I recently had the opportunity to visit my old alma mater, Oakland University, to talk to a Entrepreneurial Marketing Class about how to open a business in a downtown. As I was putting my thoughts together, it made me really think about what makes a good downtown business. Every day, we have people on our phones and at our doorsteps with dreams of opening a business downtown. The idea of being your own boss certainly has a certain romance about it, but that romance needs to be balanced by real numbers and a solid plan or it won't amount to much of anything. Am I suggesting that every successful business has a top notch business plan? That would be nice, but it certainly isn't the norm. Truth be told, only 3 of the last 20 businesses that I've met with actually had one. Small business owners are like snowflakes - no two are alike. And after working with them for over 15 years, I've learned a thing or two.
They typically lead with their hearts (probably why I like them so much). I always ask any potential entrepreneur why they want to open that particular kind of business. What comes next is typically a quite moving story of why this business is important to them and why it is their absolute passion and ultimate dream to bring it to fruition. But not once has anyone ever answered "to make money". Of course, from a practical standpoint, I'm sure this is part of the overall plan, but it's certainly not the driving force.
While this approach is admirable, it can quite quickly become a serious problem once they open their business and harsh reality strikes. And since I believe that every problem creates an opportunity, this is your opportunity to step in and make a difference in whether or not this business might succeed. It might be a hard discussion to have the first time, but you'll soon come to realize you'd rather have this conversation before they open their doors instead of wishing you had when their doors are closing forever.
Talk overhead. What are they planning to sell and what's the average price point? Is this product a need or a want? Is there existing competition in your downtown or in the surrounding area? Take that information and compare it to the space they are considering. Is it the right size to serve their needs. Can they actually afford the rent based on the product they are selling?
What's the plan after they open? This is where I see most businesses stumble. They are so excited about opening the business that they love that they forget that for it to survive, other people have to love it too. All too often, people put all their efforts into opening the doors and forget to set aside time and dollars to figure out how to get people to walk through that door. Anyone can open an exciting, interesting business, but if no one goes there, is it really a good business?
As downtown directors, it is imperative that we don't allow our need to fill a vacant space to overshadow the necessity of finding viable businesses with a solid plan that have the best chance for success. And we all know that success breeds success and a strong downtown business climate will have entrepreneurs clamoring to be a part of your town.
See you downtown!
The Downtown Geek