Chapter 1: The 5 Rules No One Tells You About Retail
My name is Mercedes Gonzalez. I'm the director of Global Purchasing, a strategy company based in New York City. What we do is we help open and run successful stores.
For many, many years, we have seen a lot of boutiques go out of business because of the big boxes, because of the Internet, because of many other factors. We have come down to a formula of success that we could help you run the store and actually grow and be profitable.
One of the mantras that we like to start with in getting our clients in the right mindset is this: "How do I work as little as possible for the most amount of money?" If you have that mindset from the first day you open up your store, you're going to be successful.
One of the biggest problems is that people go into business, especially opening a boutique, for the wrong reasons. I've come up with a list of 5 things to avoid or to think about when you're first opening up your store. The first thing is, you have to remember this, and it's really hard, you're not opening the store for your ego. A lot of people, like when I talk to stores that are in a distress situation, I ask them, like, "What's going on?" or, "Why did you decide to open up a store?" the first thing they'll tell me is, "Because I'm such a good dresser. All my friends tell me I'm a good dresser. My husband tells me I'm a good dresser."
Guess what, being a good dresser is not a good enough reason. We open up the store for one reason. That is to make money. I don't care if you're selling high-end couture clothing or peanut butter and jelly sandwiches. The bottom line is to make money.
The next thing is we're not buying the things that you like. That's another mistake that people buy. They buy the cute things. They buy the sweet things, the things that them and their friends will wear, but, guess what, you and your friends will put your store out of business. You need to buy the things that sell. As a buyer, that's the hardest lesson to learn, how to separate my own self, my "good taste" versus what really sells.
The next thing you have to think about is the big picture. So many retailers come to me and they say, "I want to up a small boutique. I want to run and operate it myself." Why are you thinking so small? It is really up to us. Really, the horizon is open to us. Thinking big, and I'm not saying start really big, you're not going to start the size of a Macy's, but the idea that you can allow yourself that kind of freedom to think that big is really important.
The idea is not to think about opening up one store. The idea is to open up many stores. My favorite number is 3. I always feel that I could have 3 within a certain area that I can travel to in one day, but they don't cannibalize each other's business.
The fourth rule, and this is a really important rule, and a lot of people just really freak out when I tell them this, but don't plan on working in the store. I don't want you to be the salesperson. I don't want you to be the "Hi, can I help you?" kind of person. You're going to find out that buying is a full-time job. Being in the background, doing the paperwork, doing all the other administrative things really takes up your time. You cannot open up other stores if you don't set operational procedures in place.
Let's talk about that for a second because a lot of people tell me, like, "Mercedes, how am I going to find people that I can trust?" Here's the answer. You don't trust them. If you don't trust them, you have to set up operational procedures in place so that there's a system of checks and balances.
The other thing people say, "Mercedes, in the beginning, I can't afford to have employees." It's not an option. It's not like you're going to say, "I'm going to open up the store without electricity." That's not an option, right? From the beginning, you have to think about all of these different procedures in place. People say, "Listen, I can't really afford to own the store and run the store and do everything together." This is my example to you. Sam Walton open up Walmart while still working at Ben Franklin store. If this man can open up Walmart, you can open up a boutique.
The fifth thing is don't quit your day job. Again, people tell me, "Listen, how do I run the thing?" It's a matter of discipline. I feel that if you have these operation procedures in place and you have this discipline to work 9 to 5 and still manage your store and run your store, you'll be able to cookie cut your operations quickly and open up more than one store.
If you keep all of these points in minds, you'll be able to keep the mantra of working as little as possible for the most amount of money and having a very successful store.