My family has historically owned our own retail business; however, it is not like we sell necessities; our commodities are luxury items. This means, during the lean times in 2008 and (since we have owned it for over 100 years) even during the Great Depression, we have problems. Over the years, thanks to large companies overtaking the market, we have closed our 40 something stores down to just an affiliated 4. Ouch. Within the next 10 years, we will most likely be down to 0. I know my mother and her sister both plan on closing theirs as soon as they can. My mother has plenty of debts to finish paying off, so it likely won’t close for five or six years.
This is sad and unfortunate and tragic to me as I hold great pride for having had the business in my family for over 100 years, but due to the change in public opinion and the unforgiving monopolizing of the industry, our stores and similar businesses are just frankly dying out. The tragic part is that in the instance of my mother, she made some very poor decisions that did not help and have turned the family against the idea of owning these stores. It is also sad because it was her dream and it has failed despite literally all of her efforts.
However, over the years, besides the depression, anxiety, and stress, I have witnessed multiple other drawbacks.
- People who don’t listen to their warranties WILL try to sue you. Come on, it’s contract law people. This is why it is always vital for you to read your terms and conditions before you sign anything. For instance, many larger companies now have small clauses about arbitration and other similar situations, which means they can get out of bad press and courts with ease. Unfortunately, most of us like having cell phones and other luxuries, so we cannot avoid such clauses.
- Credit card companies legally can hold thousands of dollars for a year. If your business only makes about $50 to 60 grand a month, this can largely affect whether or not you can pay your bills.
- People will commit slander, libel, and most likely protest against your product. This is why it is important to maintain your warranties, keep within the law, and watch your ratings on sites like Angieslist.com and Yelp.com. Encourage loyal customers to review your services with five star statuses.
- Be Professional. I cannot emphasize this enough. If your employees look sketchy, the sketchier the cliental you will have and the more likely people will turn their nose up to your services. Also, don’t volunteer business trade secrets to the public as there is no reason for them to know everything about how you run your business.
- Know your business. Know the laws and current legislation concerning your business. Changes in these can literally make or break your business. My grandpa and mother consistently attend legislative meetings and even team up with the competition in order to achieve the greater good for the industry (if only Congress could do this!).
What small businesses have you worked for or ran and what are some problems you have experienced?