Need Opinions, Sinking Fast

[Silent Partner]

I am new to being a business owner, a lifelong engineer close to retirement. I knew nothing of the framing business but bought an existing shop to let my step-daughter run. She has over 10 years in framing.

The business books looked promising showing enough net profit to service and payoff the loans we took out in about 4 years.

After three and a half months since purchase, we are over $4000 in the hole and I am trying to figure out what is going wrong. The sales are about 70% of what was shown to us as past results. Whether the books were cooked or not is water over the dam at this point and I have to get over it.

Looking at some real simple numbers below, does anything look unreasonable.

After our first 17 weeks:
Gross Sales $31,400
COGS 30%
Payroll 48%(2 36hr/wk employees)
Mkting. 9%
Rent 12%
Utilities,phone,internet 4%

thanks

[Tim Hayes.]

Are the 2 - 36 hour employees in addition to your step-daughter? How many hours does your step-daughter work a week?

"She has over 10 years in framing." How much of that time was spent actually managing a framing business?

She should probably fire the other employee and work as a one person shop until you can afford a second employee.

Your cost of goods seems a bit high at 30%.

Are you ordering chops or length and cutting the frames in house?

Do you have written business plan?

[Bob Carter]

Howdy Partner-I must suggest the first thing that getting Business Advice here is like getting Medical Advice here.

Be very careful

Until the Dr actually sees the patient in person, you will get a lot of people playing Dr. on the internet

But, a few questions spring forward

Based on 17 weeks, assume that is 4 months for nice round math. It could include 4 months of rent, payroll, yet 4.6 months of Sales, etc

Based on 4 months your Rent is $981/month. I'm not sure that you logically ought to expect much more in Sales from a location like that. And with Rent approaching in a less than a week, but only a week of Sales, that equation might change a tad

And, make no mistake, your biggest problem is definitely Top Line. Assuming you opened first part of March, I'm guessing about $8000/month?

Now, the good news

You are only "losing" $800-$1000 a month (-$4000 in 17 wks). I'm not so sure that should not be expected for a new owner

Your concern, I guess, is that you aren't crazy about dropping more money into your daughter's venture (and I guess you didn't have two years worth of expenses and bills in reserve).

Simple math tells me that if you can build the Sales back up to prior levels (30% increase to match prior owner's level)you will be out of the hole accordingly to your quick thumbsketch. Not rolling in clover, but out of the hole

But, we don't know anything about your biz, you or your market, so it makes help tough

Tell us a lot more about the Biz and we might have some more concrete advice

[AWG]

as Bob states, more info is needed.

First off,if sales are that low, the overhead of 2 FT employees is certainly unnecessary. Make it a one-man shop and reduce the overhead for the time being.

Where did your business go? As you stated, cooked books aren't an issue - how to get out of your hole is. You probably can't market your way out - so you'll have to focus on starting from where you are. I agree with bob - unless you're in a tiny market, less than $1000 for rent isn't going to get you a great location - one strike against you.

My wife and I had a combined 20 yrs framing and retail experience, but NOTHING near what is required to actually RUN a business. You may be finding out the hard way that it simply a'int as easy as it looks.

Share some more - you may find a nugget (or two, if you're lucky) of advice here that may help out.

BTW which Carolina???


Tony

[Silent Partner]

>Are the 2 - 36 hour employees in addition to your step-daughter?

Step-daughter is one of the 2 employees. Each have been cut back to 36hr/wk from 38 and probably need to be cut back more.

>How much of that time was spent actually managing a framing business?

She had experience in managing sales and production, but not in marketing, financing, and business planning.

>Are you ordering chops or length and cutting the frames in house?

She is ordering chops.

>Do you have written business plan?

I had a financial plan base on the past sales figures. But I might as well tear it up and start over.

The rent is low because it is in an old building with a future date with a bulldozer at which point it becomes a new strip mall site. Lease is month to month.

The location is good, being on the same road and only a couple of blocks from the second largest mall in a metro area of about 200k, with lots of retirees and second home buyers moving to the area into expensive upscale developments.

The only nearby competition was a crafts and framing franchise in a strip mall across the street that closed its doors last month. We got no bounce from that, so I assume their customers headed to the Michaels across town.

It seemed like a sure bet, a good oppurtunity for my step-daughter and a good part-time job for my upcoming retirement years.

[Frame Lady]

Srep daughter needs to eat weenies and beans for a couple of months. Payroll is way to high. My accountant says cog not to exceed 34%, payroll not to exceed 30%. I got my cog down to 28% so that I could increase payroll.

As for all the other, more info is needed. How many orders a day, a week? What kind of glazing, matboards are you selling? Are you including freight costs when you set retail.

Take your figures to a business friend. Someplace something is going wrong and you have to find out where that wrong is to make amends.

Good Luck

[Elaine]

Based on numbers presented, I would suggest a One person operation, and look at pricing structure. I would also review what a one person operation employee could be paid based on the current sales and adjust. You can always raise pay or add PT employees when sales are increased to a level where they can be accommodated.

I had to go through a similar exercise last August, and it was a very good learning experience! We are in much better shape as a result.

my 2 cents based on limited info

[Silent Partner]

If I leave off the first month, in which we were paying COGS from the seller's $11k February, during our $7.5k March, the COGS since April is more like 23%.

[Silent Partner]

When you you speak of payroll not exceeding 30%, is that including payroll taxes?

thanks for all the feedback

[trapper]

I wouldn't complain...price of being new. Pass it off as the cost of doing business?
To get out of the hole being dug I would cut costs.
I'st place I would start at is payroll. I can see some other places as well where costs can be trimmed.
What can I do without if need be...Luxury or a neccessity? Runnning a business on a shoestring is not easy and takes a lot of self discipline, but can be done, if your not always looking to the jonses to keep up. Don't try and compare your self with others..who cares? You can do it...!

[wpfay]

My initial resonse is to cut the payroll. Someone operating alone should be able to do those numbers.
Quickly checking your percentages you have a total of 103%...could be an indicator.

[Jerry Ervin]

Originally posted by Silent Partner:
...The only nearby competition was a crafts and framing franchise in a strip mall across the street that closed its doors last month. That says more than all the percentages and numbers you can throw out here.

[Richard Darling]

Keep in mind that if the 4 months of business is the past 4 months, I think a lot of frameshops see slower business in Feb - April.

I also agree that cutting payroll seems like a no-brainer. Unless you can figure a way for one or both employees to engage in some good old-fashioned sales calls. You might crunch some of your numbers to see how quickly you would pay off a saw by ordering length. That could reduce your cogs a bit (but beware of additional shipping costs). I'm sure you've already explored some basic economizing - unecessary lighting, compact flourescents, raising the thermostat. These may not produce huge savings comparatively, but $50-100 saved every month can really start to add up, especially when you add them to other cost reductions.

Good luck. Let us know how it works out.

[EllenAtHowards]

When we were shoestring, we found that basing our pay on a percentage of the gross worked out better than paying straight hourly wage. Of course, we could do that being owners; the government frowns on doing that to an employee. Outside sales could be good. Approach every business in town, every government office, hand out a business card with every transaction from paying the power bill to buying gas. You never know...
You have a long row to hoe. Is the stepdaughter as dedicated to rising up as much as you are? She will have to be as dedicated to this as to raising a baby. Constant constant care. But many have done it and you can too!
And remember that August ALWAYS stinks!

[Mike LeCompte CPF]

Disagree with Jerry on this:

Just because a craft franchise closed across the street is no need to panic; maybe some of their customers will come to you and you really don't know the reason they closed:underfunded? Poor marketing/advertising? Host of other reasons?

Now, I'd get thee to the nearest SBA office, SCORE folks, Chamber of Commerce and get input from them. Would also get input from the worthies on this site, but would lso get some industry books, advertised in Decor, PPFM, etc to get industry-related help.

I think I heard somehwere that small businesses take about five years to become truly profitable, so maybe you want to base your options on the fact that, even tho this was an existing business, you may want to treat it as a new business in light of your original posts.

[Bob Roy]

Originally posted by Jerry Ervin:
</font><blockquote>quote:</font><hr />Originally posted by Silent Partner:
...The only nearby competition was a crafts and framing franchise in a strip mall across the street that closed its doors last month. That says more than all the percentages and numbers you can throw out here. </font>[/QUOTE]Funny I focused on the same thing but perhaps for a different reason. Is it possible that the reduced sales volume is directly attributable to the closing of your competitor?

My thesis is that that a fair percentage of the shop's volume was the result of people coming in for a second estimate* after going to the craft store. Since these people are now going to Michaels at the other end of town, you don't get that spillover effect.

Just a thought...

(* or referrals for jobs they couldn't handle or turn over quickly enough or...)

[Bob Carter]

This shop did average about $11K from prior ownership. I think it normal to expect a "drop off" under new ownership

Two things I WOULDN'T do yet are to get rid of an employee and reading any Tea Leaves about the neighbor closing

An extra employee now allows a lot of flexibility to do things that, perhaps, weren't fully executed prior to sale-Things like fully understanding the market and the competitive stance of the existing shop.

And, what about when sales do come back? What is a good employee worth when you have to find another.

Remember, this venture is "costing" less than $1000 a month to right the ship

And, the fact that someone down the street shuts it down is too little data to start lowering lifeboats. In fact, some of us might see this as an opportunity, not a giant Titanic-sized iceberg

Cap'n Partner needs to make a quick assessment of what running a business is all about.

This one probably wouldn't have passed the smell test for us (low sales volume, bldg about to be demolished to name a few), but 4 months is a tad premature to expect to start breaking out the water skis and practicing rooster tails. He doesn't quite have his "sea legs" yet

At $11K, with his numbers, he just might be able to sustain that job for his step-daughter. She won't be having lunch with Warren Buffet anytime soon, but she will have the job he bought her

From the little we do know, his problem is Top Line. He gets that back to prior levels (and it sure looks easily attainable)and he will at the level that attracted him to purchase

Then, he gets to face all the other problems everyone else does on a daily basis

Pretty much everything else is throwing darts at a dartboard that no one has seen

[JohnR]

Silent Partner,
I'm not clear. You own the business, what else is your roll? Are you one of the employees (your handle seems to indicate not)? If not, let go one of them and get to work.
John

[Framing Goddess]

Yup, your payroll seem a bit high, but you'll get that in a new business. Don't sharpen the axe just yet...

If the 2nd employee is valuable, hardworking and experienced, then you might be better off hanging on to him/her. If they are 'marginal' then send 'em back. There is PLENTY to do in a shop like that: how about doing a mailing to the shop's existing customers letting them know of the exciting new changes now taking place? Put an irresistable spin in that and folks will come in out of sheer nosiness. Seems like marketing ought to be your prime focus right now. "New ownership" gives you a wonderful excuse to be in touch with old and new customers. Work it. Your stepdaughter can attend art openings, museum benefits and the like to get her name out there.

There is lots of work to do as far as updating the shop's look, I am sure. Your stepdaughter, with her experience, must have lots of neat framing ideas she would LOVE to implement and display as samples. Do the walls need painting? Carpet cleaned? Sign freshened up? THIS is the time to do those things. Customers love to see shopowners who care like that.

It would be much better to bring in more business to keep both employees busy than to cut hours. Focus on a consistent marketing plan and follow it through.

Review your numbers every week, month, quarter (whatever, as long as it is regularly) compared to the same period last year and the year before, etc. and note any trends.

Your 1k/month is what is known as operating capital. Every business needs operating capital. I have a stash after 19 years. And I use it when I need it.

If you are doing 70% of the biz for this period last year, that's not bad. December is still to come. A lot of catch-up can be done in the last half- last quarter of the year. Know that about this business in particular, but retail in general.

And don't rule it out as a retirement part time job for yourself yet. My dad has been helping me in my shop since his retirement 17 years ago and it has been a wonderful thing working side by side with him. I wouldn't want to give that up.

edie the waitandseebutgettowork goddess

[Jim Miller]

Good suggestions above.

Gross revenue seems to be the Big Problem. Take action to double sales ASAP, but be sure to maintain a good gross profit rate. That is, don't just buy sales with discounts.

Here are a few advertising/promotional ideas: Hopefully you have the previous owner's customer list. Use it and also buy a local mailing list, and send out 10,000 great postcards as fast as you can do it.

Set up a "Grand Opening" celebration. The local Chamber of Commerce might help with that. Perhaps a local restaurant, caterer, or wine shop would like to participate at a discount, in exchange for a big promotional boost.

If you can arrange a "remote" broadcast by a local radio station, in conjunction with your business neighbors, that might bring the marketing "splash" you need.

Other ideas to get consumers to open your door: Canned food collection or a carwash in the parking lot for some worthy charity, wine tasting, meetings/seminars on framing at the shop for local clubs related to art, quilting, needle arts, amateur photographers, art students. How about a photograpy or art contest with dinner for two and $500 in framing as the prize?

Payroll is about twice what it should be for the revenue produced. Like Bob, Edie, and others, I would hesitate to fire the extra help. That much labor will be needed when the sales come up, and it's hard to find a trained, productive framer when you need one.

On the other hand, it is very important for both workers to understand that this is about half of the "normal" workload. Are they both good long term producers? Keep them busy building the sales. Make clear expectations, monitor, supervise, report their progress to them often. The worst that could happen would be for them to be lulled into thinking this work level is normal, and fail to get the framing done when sales improve.

Look for the next location now, and plan to move as soon as the revenue hits the rate of, say, $200K/year. It is important to get the performance fixed before moving, as any deficiencies you presently have to deal with will only get worse in moving to a new location. So, it is right to have moving as a conditional goal in your business plan now.

[Framerguy]

On the other hand, it is very important for both workers to understand that this is about half of the "normal" workload. Are they both good long term producers? Keep them busy building the sales. Make clear expectations, monitor, supervise, report their progress to them often. The worst that could happen would be for them to be lulled into thinking this work level is normal, and fail to get the framing done when sales improve.

And along those same lines, when there is no framing to be done, have one of them watch the shop while the other goes out and touches base with area businesses, lawyers, bankers, etc., to introduce your business to them on a personal level and hand out business cards. This goes a long way to generating new business and, if you make up a one page flier telling those business people about your frame shop, it will be a tangible piece of information that they can refer to at a later date when they need to have framing done.

I was doing this on a once a week basis when I moved to Florida and it generated about a 1 in 15 return rate within a month of passing out the fliers and business cards (and most of those within the first week after). It brought in another 1 in 20 new customers within 6 months of contact with only one followup visit.

5 new customers average on an average contact time of 5 to 8 minutes per customer in a single day isn't too bad a return for the work involved and you get to meet some really nice people that way.

Good luck.

Framerguy

[JohnR]

I still wonder if this is a two or three person operation.

If it is “Silent Partner” and two others, I'm not convinced this business is ready for three people.

If Silent Partner is truly silent in this business, (i.e. contributes startup and little else), I'm afraid starting a business takes lots of hours, hard work and little pay in the beginning. It may not be a part time job for you! Sorry if I read too much into your handle, Silent Partner, but it seems like you expected easy street. I would lay off the extra employee and get hard at work.

John

[Rogatory]

It's a two person shop, step-daughter plus employee. Silent Pardner is financing for now and will start working after retirement, right?

I would say keep the employee, but step-daughter needs to take a pay cut for awhile.

[j Paul]

Originally posted by Rogatory:
It's a two person shop, step-daughter plus employee. Silent Pardner is financing for now and will start working after retirement, right?

I would say keep the employee, but step-daughter needs to take a pay cut for awhile. If the step-daughter is indeed the active partner (read: not just and empolyee but will share in ownership) then indeed she might have to work for less as in sweat equity for a while. Heck most of us full owners are working for less during startup. Most other advice so far seems practical.

[Bob Carter]

A lot has been said about how the early years are a struggle; not to expect any pay for "X" amount of time, and how much you should have in reserve, etc

I would love to see a Poll asking just such stuff

Perhaps it's just me, but how smart a Business Decision is it to enter a Business accepting that you may not be paid for awhile or it will take a great amount to "get it started" only to accept that future wages "ain't no great shakes"

I wonder if that ought to disqualify us from even offering Business Advice?

How come there just doesn't seem to much of a pot at the end of this rainbow?

[Jim Miller]

Bob, I agree that we should be in business to earn a living. When mine started in 1988, paychecks began in the first month and haven't stopped yet.

Those who seek busienss advice here may be reminded that it is free, and probably is worth that price.

If one's enterprise produces little or no income, then I think it ought to be called a hobby, not a business.

I think the "pot at the end of this rainbow" to which you refer means different things to different people. To you, I guess it represents better-then-average income. To me, it represents personal freedom. Maybe a parent's basement frame shop represents an escape from the kids or household responsibilities. Maybe a part-time framer's pot of gold is a diversion from pressures of his/her full time career.

Framing is a cheap business to start up and run, so it attracts operators who might not be able to make a more sophisticated business work.

A few we know have proven it is possible to earn a lot of money in the industry. Would most framers have the ability to do that? No, and even if they could, I think most framers are not interested in making the personal commitment necessary to achieve at that level.

[j Paul]

Originally posted by Bob Carter:
A lot has been said about how the early years are a struggle; not to expect any pay for "X" amount of time, and how much you should have in reserve, etc


I wonder if that ought to disqualify us from even offering Business Advice?

Bob, first off I always learn alot from your posts but the reality is that most ultra-small business (Mom & Pop)are usually under capitalized. They are often started with saving or even less. Most of these people are also in business for reasons other than just money. Personall freedoms have been mentioned, the ablilty to be your own boss/ set your own course and the list goes on and on. If I had a gazillion dollars to start this business I wouldn't have done it, I would have laid back.

I have been self employed my whole life. My wife is a professional who lost her job at 52 and at 54 is overqualifed and still looking. Of course they never tell you, you are too old, just overqualifed. Same boat for my Brother-in-law who was also self employed for his adult life. Sold his business and wishing he hadn't, now he is working for a Big Box retailer and hating it. Now he never got rich in his former Mom & Pop Music Store but made a decent living and always the possiblty of doing more tomorrow. Their looking to do something again but they don't have 100's of thousands to start over, so if they do it will be on a relative shoestring and for reasons other than just a paycheck. For most of us that is the cost of the freedoms that we desire.

Now we all want to make "mo money" and we can learn to operate smarter, but there is more to it than just numbers. And that is my opinion and I'm sticking with it until I change my mind! graemlins/shrug.gif

[JbNormandog]

Personally I would trim back on the part timer (as much as you can without losing her) and have your daughter in law lower whatever she is bringing in.

I am also at a tipping point being open from scratch less than 2 years. Some months I cover the bills some months I go deep into pocket.

Like mentioned above, if things are slow, when the part timer is there have your daughter go door to door at businesses and get involved with comunity activities.

Do mailings to existing customers every quarter at least. If you aren't letting them know you are there, someone else is. Don't take them for granted. Mail out to new people as well, if a huge mailing overwhelms your budget, break it down into sections.

Go and talk to the framers at Michaels, let them know you can do the jobs that they can't or won't.

1,00.00 out of pocket isn't great but when I started for the first few months I was dumping 3-5 thousand a month.

Start looking for a new spot NOW. If you are month to month your landlord could pull your plug next week. You need to be the one to pull the plug first once you find a better location.

I wish you luck and hope you find the right combination that works for you.

[Bob Carter]

Hey Jim and others-I sure wish I could say the things I do face to face and give a wink and a smile when I say stuff like when we seem to make so many "unbusiness-like" decisions it ought to disqualify us from offering advice. I include myself in that category

I guess I keep offering a "way too serious" outlook becuase it always comes out that way

In truth, I think ol' Pardner bought his step-daughter a job more than he bought himself a Business and many can relate to that

For me, I started a Business.

So you see why I keep getting the "hobbyists" giving Business advice confused with the Business guys giving "hobbyist's" advice

What do you think about "coding" Business questions
like B1 ia about producing more traffic, B2 is about producing more volume, B3 is about customers we hate, B4 is about Michael's, B5 is about I just want to keep my head above water and so forth

Then there will be a genuine undertanding of what the heck the real direction will be. That way some folks like me will/should stay away from stuff like B3 and B4

I hope that we never mix up earning a pretty good living and personal freedom as mutually exclusive. On the Lunch with Warren thread he mentioned he had never been happier. I understand him perfectly

[Silent Partner]

Thanks for all the input. To clear things up, there is no way I can afford to leave my engineer's salary to work at the shop. I do the Quickbooks and online billpay on the weekends. I need my weekday job to generate money to service the loans($1000/mo), that I thought the shop profits would do, and make up the $1000 shortfall every month. Thats 24K/yr. out of my pocket if this sales level doesn't change and I don't reduce expenses! With my salary and my wife's we are financially comfortable, but not that comfortable.

After considering your replys, here is what I am doing: dropping the fax/creditcard phone line $70/mo, dropping the cardboard dumpster $50/mo, dropping the newcomers marketing service $160/mo, cutting back on payroll $400/mo, and paying off the $20k owner financing portion of the debt with our personal home's equity line of credit, which will allow us to only pay interest and not principal until things turn around, savings $500/mo. All of this will reduce expenses by almost $1200/mo and if sales can pickup around $1000/mo we can maybe start seeing a profit.

I was pretty discouraged until listening to you folks, but now feel more encouraged.

thanks

[Jerry Ervin]

dropping the newcomers marketing service $160/mo


What exactly is that? Is it like a Welcome Wagon service?

I would only drop that if I saw no results from it at all.

It sounds like you are on the right track with the budget.

I agree that you need to be at least 'passively' looking for a new location. I know several business owners that have gotten the rug yanked out from under them on a month to month rental.

[Val]

"...dropping the fax/creditcard phone line $70/mo,..."
Does that mean you will no longer be accepting credit cards? Or that you'll have to phone-authorize them? Or share your land-phone/computer line with the credit-card machine?

[Bob Doyle]

I don't have a seperate line for the fax/phone. Hasn't been a problem, except the one time I was on hold with Verizon and a customer wanted to pay. But, come to think of it it did feel good to hang up on Verizon!

Welcome Wagon has a cheaper service, in which they put out a followup flyer. Got better results from that than I did from the handout packet.

[JbNormandog]

Also,

Does the newcommers club bring in people?

If not drop them fast and look into advertising that works. If you need people in the door don't skip advertising now. If people don't know about you they won't find you.

Also chopping your own frames is usually but not always cheaper than buying chops.

I think I gave $.04 of my opinion so far. Hope it helps and don't give up yet.

[Maryann]

My $.02 cents.....

1)Budget some money to go to the trade shows. The next big one is in Atlanta the second weekend in September.

www.decor-expo.com (http://www.decor-expo.com)

Look at the education offered and sign up for courses. I have always found that shows more than pay for themselves in things I learn/changes that I make when I return.

It's also a place to meet your vendors, cut deals and see new products. There are always show specials and the Atlanta show is a great time to gear up for the Christmas season.

2)Find out if the PPFA has an active chapter in your area and join.

[Jack Cee]

The silent parter probably should become an active partner; it would not be within my personality traits to withhold any pressure to make changes in an organization. If a person has a financial interest in a shop that person should do all within his/her power to change the direction of the enterprise. Hesitation could result in a closed shop. Most businesses go into the enterprise underfunded and suffer as a result. It may be 2 to 5 years before a profit is shown; can your stomach stand the strain? Will those standing behind the loan understand?

Have a heart to heart with you stepdaughter and lay out the problems; consider putting two employes on leave; get involved yourself; increase to load for the stepdaughter.

Business success isn't a sure-thing-sweat equity is a real reality builder.

Jack Cee

[JohnR]

Silent partner, you seem to have a good grasp and appear to be making a good move $$ wise. You just cut $1,200 a month! Some of it hard to do, but necessary. You have been feeding us bits of info as we go along, so the advice can only be very general.

A couple things. You bought an existing business. How was it doing before you entered? If the same, why? Is your sign eye catching from the road? I mention that because it is one of the biggest improvements that can be made.

Secondly, you mentioned your building has a date with a dozer. Do you know what your lease is going to be?

For what it is worth, this is my last post to the Grumble. I’m pursuing a new hobby, acrylic fabrication and it is doing well. My venture into framing did not pan out. I feel like a midget amongst giants here. I seem pretty much ignored anyway. Check for a bunch practically brand new framing equipment for sale in Commercial Posts area soon.

Regards, John

[Silent Partner]

We are just moving the credit card to the regular phone line. Even with everything on one line it still sits dormant 90% of the time.

The Welcome Wagon service was not showing any results. We would get a list of about 60 per month, buy stamps address cards, and get too many return to senders. Plus, it is easier for these folks to hit the apartments instead of the long drives to the homes of the 15% that will actually have custom framing done. I hope to get marketing lists focusing on a more targeted clientel.

We will keep our once a week drive time NPR sponsership and a couple of ads in an arts monthly and in a local news/entertainment weekly.

I am a lot more active than I thought I would be when I took on the username Silent Partner. I used my carpentry skills to build about 18' of new design counters that were badly needed, and probably spend 8 hours a week with the bookkeeping. I do plan on spending more time there on weekends and pick up some framing skills to use when things pick up and in a few years when I start easing into retirement.

[Silent Partner]

We are just moving the credit card to the regular phone line. Even with everything on one line it still sits dormant 90% of the time.

The Welcome Wagon service was not showing any results. We would get a list of about 60 per month, buy stamps address cards, and get too many return to senders. Plus, it is easier for these folks to hit the apartments instead of the long drives to the homes of the 15% that will actually have custom framing done. I hope to get marketing lists focusing on a more targeted clientel.

We will keep our once a week drive time NPR sponsership and a couple of ads in an arts monthly and in a local news/entertainment weekly.

I am a lot more active than I thought I would be when I took on the username Silent Partner. I used my carpentry skills to build about 18' of new design counters that were badly needed, and probably spend 8 hours a week with the bookkeeping. I do plan on spending more time there on weekends and pick up some framing skills to use when things pick up and in a few years when I start easing into retirement.

[Judi]

Silent Partner,

Sounds like the person who needs to get more active is your step daughter.

She may know about framing but if she is to be the one running your shop, she is going to have to learn about operating a business also.

Why don't you get her to sign on to Grumblers also. Whether the advice is good or bad, it can be extremely motivating. At worst it can get you to look at your own practices with fresh eyes and that's never a bad thing.

Judi

[Cliff Wilson]

I'm with Judi, get a fire under that step-daughter. If she's really a "partner" in this business, she has NO business working "36 hours!"

In an earlier post you said her hours were cut from 38 to 36! WHAT?!?! She's a partner. If you want to cut her pay -- fine. But, she should be working 55 - 60 hours. Otherwise, stop calling her a partner. She's an employee.

If you don't want/need her in the shop more than 36 hours, get her out on the road. I'm appalled that a "partner" would be thinking about how many hours they worked!

Also, this is the worst time for non-tourist area frame shops. Be ready for increased volume at the holidays. December more than doubles most months for me.

Good Luck.

[Patrick Leeland]

I am with Cliff on this...she is a partner or owner, this rekwires butt busting whenever needed. Not an eight hour a day gig. That is a job, she wants to be an onwer, than it is time to step up. Take off the training wheels and drive the car time. If you are the money and she is the framer part than she needs to become more than a framer. Framers are in every shop, but owners do more.

Cliff is has another good idea, if you two are there at the same time and it is not needed get someone out of there. Go pass cards out, go setup meetings to talk about framing,do something outside of the shop in hopes of drawing folks in. It is not the field of dreams, the doors open and they are not coming, go hit them over the head and drag them back to the shop. Be aggressive and be proactive or simply foget it.

PL

[Mike LeCompte CPF]

How's about opening 10:a.m. to 8 P.m. Mon-Fri, 10 a.m. to 5 p.m. Sat and 1 p.m.-5 p.m. SUnday

Yeah, seven day weeks.

Yeah 10 hr days in the week.

Open longer, more often than the compeition.

AND ADVERTISE IT

Dump Welcome Wagon. No newly-moved person is thinking about art. They think about art after 6-8 months of ownging the house.

Demographically-targeted mailing list to the upper income families=-=like those making $100K PLUS per year--in a five-mile radius.

Print up a couple thousand fliers, drive around the 'hood and stick em ihn the newsppaer part of the mailboxes Again, tout those seven-day-per week open hours

Got a local paper--not a city-wide rag, but something for the community? If so, get in it, stay in it, and advertise those seven-day per week hours.

When the business flows in, reduce hours to maybe closing on Sunday. MAYBE. For awhile, Sundays were one of our biggest income days. But we're also in a center with three restaurants.

My eight cents

[Silent Partner]

My stepdaughter will increase her hours gradually. It was bad timing, but she gave birth to her second child a week before we tookover the business. She will be getting him into childcare when he gets a few months older. What's disgusting is child care here is twice the cost of tuition to the college nearby.

[Leslie S.]

In your first post, you mentioned that sales are down from the previous owner. I think a little of that is to be expected, coupled with traditionally slow part of the year. However, you might try comparing a month of the old vs. new: 1)number of orders 2)number of completed orders 3)average ticket. Perhaps the old owner was a real whiz at upselling designs.

I think there is a HUGE learning curve, going from just framer, to owner. Given the fact that she just had a baby, I am amazed that she can put in as many hours as she does!!! Wow!

[Judge Roy Bean]

Jesus, bob you make me want to kill myself.

Silent- Postcards, Grand openings, give away small mirrors from scrap, paint and clean the #### out of the place. Work the **** out of youselves as much as you can, go crazy for four or five months. Get a display set up at the bank you do business with. Buy books, "Gurilla Marketing". make an appointment with SCORE. Cut costs where you can. comb all those bills. I recently found out, just by calling, that I could lower my internet bill $30.00/month=$360.00/year Remember if you can save $100.00 you don't have to make $300.00.
Talk to all the Frame company reps you can. Studio moulding offers a discount of around 25% if we put up 300 samples. Antother thing to think about is limiting the number of vendors you guys buy from. limit shipping costs that way. You want to be a big fish in a little pond.
Make the store look great! Shadow boxes, suede matts you name it make all the pieces for sale in the store look like total works of art. And really examine those bills. Check out Historicaltownmaps.com and buy antique reproductions of the local towns. sell them. cheap!
It sounds like the mentor right now and really need to be almost like a coach. Keep her positive and healthy. make sure she eats well and has a winning philosophy. Go buy the book by Jeffery Gittometer,"The little red book of Sales"
Because as the end of the day its all sales baby! Don't mistake this as a Picture framing business. It's a sales business. And you want to go after that core customer base. your old custs. check out the local newspapers and look for new house sales. Send them a postcard. $25.00 off. who cares how much just get them in the door and make them love you guys. why because your the best, better than some part time micheal's employee who won't hand deliver the frame to the copmany party if need be. Your better because, after talking a bout your customers charity event you send them a letter with a gift certificate in it for thier auction. Treat your customers like gold! Good luck this month!

There is a reason why people are comming from all over the world to live and start business here. Go get em!!!!!!!

[johnny]

36 hours a week is isn't enough, but considering the situation she's a trooper. It's great that she has you as well.

Looking back on this year I've barely put in 36 hours per week so far, if that. However, I've owned the business for 16 years. It was bad in the beginning, then got a lot worse before it got better. Forget vacations, I've worked years without a day off. Not meaning without a scheduled day off, but a literal day off - working a good 1000 days in a row. Being here while sick. Running multiple locations. I remember a December where I'd do all the overflow work, cutting frames and mats and mounting artwork for up to 72 hours straight, taking 20 minute catnaps on my office chair. Going home to sleep when I'd start to hallucinate and waking up 20 hours later to come in and do it all over again. Rumours started that I actually lived in the workshop. I looked so bad that employees were worried I might keel over on the spot. But, we never said "no" to a customer and never missed a deadline.

But the dues have been paid, at least for a while, and I can say that I have it better than a 9-5 job. Vacation when I want. Stay home if I really feel like it. Everything is covered.

Now, this year is the first year in a long time where I'm encouraged enough about the business environment that I'd consider putting in the effort to get more stores up and running. It's not quite there yet, but it's improving, and if that happens there goes my lazy days again. smile.gif

[Val]

I put in 105 hours in my shop in the past 7 days, and almost as many the 7 days before that. But then, I'm nuts. I leave at 6, go home for supper, kiss my husband and come back to frame some more. I get more done in the quiet evening than all day when it isn't.
I'm also a business owner with bills to pay, including ME. I realized, after paying this month's bills and overviewing my month, that I paid my part-timer more than I paid myself by a ton, and have cut him back to 2 afternoons a week, and threw myself back in the ring, after finally literally getting back on my feet after my surgeries. Gotta do it for now. (I am taking 3 days off (in a row) in a couple of weeks to go camping.)

[seido]

You might want to consider a framing software package like Lifesaver. It is free for the first year and I cannot believe how much more I'm making (and not losing) because my orders are more accurate...also their PowerPay credit card system is virtually free and requires no separate phone line. They have just a $5 per month statement fee and very competitive rates for the transactions

Joel

[seido]

...and on the subject of hours. My best client called the other day @ 5pm and said "how long will you be there"...the correct answer is, "as long as you need me to be"!

There are no hours, there are no days...welcome to retail1!!!

Joel

[Jim Miller]

There may be times when a small business owner must work exhausting hours and sacrifice personally. I've done it myself -- I guess most of us have. But it shouldn't stay that way for long, or happen often.

Nice Day said "...its all sales baby! Don't mistake this as a Picture framing business. It's a sales business." That's a good start, as nothing else can be done with the business until sales revenue flows in. Revenue is the first necessity. But that's not "all".

Bringing in sales is only the beginning. Revenue should be considered a means to an end, but not an end in itself. Saving money on all other cost factors such as COG, labor, and overhead is also important. All of these activities contribute to the end goal: net profit.

It is quite possible to generate lots of revenue, and have it run right back out in expenses. That has been called "spinning our wheels" or "succeeding to the point of failure", and it is a common affliction of small businesses.

Of course sales revenue is important. But at the end of the day, what matters most is how much of the money that comes into the business is left over after all of the obligations are met.

[brian..k]

My 2 cents are only worth 1.5 cents but you can take what you like from them.

Without seeing your current books and those from the previous owner I'm only shooting in the dark like the rest of the posters here. One thing I would do is look at the average dollar spent per order now versus the previous owner. Are you underselling your clientel? A simple glazing upgrade or an extra mat sold to each client would probably come close to canceling out you cash flow issues.

Or increase your labor fees to the clients by 10 percent. Labor costs are fixed so the increased cost to the client is all new profit that you weren't realizing before.

Of course as Bob pounds into all of us, maybe you should opt for a new location now rather that waiting to be forced out. This way you will have the time required to find the perfect location for your business.

[AnneL]

This may sound harse, but I have to question why your daughter-in-law wanted to start a new business at the same time she was having a baby. Having a new business is almost like having a new baby. It requires a huge amount of time and care to keep going. She has essential given herself twins! :eek:

Our daughter was 4 when we started our business and I quickly found out it probably wasn't the best decision from a parenting point of view. She survived and turned out ok. She did have to learn to be quite independent and take care of herself from an early age though.

[Bob Carter]

Man, am I glad a female said that. Although, I think that AnneL has a valid point, imagine that a male had made the same suggestion. smile.gif

[ 07-04-2006, 01:06 PM: Message edited by: Bob Carter ]

[Val]

My daughter was barely 2 when I started my first shop, and 3 when I became a single mom. Had I known? Probably not, but that's another story. She says some of her fondest memories when she was little was hanging out with me in the frame shop. I had to make a lot of personal sacrifices but, at 24, she's quite successful now, says she learned a lot about single-parenting her 2 from then, and seems to have turned out just fine. It can be done, but it isn't easy!

No matter what the timing, Silent's step-daughter sounds like she's making the best of it as she can, and I'm sure she's grateful for his help. Probably tearing her hair out, wondering "what have I done??" but grateful. And I have to give Silent huge credit for hanging in there, speaking up on the G and making some changes. That takes courage on both their parts.