BEN TYSON: Hello.
And welcome to 2016 in the Google Small Business
Community.
My name is Ben Tyson.
And it's a new year, so that means it's time
to start that new business.
With that in mind, we've invited small business expert
and author Julie Gordon White to give us
her best tips and tricks for business planning.
Julie, thanks so much for being with us today.
JULIE GORDON WHITE: Hi, Ben.
Great to be here.
BEN TYSON: Can you tell us a little bit about yourself?
JULIE GORDON WHITE: Sure.
Well, I've had the pleasure of working with thousands
of small business owners over the last 12 years
with my mergers and acquisitions firm and then my book, "Exit!
12 Steps to Sell Your Business for the Price You Deserve"
and my company The WELL for Women
Entrepreneurs with our online training program
called Accelerate!
BEN TYSON: Well, Fantastic.
Well, today, we're going to talk about starting
a brick-and-mortar business.
Now, it's no secret that small businesses
are really big in the brick-and-mortar game.
What's interesting, though, is that the SBA
shows the small business sector in the US occupies 30% to 50%
of all commercial space, which is about 20
to 34 billion square feet.
If you're a small business owner, in your opinion,
what should you consider when trying
to launch a retail space?
JULIE GORDON WHITE: Yeah.
Well, starting a retail business is tricky business.
So start out by really understanding
what the fixed expenses are.
And the number one fixed expense is your rent.
Yes, you've got utilities and insurance.
But rent is the thing that's really
going to make you or break you.
So the stats are for clothing-type retail,
high-traffic retail, rent should be about 7.6% of your revenue.
And if it's a destination location--
let's say automotive or a maternity store,
you're going there for a specific reason-- about 1.5%
of your revenue should be right.
But if you're in a high-traffic location or metropolitan area,
it's going to be a little higher.
So you've got to be really, really
careful about your lease.
If you sign a three-year lease, Ben,
you're on the hook for that, whether you're making money
or not.
Right?
BEN TYSON: Yes.
JULIE GORDON WHITE: So you've got to be really careful.
It's important to have either a great commercial real estate
attorney or a commercial real estate
broker who can negotiate that lease for you
in the beginning with the most advantageous terms.
BEN TYSON: Well, I'll tell you what,
signing a lease, that scares me.
And it seems like it would scare most brick-and-mortar-type
businesses.
And the question is, is it possible to kind of test
out a brick-and-mortar experience
before you actually sign a lease?
JULIE GORDON WHITE: Yeah, I think that's a great idea.
There are farmers markets everywhere, expos.
Pop-ups are really big.
But a fun little piece is I have a client that started a t-shirt
business out of an Airstream, out of a truck, basically--
BEN TYSON: Wow.
JULIE GORDON WHITE: --parked at a farmers market.
And now she has over three retail locations,
some pop-ups in airports.
And it's a multimillion-dollar business.
BEN TYSON: Wow.
JULIE GORDON WHITE: Pretty cool.
BEN TYSON: That's fantastic.
So one of the common mistakes, I think,
that a lot of folks in the retail industry make
is they hire the wrong people.
So any advice on how to start hiring staff?
And then, furthermore, is there a good kind of best practice,
if you will, in regards to managing those overall labor
costs?
JULIE GORDON WHITE: Yeah.
Did you see me take a big breath right there?
That's such a big-- along with rent,
hiring is like the number two, tied for number one issue--
people right?
And so really, business owners need
to resist hiring family and friends.
That's the first go-to.
Because it's easy.
You know them.
You trust them.
But it's hard to run a small business,
especially if you've got to be open seven days
a week in retail.
And it takes a toll on people.
And so if you actually have to fire them--
it's really hard to fire, anyway.
And if you have to fire your family member or your best
friend, that's a problem.
So really push yourself to hire outside of the business.
Pay attention to scheduling.
Try to avoid overtime, where you get in trouble.
And make sure that you don't work too many hours.
Because retail can be pretty exhausting.
BEN TYSON: That's a great point.
I think I would probably go to my best friend first and say,
hey, do you want to work for me?
That's some great insight.
To sum everything up, what's one thing
that you want every small business owner to remember when
they're just getting started?
JULIE GORDON WHITE: Absolutely.
Well, when you start one retail business, that's great.
But don't be afraid to think big.
Think multiple units, because that's when you're really
going to start to make money.
But don't shoot out too far.
Make that one unit really, really good.
So start right where you are.
Make it really, really profitable.
Get your systems down.
So after you do those two things,
you've got to focus on selling.
Sell your way to success.
Because you can have the most beautiful store
location in the world.
And if people aren't coming in and buying,
you won't be able to stay in business.
So sell your way to success, Ben.
BEN TYSON: Fantastic stuff.
And if you want to learn more from Julie,
you can attend her free webinar every Wednesday
at 10 AM Pacific, called The 21 Day Business Plan.
We'll also post more details on how you
can sign up in the community.
Julie, thank you so much for being here.
JULIE GORDON WHITE: Thanks.
My pleasure.
BEN TYSON: And thank you for watching.
As always, all of our content is available on g.co/gsbc.
And please follow us on Twitter, Facebook, LinkedIn,
and of course, Google+.
Until next time, I'm Ben Tyson.
Thanks so much for joining us in the Google Small Business
Community, the place you go to get the help
you need to succeed on the web.