Category: Retail

Can love and business ever thrive under a hectic and sometimes harsh environment? Apparently they can. For Eric and Susan Gregg Koger, they are living proofs that love conquers all including business, as they came a long way as far as their personal relationship is concerned. The Krogers love story bloomed together with their online retail business, ModCloth an entrepreneurial venture they both started from scratch which became a huge business success.

Susan started ModCloth with the help of her then-boyfriend Eric in 2002 while they were attending college at Carnegie Mellon University. Susan has always loved anything vintage, and would go to local thrift stores and browse for hours on end so much so that she would end up buying clothes even if they wouldnt fit her or even if they werent her style. Her collection became huge that Eric convinced her one day to set up a site where she can sell some of her vintage finds. Thus, came the birth of ModCloth.

Like most business success stories that started from scratch, Eric and Susan launched ModCloth in January 2003 during winter break. They operated the site from Susans dorm room, with Susan personally fulfilling orders and maintaining a full course load at the same time. Eric, with his web hosting and designing experiences, provided the technical support for the site. They both decided to run the site full time in 2006 and expanded their merchandise from one-of-a-kind frocks to multiple vintage and retro-inspired pieces from independent designers.

This business success story gets better and better. Eric and Susan married later that same year and moved into a house in Pittsburgh and later moved into a converted steel mill in Pittsburghs Strip District to accommodate their expanding business.

Since then, ModCloth continued growing, from personnel of 16 to more than 138 employees ranging from fashion stylists and writers to web developers and fulfillment staff. They have also diversified from vintage and vintage inspired clothing to indie accessories and dcor. They also carry indie labels such as Tulle, Stop Staring, Gentle Fawn, and Jeffrey Dakota Shoes.

What sets ModCloth apart from the rest is that most of the employees, including the founder, are women in their 20s just like their target clients. They have firsthand knowledge to what women their age want and what the current trends are. One major contributor to their business success endeavor was enlisting customer involvement and participation by launching contests through social networking sites as well as the companys blog for new names of indie labels and submission of photos of stylish fashion ensembles.

Customers are ModCloths top priority. Envisioning ModCloth in the future that will imitate the feel of combing through racks of clothing in search of the perfect outfit, it has attracted investment backers which make this vintage clothing company an even bigger force to be reckoned with. With this kind of guiding principle in a company, the rest will surely fall into place just like love. Truly an inspiring business success story!

Consumers are what make the world go round. They buy, they haggle, they travel from place to place, they complain, they praise, depending on how pleased they are with the service or product that you are providing them with.

So, while consumers can be a hassle at times, they do serve a purpose. Without them and their willingness to spend money retailers, guest home owners, and public home owners would be out of jobs.

Consumers hold so much sway over the rise or fall of a business that it is frightening. A consumer can sue, file a claim, or cause any number of other problems for a business. When all of that is added to the types of potential problems that are already present in businesses (like employee injury, theft, natural disaster, vandalism, and etc) then it is understandable why an owner would want to get back a sense of control.

You can never truly enjoy the running or a business when you are constantly worrying about everything that could go wrong. There are so many things that could come up, it is a wonder why people would be willing to even own their own businesses at all.

For those brave individuals that do just that, these are just a couple of the different types of insurance that you may come across.

Retail Insurance – Retail businesses, service businesses, and trade contractors are eligible for retail insurance. These business owners receive protection for their personal property, the building that their business is being run out of, business liability, and also loss of income. Most places will offer you the choice of picking and choosing what sort of coverage you receive while using this type of insurance. This method is a popular one because many business owners do not want to have to pay for flood coverage if they live in a high elevated area surrounded by little to no water sources. Why would they? It would be the smarter choice to take an option like that from their policy plan and replace it with a type of coverage that they would need in the future. Retail insurance policies can be obtained by retail outlets, boutiques, takeaways and shop owners. Even the minimum coverage of retail insurance is more than the maximum coverage that some policies offer. For example, the minimum coverage for retail insurance includes:

oL 3,000 worth of damage to glass, store front, and etc.
oL 1,000 worth of damage to blinds or signs on the exterior
oL 3,000 worth of lost or damaged goods during transit
oKey theft and lock replacement
oIncome loss
oPersonal injury, assault, loss of limbs or eyes, or death
oPersonal effects or cash carrying devices suffering damage
oLoss of the contents in a freezer
oIncrease for stock during busy periods
oproperty damage during exhibitions
ometered water loss
olandscaping

There are certainly more, but for now I am sure you get the idea.

Guest House Insurance – This form of insurance can be obtained by the owners of motels, hostels, hotels, guesthouses, and so on. With guest house insurance you will be covered in a multitude of other areas. Building and Contents coverage financially protects not only your business but also everything that is in that business (machinery, stock, money) from fire, storm damage, floods, and etc. Public liability insurance is also offered. With it you are protected from any claims that resulted from injuries that the public suffered while on your property. Liability insurance for employers is also included in guest house insurance. It works the same way as public liability insurance does, except that it protects you from negligence claims filed by employees rather than the public. Finally, business interruption helps to compensate you for any income loss that your business suffered in the aftermath of a fire, flood, blackout, gas leak, or etc.

Public House Insurance – This can also be known as pub and wine bar insurance. It is very important that owners of pubs or wine bars have this form of insurance. When you are dealing with a bunch of people who are all too willing to drink as much alcohol as possible, you can always expect the worse. Public house insurance is meant to help you do just that.

As you can see, whether it is public house insurance, guest house insurance, or retail insurance, it is always a good idea to invest in at least the minimum amount of coverage. Because when you are dealing with people on a daily basis, it is always better to be safe instead of sorry.

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Occupancy Cost

After obtaining information regarding the cost of tenant improvements, you should be able to estimate the cost of occupancy for your retail space. This will include rent, CAM charges, utilities and the amortized cost of tenant improvements.

CAM

CAM charges referred to comment area maintenance. Practice may vary from area to area, but in most areas this includes not only maintenance expenses but also the cost of taxes and insurance. Most leases for retail space include a partial or complete pass through for basic operating expenses, insurance, management, and property taxes. The landlord or leasing agent should be held to provide an estimate of these charges for your space.

Amortized TI

The amortized cost of your tenant improvements will be the cost over the term of your lease. To keep matters simple, if you are spending $60,000 to renovate your space, and your lease is for five years (60 months), include $1000 per month for the cost of tenant improvements.

Are You Paying Too Much?

Next research the occupancy cost compared to what others in your industry are spending. You may want to review occupancy cost on a dollars per square foot basis, percentage of sales basis and a dollars per month per location basis. If possible, determine what other similar businesses in your area are spending monthly for their total cost of occupancy.

Occupancy Cost Data Sources

Research the information available from industry associations and related publications for information on occupancy costs. It is sometimes referred to based upon dollars per square foot per year. It is more often referred to as a percentage of sales. If this is your first store, it will be difficult to estimate your sales. If you have other locations, you should be able to make an educated guess regarding the probable level of sales for this location.

Dollars per Month per Store?

In some cases, it may also make sense to review the cost of occupancy on a dollars per month basis. For example, if your existing stores tend to have a similar level of revenue, focus on locating retail spaces which meet minimal criteria and have the lowest monthly occupancy cost. Conversely, perhaps any store will have an excess amount of space for your real needs.

Rent per Month Example

For example, perhaps you operate a seasonal income tax business. During the peak of the season, there’ll only be two people in the store (you and your assistant). Based on previous experience, there are no locations which will provide the minimal amount of space you truly need. Further, since you are only leasing a modest amount of retail space for 4 months per year, landlords have not been particularly accommodating. Hence, a location which meets minimal criteria and has the lowest cost for the tax season may be your best option.

Criminal Activity?

Finally, research criminal activity in the area for the retail space you are considering. In many cases, it is apparent whether an area is likely on the low crime rate or high crime rate end of the spectrum. However, considering the investment of time and capital necessary to open a store, it would be very disappointing to learn your retail space was near a hotbed for criminal or gang activity shortly after opening.

Example

Consider the following example. A retail center in north Houston had been a prosperous shopping center on a major thoroughfare for 15 years. Shortly after hurricane Katrina devastated New Orleans, many evacuees from New Orleans settled in Houston. For whatever reason, a large number of New Orleans residents who were criminals located in the adjacent apartment complex. During the next 12 months, there were three murders on the retail center property. Occupancy fell from 80% to 30% because of the problems.

Crime Data Sources

Options for researching criminal activity within an area include online crime reports, discussions with tenants at the property, and discussions with police officers who are active in the area.

Online

In most cases, the information from the services will adequately address the issue of criminal activity near the retail space you’re considering. However, the most current and contextual data you’ll be able to obtain is from tenants at the property and local police officers.

Speak to Tenants

Tenants at the property where you’re considering leasing retail space can be a wonderful resource. They can provide information regarding crime in the area, tenants who have left the center, problems with traffic, problems with ingress and egress, problems with parking, and the trend in the center. Retailers within a retail center typically trade notes or visit with each other. Ask if business has been getting better, or is business declining for the businesses within the center?

Area and Property Criminal Reports

Area police officers are another excellent resource regarding criminal activity in the area. In most cities, you can obtain information regarding criminal records for any address. The records are public information. All you have to do is request the information and pay for the cost of copies.

Speak to the Source

In addition, in most cities the police are willing to visit with you if you are considering opening a business. Expect them to be very direct regarding criminal activity and trends in the area. It is possible they will discourage you from opening a store in a location you’re considering. However, is much better to not open a store in a poor location then to open the store and have to close the business.

The Market Research and Consulting division of OConnor & Associates provides information necessary to make decision to commercial real estate professionals. Occupancy and Rental Data, ownership and management information are routinely gathered for four major land uses multifamily, office, retail and industrial. This information allows investors to compare competitive properties, facilitate business decisions and track market and submarket performance.

Customer satisfaction is achieved through ensuring that the customer experience is entirely positive. Easy navigation and proper organization can benefit almost any retail storefront. That being said, when organizing your goods, especially smaller items, remember that candy jars are not just for candy stores. In fact, many retail businesses can benefit from their presence.

General stores, dollar stores, supermarkets, and department stores can all benefit from having a little something extra on the counter for customers to peruse while waiting in line. By putting small, inexpensive items, like individual pieces of candy or small children’s toys, in decorative containers, it will encourage a sale. This is a great way to increase revenue in stores with varying types of customers.

Hardware stores can make great use of these containers because they carry a lot of small items that need to remain separated and organized. Just by using jars like these, one type of each sort of hardware, whether it be nails, screws, bolts, et cetera, can be kept in each jar. They can then be placed side-by-side and labeled, making it easy for customers to navigate and find what they need quickly and easily.

Beauty supply stores also carry lots of small items, many of which are the same but come in many colors, like small eyeshadow compacts and nail polish bottles. By lining up a row of candy jars, it will be easy to keep the colors separated to show off the inventory to the customers. Customers always appreciate anything that keeps their shopping experience quick and easy, so this is an instance where jars will work out well.

Finally, of course, any establishment that sells candy or sweets can find plenty of uses for containers like these. They are great for holding individually wrapped treats, like foil-wrapped chocolates. They are also great for toppings like marshmallows and gummy bears in places such as ice cream parlors. It is both easy to see what is inside and easy to serve oneself with these containers.

Candy jars can give a business the boost of customer satisfaction it needs. There is nothing better as a shopper than being able to easily see what varieties of items are available without having to rummage through overstocked bins. In addition, they will give a tidy and well-maintained store, which shows that the management cares, creating an atmosphere that causes a customer to want to return.