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Steve
07-22-2007, 07:54 PM
This was originally posted in another area and I didn't want it to get lost in case some of you out there are interested in learning about the video rental business.

Originally posted by the Big Lebowski.

Quote[/b] ]I guess I should have mentioned that in the first place.

I own a video store and last year we moved to a larger location to add tanning. Some of you are scratching your head right now going "huh? tanning?"

Others are aware that tanning in video stores are becoming quite popular with video stores since the video sales are slipping little by little (yes Netflix and VOD downloads etc.). It's a great add-on because we have to be there anyway. Downside? The equipment is expensive. Beds cost from $4000 to upwards of $40k - yes I wrote that correctly $40k! And everyone wants to tan for $1. I have three beds - all bought new. I won't say how much I spent on the latest replacement bed (new this year) but it was more than I would spend on a reasonable ZTR.

I knew getting into it 5 years ago that it wasn't a long term business for me. I have been all along looking into "what's next?" I have gotten close to re-opening a closed ice cream stand, buying an existing Laundromat and taking over an existing restaurant (many years experience - very tough biz) but ultimately after realizing the minimal expenses plus seeing the success my brother has had (still growing) and my brother-in-law doing it part time as he is a full time fireman, I started looking further into it. I have to admit, I paid $10 for a LOC start up info packet off eBay. But only after discovering other sites offering "selling their secrets". They all seemed like carbon copies of the other one. Just today I found this site. I read the whole 98 page e-book and watched all the shows. Totally great site. Very happy I found you guys.

I belong to other forums (video + tanning and others) and I have to admit, you guys are extremely nice and very helpful. Those places I don't go to as often anymore are vicious - lots of flaming and lots of angry people.

Steve
07-22-2007, 07:54 PM
WOW! These are some great stories! Can we see some pictures of your establishments?

I think your business insight and pictures will help many others reading this to seriously consider what they are doing before they start their businesses.

Big Lebowski, have you ever considered doing something like pizza and movie rentals? Where you could order a pizza and have it delivered along with a movie? Or something like that? What have you liked or disliked about the movie rental and tanning businesses?

Steve
07-22-2007, 07:55 PM
Originally posted by the Big Lebowski

Quote[/b] ]Well just as any business it has it's ups and downs. I would say that the video business has been pretty good to me over the last 5 years. My income needs have outgrown the limits of this business. It is well established and I have my wife and 3 other part time employees - as can be expected of a smaller semi rural area. We are not blockbuster and we are not in the lions den as I call it. No big video chain or independent would want to open up shop where I am because the area population pull is too small for them to profit. Whereas a small independent could survive very easily.

I would say the biggest downside to running your own business (something younger entrepreneurs wouldn't necessarily appreciate) is the lack of benefits in terms of health care etc. The positive benefits are obvious to most, flexible schedules & money potential etc. My business doesn't allow me the luxury of affording health insurance for me and my wife. I would be working for the insurance providers. I am pretty uncomfortable with not having any. Paying as you go can quickly turn into - going and really paying for it. Such as losing your business and more if something terrible and expensive happened. I currently have my "foot in the door" with a job that is only fill-in occasional work. However since this company does state work, they are required to offer certain wages and benefits. Which is full company paid medical and more. It's got to be the most crazy awesome benefits I have ever seen. Well anyway I guess I'm just saying that being your own boss is great if everything goes your way and you have some safety net. Without it, you could be in big trouble.

Starting the lawn care business will allow me to get in at my own pace and jump out if needed without having leases, deposits and other obligations to worry about - like you would have in a store front location. These people want to get paid regardless and they will not think twice about shutting you off, locking you out, ruining your credit or taking legal action. You wouldn't necessarily have this issue with lawn care. You could sell or give away accounts if need be. This is a real nice luxury to have. This even goes for a situation where you get a job offer where you can make the same money or more and with great benefits. You could literately walk-away from this business without hurting yourself just by taking minor steps upon exiting.

So enough about that. I JUST built the web site like last week. After seeing the food cart guy down the street had a website and after an employee mentioned that we should have one, I put one together in a day. So it's not big flash and it's not completely done but it is there. Yes I felt the need for a disclaimer. But I have some photos of the store on the website. Here's the link. www.fp-eb.com (http://www.fp-eb.com)

http://www.fp-eb.com/images/imag0037_3awe_fup5_ub13.jpg

Steve
07-22-2007, 07:56 PM
Originally posted by the Big Lebowski

Quote[/b] ]Oh I forgot to address the pizza thing. Yes I have thought about it. We would kill it here. But unfortunately I live in an area that has stupid amounts of pizza places. I even have one in my plaza just 3 doors down. There are 3 pizza places in less than a mile and several more just 15 minutes away. Not to mention the convenience stores have pizza too.

A popular add on for video is take and bake. I would definitely give this a try first and then if it worked out try delivery if we weren't so saturated enough already. My only option would be try it after a one or two places close. BTW, most of these pizza owners are video members, they would not like me very much if I rolled something like this out. It would however be pretty close to a no-risk venue for us. What's the worst that could happen, I eat a lot of pizza over the course of a year or so?

http://www.fp-eb.com/images/store611.jpg

Steve
07-22-2007, 07:58 PM
Orignially posted by the Big Lebowski

Quote[/b] ]I forgot another thing. I did try a combination deal with the former owners of the pizza place in my plaza. It was like pulling teeth to get my money since we set it up for him to collect the cash, and then he would give me the money afterwards. This ticked off the other pizza owners and they stopped coming in - this went on for some time even after I stopped the cross promoting. They are back now.

Once the new guy took over and I met him. I knew I definitely did not want to be attached to him in any way. I won't even patronize his business. Even when I forget to bring lunch, I have it delivered from another place if I need something. Mostly I bring my lunch. A much wiser, healthier and cheaper route. Bringing healthy food to work forces you to eat healthy. A problem I would have if I bought my lunch everyday.

http://www.fp-eb.com/images/store19111.jpg

Steve
07-22-2007, 08:07 PM
I guess that shows the difficulty a business owner faces when trying to cross promote with other businesses. It seems it can be very difficult.

As I was reading it, I was thinking, have you considered cross promoting your lawn care and video business?

Like sign up for lawn care service and get X free video rentals? Or rent X amount of videos and get a free lawn cut with a maintenance agreement?

Big Lebowski
07-23-2007, 11:04 AM
I have thought about it actually. I didn't go as far as to think about what I would do though. Your ideas are pretty good. I have to admit, I hate giving anything away. I have had a few members mention in the past that I should do a rent 10 get one free type thing. But this only benefits the member. Any promotions, give-aways or discounts must always have the exterior appearance to benefit the customer but the underling point is to make the customer react/respond in a way that would be beneficial to you. The only time you should be giving anything away without cause, should still give you some benefit. For example: Donations. I get hit up all the time, sometimes multiple times per day. First rule is, never give money - always a service or product. Second rule is, never give anything away that is not in writing before hand. If they are just showing up out of the blue, chances are they are not organized enough or even legit. Either way, you shouldn't participate. The letter should state who they are, what they are trying to accomplish and have contact info. All others should not get consideration. There are many con-artists out there that know they can get a lot of freebies for simply pretending to have a cause. If for whatever reason you do not wish to participate, ask them to leave the information and you (or your accountant) will look it over for consideration and will contact them if it fits in your budget. Second rule is, do not donate outside of your market - this is a no-brainer but it still needs to said. You'd be surprised of how many people that didn't even know I existed show up at my door looking for a hand-out and that's because they live 3 counties away! They all want their event to be a success and they will travel very far to get something from you. Third is, if your name isn't going to be mentioned or at the very least a business card showing at the event - then don't do it. These folks should be well aware that if they are looking for a hand out then they need to give the businesses an incentive to help their cause. I am a big fan of yearbooks and event programs (school concerts etc.). In this case you give them money but you are getting an ad placement and lots of good will for supporting the event. A little off donation topic here but I never - ever place ads on a restaurant placemats. This is as close to a scam as I've ever seen one. They will try to convince you that they will be printing 1000's upon 1000's of these. Keep in mind that these people are in the business to get your money. They could care less how many are actually printed or if they are even being used. I can assure you that many of these companies under print the amounts they quote to you, because paper, ink and set up all cost money. The placemats are then given to area restaurants for free. I can't think of many restaurants that I like to go to that has printed ads for placemats. Any restaurant owner that is concerned about image, will not use them. You can spend money on this type of advertising if you want but me personally, I am completely against anything such as this - that will allow a scammer to offer you nothing more than a promise for your money. You simply cannot verify it. The only time you should be giving away something that does not advertise your business - should still benefit you at tax time, that's it! Now I'll mention the only exception. You have a customer that does not meet any of the requirements above but you want to show good faith and make them feel all warm and fuzzy inside about you, then do it. This will not happen very often but it will come back to you 10 fold. I promise. Oh and if you didn't catch it - you still benefit.

But back to the rent 10 get one promotion. I am located far enough away from the competition that if somebody owes me enough money they will pass me by and rent elsewhere, but still far enough away to not be in direct competition. This type of promotion or reward system is called a loyalty program. The convenience stores have them with their coffee. They are trying to get you to keep buying from them and not the guy down the street. Since I have no other video stores near me, I chose not to give away something that they are already going to purchase. This could be a valuable lesson for others here. Say you are the only guy in town that applies chemicals - do not give any of it away. But you might consider a free cut if they prepay for the year or sign a year long contract. Those kind of incentives make sense. You are rewarding loyalty. A side note here too. I also believe in rewarding long term employee loyalty - giving a raise yearly just because they are still with you. It costs a lot of money to train someone new, even if they are experienced. Training people constantly is a huge distraction. Putting employees in a position not to consider leaving you based on wages is money well spent. Everyday they should get better as they gain more knowledge because they are exposed to new situations everyday. Constantly having somebody green not only are you constantly starting over but it can be quite exhausting talking, showing & training somebody instead of focusing on the work. The only positive to hiring new employees occasionally? You - yourself can get better at it and you can learn from your own mistakes. For example: "After that last guy I hired, I always want make sure to mention this..."

I also remembered that I did do a another cross promotion with start up business near me. They were members of mine and what I did was offered 1/2 price gift cards ($5 gift cards for $2.50 each) and they were to use them anyway they wanted. They advertised them as "Buy This Service And We Will Give You A $5 Gift Card To..." And instead of charging them for the gift cards I traded them the cost for services they do. So no out of pocket expenses for them, they give away something free, attract attention to themselves and I got a little light shining on me too. Sounds great eh? Well they are not in business anymore. For a number of reasons, but mostly because they were expecting the world but they were under-experienced and basically not very good at getting their message out.

Steve
07-23-2007, 11:29 AM
WOW that is an amazing post!

So often I read articles that say most small businesses fail because they fail to promote themselves. They fail to market their business. You really seem to have had many experiences with many promotions.

Reflecting back on your experiences, have any promotions you have done, really stoodout as being successful? Or ultimately is the amount of time spent on promotions a zero sum gain, in which I mean, you might gain some profits but it breaks even with the expense it took to promote the concept?

Big Lebowski
07-24-2007, 12:46 PM
Most of my advertising and promotions results in a break even situation. That's fine. It's better than doing nothing at all.

Even wasting money on certain advertising will educate you in what is best for you. When I first opened, I advertised with 2 small community newspapers. One was barely in my market. Their actual core market had another store in it. I even did movie reviews for the paper in trade for free advertising. Pretty great idea huh? Well I finally decided to check my results of the advertising. I decided to offer a rent one get one free in the paper and you know how I feel about giving anything away for free. After two weeks I got not a single coupon redeemed. Needless to say, I stopped advertising and writing the reviews. I did try the review thing in the closer paper but they really didn't seem to have a grasp as to what the value this sort of venue added to their publication and it showed in how they displayed it. They made it look more like an advertisement instead of more like an article. So I eventually stopped that too.

A very valuable lesson I used to teach when I was in the restaurant business, was that I would take my managers and "shop" our competition. The rules were to never - ever focus or talk about what they were doing wrong (say like dirty bathrooms etc.) but rather only focus and talk about what they were doing right. Then we would take that back with us and discuss how we could improve in that area but more importantly - be better than they were at it.

I should mention that I was in the full service restaurant business but I want to give an example. Most people look at the quick serve industry (McD's Burger King etc.) as fast food. What many people miss about them is in the obvious - they are really great at take out. Think about that for a second. Not fast food but really great at take out. So good in fact - you don't even have to get out of your car! Only recently full service restaurants have taken notice of this. Applebee's, Outback and others now offer curbside take out. They have paid attention to what quick serve has been doing so well for so long. They have finally woken up and realized there is something to this. For years I focused real hard on the take out end of our business. I didn't take it to the curbside level but I can assure you, we did it great. What I realized was that it cost us less, took less employees and less employee distraction to serve our customers take out - even with the cost of paper products. We now had more time to focus on those folks that did sit down at a table. What we needed to do was to make sure they got the same great experience in those containers as they would have if they were sitting and eating in the restaurant. This was key! You only have one opportunity to get take out right. One mistake and I can promise you, I would end up refunding the whole meal. It was all in the details.

But I guess my point is to know your customers, and when you do - you will know how to get them to respond the way you want them to. Know your competition, and if you are really paying attention you will know how to do what they are doing right, even better.

Just today, Netflix has announced that their subscription membership has declined for the first time since they started their concept. Blockbuster got a late start but they studied their competition, and did it better. You can return and rent movies at the local store with your subscription membership, whereas you cannot do this with Netflix. Blockbuster definitely got their message across to their target market and their customers have reacted exactly the way they wanted them to.

Steve
07-24-2007, 07:27 PM
Thank you for that insight. It really gives us all a lot of ideas. If a lawn care operator really wants to improve their business, they should study their competition and see what they are doing better.

Also you made another great point about checking to see if your advertising is working. How often do any of us put an ad somewhere and then because we see it, we feel good about it. When we feel good about it, we feel that it is working but it might not be.

Doing a movie review in the paper was a great idea. A lawn care business owner could probably do something similar by giving lawn care tips.

Let me ask you this. What would you do if you were in a similar situation to Lee with his overnight global media attention on the bikini lawn care service he offers? How would you capitalize on all that?

Big Lebowski
07-24-2007, 07:59 PM
I would definitely look into the franchise thing but also look into somehow trademark/copyright/patent it.

It might be a good idea to hire a PR (public relations) person.

You know Hooters started with one location, and have grown tremendously. They have their own airline, credit cards, magazines - and tons of other stuff. The product marketing is insane. I would imagine they make almost as much on the products as they do on food! They have corporate owned locations and franchised locations.

But I would absolutely not let this go without speaking to other people about what/where to go next. A PR/marketing advisor might be the ticket. I have read about companies outgrowing the limits of it's founders. They usually hire people that can handle the job and they either remain as largest shareholders with no real involvement or Executive CEO's that basically just oversee what others are doing or they sell the concept while it's hot (always keep a stake in it though) and walk away never needing to work again. The founder of Ebay is an example, he hired a CEO, it got to big for his skill level.

This could be something big, or it might just be a brief 15 minutes of fame. Either way I would take it as far as I could. I would keep the spotlight on me as long and as far as I could. That would be my advice. Here some quick thoughts, have Tiger Girl contests, have the Tiger Girls show up for events (these don't actually have to be real lawn care girls), make a Tiger Girl calendar each year, roll out a clothing line with t-shirts printed with sayings like "I'm a Tiger Girl" or smaller infant shirts saying "Tiger Girl in training" etc. The list is endless. But ultimately, like I said milk it as far you can. Maybe even books and DVD's lawn related or not.

Steve
07-24-2007, 08:34 PM
Fantastic ideas! I started another post on this topic.