CHAPTER 2: DECEMBER 1- DECEMBER 5

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Launch Day! December 1st, 2006

Most startups don’t launch on time. That would… include us.

But, a launch delayed by only one day… not too shabby. Today was an exercise in problem-solving, time management, schedule coordinating, details arranging– you name it.

The morning started off by getting the blog effort going. For principle 10– Think virally– we’d established accounts for The Hundred Dollar Business experiment on Facebook, MySpace, Gmail, WordPress, Delicious, Flickr, YouTube and more. (If you’re in our contact list & got suspicious-looking friend requests from 100dollarbusiness, please accept our apologies!)

On one hand, some of those services aren’t totally applicable, but they might come in handy, plus– they’re free. We did learn the other day that Facebook will distribute a “banner-ad flyer” to 10,000 BYU students for 1 day, for $5. I don’t know if everyone at BYU is staring down the Facebook ads all day, but if they are, that seems like a pretty cost-effective way to reach them.

Within a few hours of launching the blog, we’d been blogged about by local Ryan Byrd and had a pretty good day, traffic-wise, on the site.

And oh, the mountain of paperwork! DBAs, tax forms, bank forms, ID cards, two copies of the mall lease agreement, and that was only a part of it. We also have decided to use principle 7- “franchise” the business. This is especially critical as we have added potentially 2-3 more vendors to our pool of products, and have different detailed agreements with each company. We made vendor agreement forms and inventory checklists, to make sure we are keeping the nitty-gritty as clear and simple as possible.

I’d also like to add, that up until this point, we hadn’t spent a thing from The Hundred Dollar Business’ $100 budget. I find this amazing– because like principle 3 says, “Money is the last thing needed to start a business.” It’s TRUE! It is really, really true. All of these transactions and opportunities had been established without spending anything. Of course, there are plenty of things we could have put money into along the way, but it ultimately wasn’t necessary.

Part of that, without doubt, is because of the nature of the experiment and the support of the business community. And on the other hand, I think often that entrepreneurs limit themselves either because they feel that their idea must first have huge monetary backing, or else that there are many overhead expenses that they need in order to launch a business.

And those are both true and untrue.

It seems that ultimately, it’s what you’re doing with your total resources– not finances only. And we have been extremely lucky and had doors open right and left, which also does help quite a bit. Though, you have to work hard and see the doors as being openable, too.

Anyway, we did spend $22 for our DBA (gotta be all official!) and $4.96 for constructing/printing vendor agreement forms, and $2.55 for xeroxing the inventory checklists. But, to spend $29.51 to make our legal pathway smooth… pays for itself.

So, now we’re down to $70.49, and we’re moving into the mall tonight! And… I’m didn’t make the midnight bedtime. Again.

Opening Day At The Mall December 2

Well, so much for “go to sleep by midnight!” I guess that part of the experiment failed, because not only did I stay up all night Friday night, but I had a one-hour nap at 1:30 p.m. Saturday and kept going until–yep!–midnight last night.

But, enough of that–we are at the mall now, and things are going fantastic!

On Friday night, we got the go-ahead from the mall to move in our inventory and set up shop. Kelly Anderson from Sweet & Charming and I were up, punchy as all get out as we loaded the inventory onto the kiosk– we’ll be adding pictures to our Hundred Dollar Business Flickr account soon, so stay tuned!

By 5 a.m. the kiosk was set up with Kelly’s princess/castle retail items for children, so I headed over to Channing’s Bundt Cake Factory to pick up her cakes for the kiosk. I will tell you that when I buy a Baby Bundt cake (small personal size), I usually eat the whole thing ASAP because they are sooooo good. And guess what– we have them at our kiosk!

The mall opened at 7 a.m. For the first hour or so, I was there, and I was nervous!

Because all of a sudden I realized, I have no retail experience! None! Rachelle Anderson joined me at the kiosk a little after 8 a.m., and we were so excited! I think we probably frightened our first customer, Julie. (Picture to come!)

She works at another kiosk selling cosmetics, and purchased some of Kelly’s princess items as gifts for her nieces. We took pictures with her, and it took about 10 minutes for us to figure out how to process her credit card– eek! Luckily, we got better at that as the day went on. Thanks, Julie!

Our second customer was a big surprise– my friends from my church, the Daniels. They were shopping at the mall and happened to see us! They have a number of grandchildren, and got the sweetest tutu sets for them. We took pictures of them also– look for that later, as well!

Within a few hours of the mall being opened, we had over $100 in sales! It was really exciting, especially because when we were doing the planning for the business, the ultimate priority was “what will make sales as quickly as possible?”

Something to note is that even though we are making sales, it doesn’t mean we have made a profit yet. I know that may be a simple statement, but it is only something that really hit me as I crunched the numbers at the end of the day.

For one thing, even though we haven’t spent any money to get the business started, we will have some obligations to the mall lease at the end of the month, though we will pay off as soon as possible, because this is a “no-debt, no-overhead-killing-us ” kind of endeavor.

For another thing, the items we sell are on different consignment/commission arrangements with the vendors, so they will be paid first, expenses (taxes, employee compensation, lease, other obligations, etc.) paid next, and then the actual “profit” of the business will show up as dead last. I think that’s important to note, because it means that if I want the business to do well, then I need to plan for that with the whole picture in mind.

I left for a few hours to take care of some bank account/lease matters, and Rachelle and Kelly manned the booth for a few hours. When I came back, things were going great and we were getting a steady stream of traffic and business!

Four additional things that were interesting to experience throughout the day:

1. Inventory

We are not at full capacity yet– in fact, we still need to order and pickup product from 5 other vendors. Part of why this hasn’t happened yet is because of the busy-ness of getting everything set up this week. Another reason is that we wanted to see how business would go.

Since we know now that it is busy, we can plan what to order. In the meantime, we may have lost opportunities to sell, simply because we don’t have the inventory available yet– so that is priority one for Monday morning!

2. Salesmanship

We noticed that each kiosk salesperson has their own style of manning the kiosk and trying to make sales. The main difference was that those who are employees were bored, waited for customers to walk up, show interest, and ask questions before engaging them in the sales process, whereas the owners are proactive, setting up special events for the booth, handing out marketing materials to other kiosk owners, stopping mall traffic to give them deal coupons, etc.

Since I’m an owner– you better believe I am setting up ideas and approaches that are proactive! We want to do well, and we want all of our vendors to feel that their investment and the opportunity has been a great success. If you have any suggestions, definitely e-mail those to us at hundreddollarbusiness@gmail.com or post a comment here!

3. Financial Processes

In the course of one day, we had to learn how to use the cash register, a knuckle-buster credit card scanner, take an accounting of inventory as it was sold, for which vendor, sales tax info, cashing out the register, setting up the business bank account, how to get a money order or cashier’s checks, and how much in change/coins to start the till with.

Because we are taking the approach from E-Myth, to “franchise” the business with organized systems, it was a LOT less crazy than it could have been. Even so, we did make a couple of errors, which we will prevent by having a training with all of us who man the kiosk.

4. Presentation of Products

The products that sold well were the ones that were displayed really well, that were easily accesible & obvious to the rushed customer walking by. By late afternoon, we realized that some products had barely sold, and it was because of the visual setup.

We are fixing that over the next day or two, and will also be have some sample trays and special events to help customers experience the product, both in a visual and tactile manner. Remember– if a customer can pick up an item or otherwise get attached to it, they are more likely to purchase. It was great to realize that right away and correct it, and we expect to see a dramatic increase in sales for those products over the next few days.

And now, it’s time to get back to the mall! For more info about products we will be supplying by Tuesday, check out this post. We will have Nutty Guys nut trays, Santa hats, and holiday books and games, including Max Lucado storybooks.

Come by and see us, anytime– we’re at the Provo Towne Centre mall in South Provo! If you mention this blog, you’ll get an extra big smile and a special treat!

Wow! Tuesday, December 5th

Hi everyone!

I woke up this morning, and saw about 10 new comments on the blog, and then checked the blog stats and was blown away by how many people have heard about the experiment!

We started the blog on Friday, and had 30 visits each on Friday, Saturday, and Sunday. Then on Monday, after a couple blog posts by some local bloggers, we jumped to 150 daily visits, and were really excited about that! And today, we had 1,798 visits, with about 2,600 page views!

I couldn’t get the internet all day from the kiosk, so this is my first chance to say, thank you! Thanks for reading, and for your comments of support and suggestion. We’ve heard a lot of really great ideas from you, and it helps us to refine what we’re doing.

I’ll be posting about December 4th and 5th later tonight. For now, we just got a delivery of Nutty Guys products this afternoon, so I’ve got to haul those boxes in to the kiosk. Yep, manual labor– it’s a good thing.

An exciting update is that a local video production company, CopperRain, has offered to do some video interviews for us, which we will be posting here and on YouTube– stay tuned!

And keep reading, and let us know what we are doing right/wrong. We’ve only got 26 days left, and we need to make them count!

December 4: Owners Don’t Sleep In

So, you know that “go to sleep by midnight” part of the experiment?

Yeah. Not happening. (As I write this, it’s 1:32 a.m. And I’m at the mall still).
But in breaking that requirement so often, I finally learned why it’s so essential. Sunday night, I was up until 6 a.m. I’m not advocating that, I’m just saying it happened.

I was working on our finances, setting up the accounting systems we are using, forms, etc., so that it’s more of a no-brainer at the end of the night. (Principle 7, “Franchise” the Business so essential processes are systematic.)

And so, of course, Monday was the morning that my phone decided to basically explode, so I didn’t hear the alarm nor the frantic phone calls from my worried kiosk people, Rachelle, Kelly, and Channing when I didn’t show up because I was asleep.

I woke up at 10 a.m. Ideally, I was supposed to meet one of our vendors at 8 a.m., bring the spare kiosk keys to another vendor who was bringing in supplies, open shop for Rachelle to start selling, and… go to our publisher-distributer to pick up the books.

There’s nothing like waking up and realizing you’ve already got apologies to make to 4 people, plus reschedule appointments. Argh.

Anyway, so owners don’t sleep in. (Or maybe just, “owners don’t sleep”– anyone like that for a t-shirt?) They just can’t.

But, I did get the books, and met up with everyone, etc., just not exactly on schedule. I’ve always sort of wondered why entrepreneurs and startup business owners are a bit flaky. Must be the sleep deprivation. And the gazillion tasks on your mind 24/7!

So, it was a slow day at the mall. We heard that Mondays and Tuesdays are really slow, and we know now that they are! Most of the day we were under our average sales from Saturday and Sunday, and then at the end of the night, we had abig order which made everyone happy again.

We have set sales goals of $1,000/day. Understandably, that’s not currently realistic, especially not on slow days. But, at least it pushes us forward more than if we set goals of $100/day. And I’m intent to find a way to make that happen.

(That’s about average for a kiosk at this mall during December, anyway– probably later in the month, though).

Also on Monday, we heard news from Nutty Guys, that our order was ready and they were going to deliver it to the mall, saving me a 60 mile round trip. What nice people, seriously!

We are selling their bags of packaged yogurt pretzels, mixed nuts, pistachios, pecans, bananas, and also their gift trays of nuts & fruit, nuts & candy, or mixed nuts. If you’re in Utah County and want to order in advance and pick it up at the mall, we’d be glad to help you out. Give me a call– our number’s on the Contact Us page.

Also, we are learning a lot about visual merchandising. The better our display, the more interest our customers have in our products. It makes sense, but it’s not something I’ve ever done, and it can be discouraging to realize that we just don’t know enough fast enough yet to make our kiosk a Taj Mahal of merchandising. But, it’s night and day looking better than when we first slung our products up that first night.

Alright, on to Tuesday!

December 5: Puppies & Kittens Sell

The kiosk next to us sells sunglasses. I’m not sure how that relates to puppies and kittens, but they have lined up about 10 of these fake-realistic-looking puppies & kittens that have a mechanism that allows them to “breathe”.

If I had ten cents for every time I heard a customer comment on them, or run over to look at them, this experiment would be done and I’d be in Hawaii.

What is interesting, though, is that people look at the kittens– it attracts their attention– but they don’t buy them. (The sunglasses do alright though, but the kittens don’t guarantee sunglasses sales.)

After a few days of watching that, as well as the other kiosks around us, we are getting a sense for what works with retail sales, and what doesn’t. Just for fun, here are my basic observations:

1. Packaging blocks the client from interacting with the product. They need to pick it up, hold it, try it on, etc.
2. A gimmick will grab attention, but not necessarily close a deal. And if you’re obvious about it, it doesn’t even grab attention, it just bugs them.
3. Too little inventory has “ghetto” written all over your store. We only had one vendor’s supplies for a few days, and kept getting feedback that we needed more stock. Check!
4. If you approach the customer the second they walk over to the kiosk, it scares them away. (This usually doesn’t apply to our friends, though.) Give them a second to acclimate, and then be subtle in your approach.
5. Don’t first tell the customer about the products you like or that you would buy. First evaluate what they like, who they’re shopping for, what they like, etc. It’s like a conversation, except that what you have to say is extremely secondary.
6. Be quick about the check-out. Fumbling with credit cards and receipts doesn’t inspire them to come back.

Anyway, that’s something we’re learning–how to approach the customers better in a way that is more likely to lead to sales.

Now then, I already blogged about this for a minute, but when I woke up today and saw the nearly 2,000 visitors, I was stunned!

We are so excited that the word is getting out. (Of course, we wish all of you lived in Provo, UT and could come visit our enterprise…)

And in the meantime, we are trying to think of clever ways to maximize our website and perhaps make ordering or products available on the Internet. Give us a day or two. And thank you to those who have made excellent suggestions, which we are looking into doing.

We’ve heard some comments about why we went with a “brick and mortar” rather than an online enterprise. Especially since I’ve been working for an internet startup for the last several months.

That’s a great question. My first thoughts are:

1. My main skills are not technical, rather, organizational/operational. The learning curve for me on an internet project could be steeper, and I have limited time w/ the 30 days thing.

2. There are great things to be said for making money from an internet business. Great things. But, I think you can lose a lot of what I would consider “traditional” business experiences, and I wanted this experiment to be an application of what I’ve learned about good business.

Interacting with customers. Sales. Opening and closing shop. Taking an idea from just being an idea to being fully executed, operational, and cash-flow positive (Don’t worry– I’ll let you know when that happens!) Using traditional operations infrastructures– setting up the bank, doing inventory, and seeing the concept realized in a tangible, visual storefront, etc.

Who knows– maybe the next Hundred Dollar Business will be strictly on the web!
As for what’s ahead, we’re excited to work with CopperRain tomorrow on the video interview! Look for this soon.

Ok, that’s all for now. See you tomorrow! Oh– one other thing– if you have retail experience, mall experience, kiosk at Christmas time experience… and have any tips, we’d be glad to hear your suggestions. We are doing well, but we want to be doing excellently.

Thanks!

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