion that you should cater to the average person when you are a public business. Work hard to make as many people as possible feel welcome in your store. The last thing you want is for someone to leave your store and tell all their friends, "They have a DOG in there!" You'd rather they left your store and told their friends, "They have the BEST STUFF!"

Make your store inviting and friendly and leave your controversial pets, music and political or religious (unless that's your niche) opinions for your private life.

Anything You Can Do, I Can Do Better... I think.

I blogged recently about the 5K race my husband ran. The town center area it was in is very new and upscale. It's been open about 3 years now - just long enough for some of the leases to expire. The place is stacked with boutique shops, professional offices, a small chain or two (Pier One, Quiznos, Starbucks, Kits Cameras) and a ton of restaurants. You can get everything from Indian to Thai to Mexican, Italian, etc. there. There are a LOT of restaurants. What the area lacks, though, is a draw in the evening BESIDES the restaurants. There is no theatre - movie or otherwise - and most of the shops are closed up by 6 or 7 - even on the weekends. And, there are SO MANY restaurants that there simply isn't enough of a lunch crowd to fill them. Unlike an outdoor mall near the Microsoft campus where lunch is "standing room only" every day in the restaurants in the area, there just aren't enough dentists and real estate agents to fill the tables.

Couple that with a lack of much in the evening to draw the dinner crown and you've unfortunately got a poor place for a plethora of restaurants.

So, as the leases come up (I'm assuming), the restaurants are shutting down. The first to go was my favorite - Cosi. It's the only one in the area. Mark and I would often meet for lunch there. But, it was pretty empty no matter what day we went. It shut down and turned into an Italian bistro. The next to go was Zinnia. It was a "chick place" for lunch and tres expensive for dinner. We had lunch there a few times - they had good Paninis with interesting salads. It's gone and it's currently morphing into Kafe Neo - a Greek restaurant (yum!).

But, I have to wonder what makes these two new restaurants think they can succeed where the others didn't? Did they really look at the street traffic at meal time? Or do they just think they're smarter than the previous owners.

This is not unlike what happens with scrapbook stores. Usually when one closes, another one someplace else might open. Not always in the same spot, but in the same area. For a while, it was an epidemic in my area. The minute one closed, someone else decided to open. Does the owner of the new store think the owner of the closed store was just not smart enough to run the business? Or, do they believe the story that they closed for "family reasons"? You don't close a business that is a cash-cow. PERIOD. If the store is doing well, you pay someone to manage it or sell it. People don't close profitable businesses.

I wish these new restaurants luck. I'm sure I'll eat at both from time to time. But, I hope that the new restaurants did their homework and have a compelling reason as to why they think they will succeed where the others didn't.

Bottom line is to do your research... Don't open based on YOUR desires or emotions or even the "you can do it" encouragement of others. Want, needs, desires and encouragers aren't footing the bill. I can't only imagine the debt these previous owners are stuck with. For example, a Cosi franchise is a minimum of $775,000 to open. Yikes...