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Starting a Business in a Down Economy

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November / December, 2010

Carl Petite

Columbia Water Gardens in San Jacinto, California

When we started toying with the idea of opening Columbia Water Gardens, we had no idea where we were headed, much less how to open a business. If it weren’t for minor miracles, I wouldn’t be writing this article. We are by no means a giant in this hobby. In fact, we are a small family owned and operated business struggling to live the dream. We have a small store, are growing, and constantly expand our inventory. Is business ownership rewarding? You bet. Are there moments where I want to throw in the towel? No. I have a fantastic support team with my friends, family, and colleagues that keeps me encouraged when we have a slow day. I heard one time that it’s always best that when someone gives you something that you should pay it forward. So in that regard, I’ll try to offer some words of encouragement to those that are out there that will hopefully transform their dreams into reality.

Here are my 7 keys to our success.

1. Have a foundation. I know it sounds simple, but this foundation needs to be dug deep if you’re going to weather the storms our economy sends our way. Our foundation is our website. It always was our intention to open a retail store, but we were scared of the very real possibility of failure. In our business plan, it is the website that covers the fixed operating expenses of running a storefront. We refused to open the store until we established an average net earnings that would cover all of our expenses. In sales, you are only as good as your last 90 days.

What that means is you total your earnings over 90 days and divide that by three telling you what your real monthly sales figures are. With that number you have a real basis for improvement. So what we did is figure our expenses of running a store, and averaged that against the profits from the Internet. When we attained that goal, we set off to open a store.

2. Have a plan. I’m sure you’ve all heard “Plan your work and work your plan,” but to put that into action takes everything to the next level. It really takes vision and dedication. It is our plan to grow to a larger location and to be a “destination location,” but Rome wasn’t built in a day. Those that have built these locations have worked very hard to get there, and it’s entirely possible that to them, it’s not a destination, but a point on their individual roadmap of their success. Revisit your plan often and revise it slightly and with careful thought.

3. Relationships. One of the things that we are very proud of is the relationship we have with our customers and vendors. Success in business comes from having solid relationships. Relation-ships build our customer base, they extend terms when your business outgrows your receivables, and they protect you from enemy attack. I can’t stress how important our relationships are to us, and how careful we are to defend them.

4. Grow slowly. When we opened our doors it was a culture shock. We opened on literally a shoestring budget, second hand shelving, very limited supplies, and no established customer base. It takes time to grow a business, and therefore it takes time to grow an inventory. Take your time. Most customers understand that their needs are unique and are willing to wait a day or two to get the right items for their application. Let your suppliers stock your shelves at a distance. Carry the must have’s like food, medication, water clarity items, pumps, smaller filters, lights and accents, etc.

5. Solve your customer’s problems. When a customer comes into the store, they almost always have some sort of an issue. It’s not just your job to find out what that problem is, but to solve it. That’s right, solve the problem. It is your job to know the biology behind algae, the physics behind water movement, and the mechanics of stellar filtration. Knowing these will close more sales exponentially, and get you referrals.

6. Advertise outside of the box. Get involved with your community. This does mean joining a chamber of commerce, advertising on the kid’s soccer banners, sponsoring holiday events, and saying yes when a charity asks for help. We all know that social media like Facebook and MySpace will give you honorable mention when you venture towards the extraordinary. We recently attended a trade show for reptiles, birds, dogs, cats, saltwater fish, and yes, ponds. We brought over $100,000 in retail goods from top-of-the-line manufacturers and literally closed our retail store during the event. This was done from loans from our vendors getting involved, and completely wiping out our store’s inventory. Our plan? Shock and awe. Our results? Over $6,000 in retail sales over 16 hours. Not bad given that we are still seeing dividends a month later as I write this article.

7. Be a “Good Guy.” “Good Guys” don’t erode the retail market. They are real salespeople that know how to hold profit and know that there is more to the sale than price. In the road to a sale, price opposes value. The more we talk about price, the less we discuss value and value equals profit. Basically, don’t follow the fork in the road that leads to lower profits.

We are honored and privileged to be welcomed to this industry, and hope to see more of the Internet drop shippers follow our path. Consider where our hobby would be if fewer people gave up on their ponds out of frustration because of the lack of local support.

Are Internet drop shippers legitimate businesses? Definitely. They work very hard countless hours, and definitely support their customers. Are they missing the best part? Without a doubt, in my humble opinion.

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