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View Full Version : Friends in business?


Steve
03-24-2006, 09:19 AM
Do you have a support group of friends who run their own businesses? Do you talk with them much about business decisions?

What types of businesses do your friends run?

tiedeman
03-24-2006, 10:59 AM
I have one neighbor ( I graduated with him as well) actually that we talk about businss all the time. *He owns the local Ace Hardware store. *He always gives me great deals as well. *I love having him in my corner for when I need to order things at a short notice

Steve
03-24-2006, 07:33 PM
That is really neat! How did he ever get involved in that?

tiedeman
03-24-2006, 08:38 PM
Kind of funny story:

He actually went to school, and received a bachelors in business management, *But while in high school and going to college, here worked in a local hardware store here. *The hardware store was horrible. *Employees never received raises (he worked there for about 5 years), no bonuses, nothing. *It was a really bad place, but it was really the only local hardware here without having to travel 15 miles south to the Home Depot. *

He left the hardware store, worked for me believe it or not for about 2 years, then finished up school. *After he finished up school he went and did some work at a local 81 Lumber and a Golf Course.

During that time the local hardware store here kept on getting worse and worse towards the treatment of customers, but the owner knew that people didn't want to travel 15 miles away, so he jacked up the prices and kept up with the attitude.

Finally, my buddys dad one day, whom is a major contractor throughout the U.S., approached him (my buddy) and asked him about going into a partnership and open up an Ace Hardware here. *My buddy jumped on it. *

Now get this, the word quickly spread, and 4 of the employees for the local hardware store approached my buddy and asked him for partnership in it together as well. *They joined forces and last summer they opened up the Ace Hardware here. *Amazing Success!!!

Since then, the local hardware guy has been losing business really bad, and he has actually put his hardware store up for sale.

Kind of a funny story.

Steve
03-24-2006, 09:36 PM
Very fascinating.

Do you have any idea how they funded it and how much it took to fund that?

tiedeman
03-24-2006, 10:15 PM
I know that they went through a national bank because none of the local banks here would give them a loan.

I guess that you have to kind of understand this city. The businesses in the downtown area kind of have the say so on the chamber, city board, etc. compared to the businesses located north of the downtown area (that is where the major busineses are located at though). The downtown area is threatened by the businesses to the north, and they didn't want to lose their downtown hardware store (it's kind of like a mob connection thing here). So none of the banks gave them a loan.

Steve
03-25-2006, 09:01 PM
When you talk to your friend about this business, what does he like most/least about the hardware business?

tiedeman
03-25-2006, 09:35 PM
I can tell that he is very passionate about it. It seems like his whole life is wrapped around it. He just got back from Dallas for a week long Ace Hardware convention thing. He is either always working at the store, or flying out to some kind of training or conference thing.

My personal opinion is that he likes the commerical side of the store and closing the big sales. They just become a commerical store (it's like an option that you do along with the regular store) the first part of this year and they are the major players in the area supplying local schools, hospitals, etc.

What he hates worst about it I feel is probably actually having to work the cash register or dealing with regular customers on a constant basis.

Steve
03-25-2006, 09:54 PM
Do you ever talk to him about how it is dealing with Home Depot or Lowes? How has he been able to carve out a niche to stay in business?

tiedeman
03-25-2006, 10:17 PM
Well, the next really major competition from him is like 15 to 18 miles away. Also, since he and the other owners live in Clare, they know a lot of people so that helps with business as well. They can provide a more personal service compared to Home Depot.

I do however admit that I still sometimes will go to Home Depot for some things that I know will be cheaper there

Steve
03-25-2006, 10:28 PM
Quote[/b] ]I do however admit that I still sometimes will go to Home Depot for some things that I know will be cheaper there
I can understand this. This is something most of us would do as well.

Do they have future expansion plans in the future or do they want to stay one store?

tiedeman
03-25-2006, 10:58 PM
I can't say the exact city, but they plan on opening up another store within the next year.

Steve
03-26-2006, 09:13 PM
There is a great book about Home Depot that I would suggest they read.

The tough thing about opening more stores is finding the funding to do so. Home Depot had some real interesting ways which allowed them to grow early on. Before they went public.

They almost had Ross Perot invest in them as well!

He missed out on a huge opportunity.

How do you think your friend will be able to handle managing facilities located in multiple locations?

tiedeman
03-26-2006, 10:10 PM
well, as I understand it the other owners want him to go start up and manager the new store for about the first 2 years, after that, it more or less seems like he will be floating between both stores.

Steve
03-26-2006, 11:37 PM
Do you have any idea the cost of buying into such a hardware franchise?

We had seen, to buy into a Quiznos, it was $25,000 just for the name.

tiedeman
03-26-2006, 11:46 PM
I could be wrong, but I am thinking around $150,000

Steve
03-26-2006, 11:54 PM
That is amazing.

Do you have any idea how much these stores can make?

How long would it take one to recoup their investment?

tiedeman
03-27-2006, 01:01 AM
Some of the stuff that I know is that of what he has told me is that the owners are on salary (that is how they have it setup). *Then annually Ace Hardware sends all the owners bonuses based on how much in sales they did. *My buddy told me about one owner of a store out in the Midwest received over a million dollar bonus one year.

Steve
03-27-2006, 05:02 AM
Very interesting.

Do you ever talk with him about marketing and advertising ideas?

How much opportunity does he have to be creative in his marketing? Or does the corporation control it heavily?

tiedeman
03-27-2006, 04:32 PM
I have talked with him numerous times about advertising. Most of the corporate handles the advertising, yet they can sometimes choose what specific thing can run in an advertisement.

What works well for them is like a store 20 miles away advertises, yet always at the bottom of the flyer lists the other stores in the area

Steve
03-28-2006, 12:07 AM
Very interesting.

With all you know about this from your friend. If he came to you tomorrow and asked if you wanted to take part in this somehow by opening your own store. Would you do it or no and why?

tiedeman
03-28-2006, 01:01 AM
Perhaps...I think if I had hands off from dealing with employees, and just dealt with sales (commerical sales) then I would do it. I never want to go back dealing with employees I think

Steve
03-28-2006, 01:09 AM
Quote[/b] ] I never want to go back dealing with employees I think

Why do you think you wouldn't want that?

tiedeman
03-28-2006, 01:11 AM
I look back at the time that I dealt with employees and it was just a headache and very stressful. They never did the quality of work that I expected or desired, their poor work attitude, and the overall lack of concern for their work. They took no pride, all they cared is that they received a payment.