Here and Now Sept 27, 2010

This summer was brutal in the jewelry retail business. Last year I sold off all my gold and managed a nice profit and most of all a substantial amount of hard cash to infuse into my business. Unfortunately I could not find any merchandise that would be not be considered "speculative". Truthfully I did not see a good outcome for the 2009 Holiday Season and decided to take a job with Montblanc. Despite slow times I was hired because of my experience. Mind you, you can hardly make a decent living working the bottom rung of luxury retail. I resigned from Montblanc and returned to my store in June 2010. You might think this was a bad move but with the way the economy is doing I was sure I was going to have to close my store if I did not come back. Before leaving i did put in place an effective "system" and my employees were reasonably capable but I've build my business based on personal one on one relationships with my customers and once I was gone my absence had a terrible effect on an ailing business.
Take note that at the time I left Montblanc I had produced well over 300k in sales for the 5 1/2 months I was there. I had written top ticket four of the six months there and had been assigned to direct "corporate sales". But I felt that I would produce the same amount of income for myself at my store, have the liberty to continue to be involved in my 11 year old daughters development and have the creative freedom a small business offers. Of course I have no insurance nor 401k plan. At this time the banks have all but eliminated credit but then again one must tread very softly when it comes to purchasing stock. I am being extremely conservative and only purchasing or manufacturing pieces with a higher turnover percentage. I am also working on an increased web presence focusing on my "Private Label" pieces and targeting my existing clientele. Unfortunately I predict a ten day selling season for Christmas and jewelry purchases will be dismal.
These are indeed trying times to open a business but a few weeks ago the government approved a 30 billion package stimulus for small businesses. This includes tax credits, other incentives and loans. Look up this information in the SBA website and exploit it as a funding source.

Chapter 4: Hardware

Hardware:

Well, this is where I would probably make a little money if I ever figure out how to get these companies to pay me for endorsing their products. If you've come this far it's because you are getting serious about your intentions to open a new business. So investing money into the following things I'm sure will pay off great dividends in your future. Take note that I originally posted this in 2008 and I have rewritten it in many places.

I know this is going to sound really obsessive compulsive but I really recommend you keep your schedule on computer program such as "Outlook" and be able to sync it with your cellphone or other portable device. The whole purpose of this constant planning is to keep you focused on the operation of your business. Get used to it!

Let's start counting:

You are also going to have to get an accounting program, more on this later. I recommend you get, or for the time being borrow a computer and I strongly recommend a laptop because this way you can take your work with you and start working on it wherever and whenever you get inspirational! In this age and market and with all indications that it will be even more essential in the future, technology is one of the biggest needs and expenses your business is going to incur. So make your technology expenses for equipment that you will be holding on to for at least 3-5 years ( I prefer 5).

I purchased a Compaq laptop back in 2001 and it was one of the best investments I ever made. On many occasions I felt I needed a desktop and added a docking station, two power supplies (one for home and one for work), flat screen monitor (first I had an old clunker), wireless keyboard/mouse, Data switch to make a network and a number of external USB stations for a number of peripherals to my trusty laptop. Last year I purchased a Dell Desktop and I made two mistakes. Don't take me wrong, I love my Dell, I upgraded it to 2 megs of Ram, added my video card to monitor two security cameras, wireless keyboard and mouse and a fax card…But…. My first mistake was getting the computer with a Windows Vista OS. It simply made me have to practically replace many of my programs and hardware….Not! I simply installed an XP program and despite warnings that my Dell hardware might not function everything did function correctly and I have had no other problems since. Including the installation of the Avermedia video capture card that is the heart of my security system. I guarantee that everything you hear about Windows Vista is true. Keep away from it! Note: I have begun to leave my computer on 24-7 and at this time I am evaluating the increase on my electric bill.

My second mistake was not getting a laptop (although I realize that I do need a desktop to serve as a network server and of course to run my surveillance hardware 24-7). My desire to justify the purchase of a new laptop drove me to push my performance and after six months I finally ordered my laptop which I haven't received as of yet!

Once again I went to Dell and spend over two months looking up the Dell site and trying to get the best price possible for the configuration I wanted. I finally called them up directly and made an offer. With tax and free shipping I got the laptop for a bit over 900 dollars. It might not have been the best price possible but I feel that getting the laptop at the moment I did was worth the extra money I might have paid.

I expect to have this laptop for the next 3-5 years and emphasized on Speed, Connectivity, Comfort, Portability and Components I would use in the future. I decided on the Vostro 1500 with a glare free screen (I took advice from their "Product Ratings" and most buyers regretted purchasing the "TruBrite" screens), a Dual Core 2.0 GHz processor, 2 Gig ram, 160 Gig 7200 rpm hard drive, blue tooth, N card and 2.0 build in camera and most importantly I got it with the Windows XP OS. The only component I'm not too sure about is the 2.0 Meg camera the unit comes equipped with but once again thinking of the future, some day I might just have to show a client one of my products instantly and just one sale will surely pay for the 40 dollar upgrade! OK, so now you have an idea of the equipment you should purchase now lets get to the root of why we should have this, let's look at some of the software you should be equipped with.

Update 09/2010: In the summer of 2009 I was looking for total mobility and purchased an Asus H1000 Netbook. I really enjoyed everything about this netbook to the point that I wrote an review about it. The only drawback it had was the size of the screen but the weight and everything else was amazingly comfortable. I added an HP L1710 screen at both my home and office for mobility and I felt I had a complete system. Unfortunately in February of 2010 in a moment of lapsed judgment I left my laptop bag in the backseat of my car and someone broke the window and stole it. I was fortunate that I have a iOmega 1.5 Tetrabite external hard drive and I perform regular back-ups. I had done a complete back up the night before.

Instead of reverting to the Vostro, which I still regard as the best laptop I have purchased, I still cannot stand it's cumbersome weight so I went shopping and settled for an Acer 1401. This Acer has an 11.2 screen, 250 Gig HD, and up to 4Gig of Ram that I immediately upgraded to. It came with a Vista OS and to my surprise unlike my previous post, the Vista OS worked quite well. I would think it had to do with all the updates that Vista went through. Instead of downgrading to Windows XP that has been discontinued by Microsoft, I decided to go with the best and the latest and upgraded to W7 Professional. I got the stand-alone OEM version for 139.00 at CompUSA. The installation was quite easy although I had to purchase an external DVD player Samsung SE-SO84 which I would need anyway.

I also upgraded my Canon Pixma 1400 printer to a Canon MX870 WiFi capable printer and replaced my Sierra Wireless Card that was also stolen with a Sprint U300 card by Sprint. This card is 4G capable but I find it heats up considerably. Sprint at this moment has other updated Air Cards of better size, quality and performance. Added to this bundle I got a Cradlepoint MB1000 router that converts the aircard's signal into a wifi network where up to 64 devices can connect to. This router/converter has become a "must have" because of its ability to connect the Asus, MX870, Dell Desktop, my daughter's Inspirion and iPhones……very sweet!

Regarding software first on my list and most important is Quickbooks 2011 Professional Edition. When setting up this program I suggest you add your own "categories" as you go. Depending on the type of business you are opening I would decide on using the "Items" detail to keep track of your inventory and purchases. And yes, pick an "Accural Method" of accounting at this moment! I will have a section going over the use of Quickbooks in the near future. But now the most important part of Quickbooks is preparing your budget by going to the "Company Tab" go to "Set up Budgets" and begin to post your projected expenses.

 

Well, that's the end of this section. Keep reading my posts and feel free to post any questions and criticisms. As you can read I might have to break out and open other sections to detail things like "Time Management", Quickbooks, etc.

09/2010 Update: There are a number of new aps on the market and especially if you use an iPhone. I recommend you purchase aps that you can sync with your phones because at this point online based aps are the way to go. Once again be sure that any hardware purchase you make will last you at least 3 years. In purchasing my Acer I although I had to upgrade to W7 I still saved money. The equivalent laptop with Intel Processor, 160Gig HD, and W7 pre-installed is selling for over 600 USD.

 

May 30, 2008: The Here and Now:

I should have prepared a "Graduation Gifts" campaign right after Mother's Day. I thought it graduations would take place after Mother's Day but too late I realized that many schools have their graduation ceremonies the week after Mother's Day. Normally I wouldn't bother but I'm looking at a lean summer this year and every single event has to be taken advantage of. I did post this note in the "2009 Planning Next Year" of my agenda. I dumped this ad project and concentrated on my E-mail newsletter and three scheduled Father's Day Email promotions. A month ago because of the increase in the price of stamps and print ad production, I decided to use a trial of "Constant Contact", an email promotion service. I used it for a May Newsletter and a couple of Mother's Day Promotions. It was very effective.

I've spend a couple of days preparing my June Newsletter and promotions but my email list is way over 300 so I decided to go ahead and end my trial period that only allows unlimited emails for 60 days to 100 contacts.

In the trial version Constant Contact will only host five pictures. The rest can be embedded into the email templates by inserting html code. I did this but whether it was by design or not, I found it hard to post links to pictures I had hosted in "The Linkup", Picasso web albums and my own website into the their email templates. I decided to pay the extra 5.00 a month and use their Premium Picture Hosting Service.. I see a great future in this type of advertising and already looked into buying a stand-alone program in the future. More info on Constant Contact click this link

Hurricane season is coming up and I scheduled a weekend in June to test my shutters. I also tested my security system both at store and at home. Two nearby businesses were broken. I interviewed one of the owners and he told me that someone had broken in and stolen 750.00 he had in the cash register. He explained that he didn't do a daily deposit. The other business was broken into two days after and the cash register was stolen. No money was inside it. But there was over 500.00 worth of damage done to both businesses. Sign of the time people! Secure your investment!

Chapter 3

So how’s your budget coming along? Takes time huh? Getting all the paperwork together is a real pain. Don’t think an accountant is going to do a better job. Like I wrote before, “You are the one that should know the most about your business”. You should realize by now that you are perhaps finding in yourself some personal traits that a business owner must have in order to survive, Commitment and discipline.

Get an agenda. You can purchase a “Day Runner” but I recommend you make up your own. One that’s portable but not small, you need to take plenty of notes. I recommend the
Avery dividers that measure 5.5"x 8.0". Buy a set of tabbed separators you can label to your needs. I have mine labeled:
Current: I write down my current things to do and sometimes I have to make a separate sheet for a particular task. After I have these things down I like to go to the Weekly Calendar section and schedule them for immediate action.
Orders: My customer orders with name, phone, email and description of order.
Follow-up: Anything that needs to be followed up, merchandise order, customer call is written here.
Missed: For whatever reason an order is missed it doesn’t mean you dump the customer. A lot of money in the way of advertising and operating expenses have been spent to get them into your door. Offer to call them back when you get your new merchandise, give them a coupon towards a future purchase and if you were smart enough to get a birth date, give them a call.
To Do Month: During the course of the year you are bound to come up with new ideas, ads, etc. I like to breakdown ideas/tasks in this area broken up into the months I want to start working on them.
On the inside front cover of my agenda I placed a pad xxxx I secure it by keeping a tape behind it. This is great to jut down notes, ideas etc. Make sure to move it to the correct section afterwards or it’s just going to sit there.
I also have two Calendar sections one is my Weekly Calendar and the other is my Monthly Calendar.
Weekly Calendar: I prefer the Day Runner “Week in View Planning Calendar” Ref# 481-285Y. If you look at these calendar pages they will give you an immediate look of your week and each daily section is split into two sections Hours and “Record”. I post my tasks (divided by Office, Calls, Projects with ref# to notes, Pending Orders, etc) on these sections. Once listed I go ahead and post them on the days and times I want to work on them.
Monthly Calendar: I also have a Monthly Calendar section and once again I prefer the Day Runner “Tabbed Month in View Planning Calendar”. Once you get into the habit of using an agenda you will take advantage of both the “Objectives” section for projecting the course of your projects and skipping to the back of the you will find a “Planning Next Year” section where you can post your tasks such as tax preparation and filing along with the proposed advertising schedule for the coming year.
There is a section titled ‘Quarterly Overview”, I usually post a recap of my projects here and on the calendar section, in my shorthand, I have my advertising schedule for the entire quarter, more on this later.
On the Calendar dates itself I usually post personal things like dinners, beach days, dinner at Mom’s, etc
It might sound a bit obsessive but I guarantee your ability to plan ahead will pay for itself.

Chapter 2

Setting up Seed Money and Business Budget

Now that we have our “Back Yard” in line, it’s time to look at our dream.

There is no 1-2-3-4 way of looking at the start of a business. You have to think of it as a pot that you will be tossing ingredients into and coming up with a dish that has a distinct flavor that will ultimately be called Yours!

Your Business budget should be set up in two steps. First your “Seed Money” needed to start operations and then your actual “Operating Budget”. Let’s Start:

Think of the Product or Service you want to offer. How do you want that product presented? Keep this in mind as you scout out a location. Here are some suggestions you have to consider.

Rent. This is very important but remember that by getting a cheaper location you might feel you are saving let’s say 500 a month (6,000 a year) you might be losing out on a steady stream of shoppers that you might have to spend more on your advertising budget to get them in the door. This effort to market yourself is not only going to cost you in terms of dollars and cents but also in other resources such as your time and your creativity used to come up with ads and ad campaigns. It will also take more time to reach the level of sales you need in order to come up profits. This means more expenditures such as rents, utilities, labor, stock etc. making the climb steeper and which can ultimately use up your capital reserves. This is a time to coordinate your budget along with a schedule…. I’ll discuss more on that later.

Location set up. So Ok, you have a great location and now let’s look at how much you are going to need to set it up.

What is going to be your “format”, your “look”? Do you have it in mind or do you have the capital to get a designer to prepare it for you? I would think you are going “barebones” on this so let’s think of the minimal essentials, I like this approach because it makes you think of what’s the most important part of your business, it should be the product. Everything else is trimming so let’s make the most of the “trimming”.

Pick out a good interior color for your business and do a good paint job.

Clean the place up!

Get your fixtures, shop for them. My first fixtures were purchased from a store that closed down at a cost of 150 dollars. I refurbished these fixtures for a cost of 60 dollars. I build my own window fixtures for a total cost of 150 dollars each using solid wood, sliding glass doors, halogen lights and most important stain and varnish. I worked on these fixtures on the sidewalk in front of my store after 6 o’clock every night. I’ve had these fixtures for 11 years and recently replaced my interior fixtures by purchasing used fixtures from a luxury store that closed down for a total of 2,400 dollars. When I got an estimate to make three matching window fixtures I was quoted by the manufacturer 12,000 dollars for three! This was at the beginning of this year and as you know, this year has not been one of the strongest for retail. I’m sure getting a lot more done with those 12,000.00. I also realized that although the fixtures I had purchased were made of solid Cherry wood and are very elegant, the Miami sun fades the varnish of these fixtures and the window fixtures were sure to need work within a few years. I decided to forego the idea of renovating my fixtures for at least another 2 years. By then I hope to replace the entire set with fashionable Formica for about 3,500-6,000 for all. Keep this in mind, you should buy fixtures that you will use for 3-5 years because by then you might want to revamp your entire store.

Take your time and shop around. There are a number of businesses that specialize in used fixtures in South Florida and anywhere you might live at. Check them out.

As far as flooring, compare prices for new tiles, commercial rugs and area rugs. See which will fit your budget and enhance your décor.

And the Signs Says….

Look at the cost of a good sign. This is more important than your interior! In Coral Gables it is an absolute nightmare to have a sign done. Call the department that handles this and get the instructions/guidelines issued by them. The city might request architectural plans. Get a price from an architect/engineer, look up plans filed by the business that was there before, look into buying a Cad Style program that will produce plans once you input the measurements and figure on purchasing a tape measure, ladder, drafting paper and draw out the plans yourself and of course schedule a day to take the measurements and write them up or enter them. I can’t suggest a program because I did my own design and plans by hand. When inspectors came to check out the work I canned the ego and attitude and asked for their help in expediting my inspections. I let them know that I was on a limited budget and wanted to do things correctly the first time. Many merchants around here label them as hard-noses but they were more than helpful. Remember you don’t have the capital to fight city hall. Before going to City Hall try to get a recommendation from someone that has dealt with that certain individual. As you can see planning and scheduling is becoming a key issue in all this.

Help! I need somebody

You might realize at this point that all this is going on simultaneously. During a recent conversation with a person who closed his own business he stated he had closed because as he put it “I’m tired of constantly having to wear different hats”. Yes, you are the ONE that has to get it all done. You are the ONE where the buck ends. Remind yourself that you are there because you want to be there and as long as it is a Challenge and not a Burden it will always be a Dream that you are living.

With a Little Help From My Friends:

Not only do you have to maintain a budget but you also have to maintain a schedule as well. This is where you have to start learning to delegate chores to whoever is helping you, family member or friend. Delegation is an art. You may send someone to do a job for you and they will either out-perform you or make a total disaster of it. This can be avoided by getting that person as much excited about your project as you are. Once you get them going or once you both figure out what needs to be done, chances are the job is going to be accomplished thoroughly. Management is not about control, it is about planning, preparation/teaching, execution, follow-up and reward. Reward, gratification whatever you want to call it comes in different forms. It could be the feeling of accomplishment, it could be a bonus check, a pat on the back and it could be a simple “Thank You, I couldn’t have done it without you”.

By this time I think you need a little help and I think you should consider this next step/phase, but before this let me give you a bit of the “Here and Now”.

“The Here and Now”

Today is May 24, 2008. As the months go by the economic situation will worsen. All you have to do is read the news to confirm it. This Memorial Day weekend I was planning a road trip to Washington DC. It’s about an 2200 mile round trip, I drive a KIA Sportage that gives me about 260 miles per tank full, about 50 dollars per tank to fill, figure I would be spending about 450 dollars on gas alone along with food and lounging. My girlfriend worked 16 years as a dispatcher for the Florida Highway Patrol and warned me that Memorial Day Weekend scores as much or more fatalities than New Year’s Day. Forget the road trip, I’m staying home and getting a number of things in order.

Don’t be alarmed by what seems to be bleak economic times. As an entrepreneur you must look at this as a time for opportunities. Store rents/leases can be negotiated easier. Vendors can be squeezed for best prices and favorable credit terms. Private investors might be easier to convince to give you their money to work with. And remember that just because we are in a recession it doesn’t mean the consumer isn’t looking for a deal or has a need.