These small businesses are surviving, despite competition from online sales
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Eighty percent survive the first year. Seventy percent are left after two years, 50 percent after five years, and only 30 percent are still around after 10 years. Those 30 percent are the small businesses in the United States that have had the right combination of capital, management, planning and cash flow to beat the odds and remain a long-term, contributing force in the American economy.
The U.S. Bureau of Labor Statistics, which tracks small business failure rates, has indicated that these small business survival percentages remain relatively constant year after year, regardless of what the overall economy is doing. So no matter what the year, you will have only about a one in three chance of long-term success if you open a small business in the United States.
What makes some small businesses successful while others in the same industry wither after only a few years? And has e-commerce dramatically changed the playing field and the resulting expectation of small business success?
We visited six unique, long-standing Springfield small businesses to find out how they’ve beaten the odds and have remained economically viable for decades. The formula seems simple, yet so elusive for many: Offer outstanding customer service, be tenacious, and love what you do.
It’s a labor of love, that’s the key to it,” said Ace Bike Shop owner Pete Meeker. “We are all cycle guys who work here; we love to ride. You’re not going to get rich working at or owning a bicycle shop. You just enjoy what you do.”
Meeker’s father founded the new and used bicycle sales and service business in 1957 and Pete, now 53 years old, started working there when he was 14. His entire life has been spent in and around the shop, so he knows what to expect each year.
“Owning a small business is tough, and with a seasonal business like ours, it’s even tougher,” Meeker said. “During the good months you have to put money away to get through the winter months. So the money you have is not real money. You’ve got to be frugal.”
Meeker sees a lot of multi-generational repeat business and said customer service has always been a top priority.
“People trust us. We’re not in it to get rich,” Meeker said. “We are a local, family business and we take pride in taking care of our customers.”
Internet bicycle sales are a concern for Ace Bike Shop, because with enough searching, people can probably find the same bicycle offered at Ace at a lower price, Meeker said. In fact, he’s spent hours with potential customers in the store, letting them examine and try out different bicycles, only to see them buy one online. The best defense, he said, is to sell customers on the local service they receive at Ace, including next-day repair service and to try and offer the widest possible variety in-store.
“We carry used bicycles for $40 up to new $3,000 ones, so when you walk in the door we want to try and have a bicycle here for you in your price range,” Meeker said. “We accept trade-ins, so if you have an old bicycle you want to trade in we can give you some money for it, so that helps to keep your cost down.”
Meeker isn’t ready to retire and he has no successor in mind when he does decide to leave, although an employee who has worked for him for 20 years may be the first person he considers when that time comes. In the meantime, Meeker will continue to ride, sell and repair bicycles, and he has some advice for anyone who wants to start a small business.
“Be very careful with the internet. It’s very tough to open a small business right now,” Meeker said. “Make sure you know your market.”
“Tenacity is a good quality to have,” said Douglas Mayol, who opened what is now known as the Cardologist Card and Sock Store in 1988. “Be willing to work for nothing. I say that jokingly, but you have to be willing to take the ups and downs, be willing to work for a heck of a lot less than a lot of people are willing to work for.”
Mayol said he found a niche when he opened the Cardologist 31 years ago and was busy with customers from the moment he unlocked the door. The crowds and profits ebb and flow these days, but there is one constant for him.
“I’ve always been driven by enjoying what I do more than how much money I make,” Mayol said.
Mayol said he’s had some local competitors through the years, but he’s outlasted them and ended up buying some of them out. Online sales are another matter. You can buy just about any greeting card or pair of socks on the internet, Mayol said, but his store offers an experience.
“To me, buying a greeting card, especially a humorous one, is like telling a joke. You’ve got the setup on the outside and the punch line on the inside,” Mayol said. ‘By the time you click and enlarge each step of that, it’s kind of like a joke that’s delivered with bad timing; it’s not as funny. I’ve got a better selection than a lot of online places anyway, in cards and socks.”
Mayol is also a believer in the shop local, buy local mantra and supports local causes because he wants to, not as a marketing strategy
“This is a business that pays local taxes and local rent, and when I am in the market, I employ local people,” Mayol said. “These are all things an online business does not do. We are part of the community, and I think that is important.”
Operating a small business is also an emotional investment.
“When customers walk into my store or anybody else’s store, it is a very personal interaction,” Mayol said. “They aren’t looking at some chain operation’s property, they are looking at my personal property. It’s like walking into my home, in many ways.”
“Hard work, doing a good job and not charging customers an arm and a leg,” said Dick’s Shoe Repair owner Mark Yeates about the keys to running a small business.
“With any small business, you have to put a lot of time in. You are running it yourself,” Yeates said. “I am backed up two weeks with work all of the time; I am busy all of the time.”
Yeates’ parents, Richard and Loretta Yeates, operated a shoe repair shop in downtown Springfield and moved into the current location in 1974 when they bought out Vern’s Shoe Repair. Mark ran the business for his parents starting in 1983 and bought it from them in 1992.
“Naturally, as a kid I was around all of this stuff and wanted to get as far away from it as I could,” Yeates said. “Then lo and behold, one day it’s mine.”
“Shoe repair is a dying industry, but there will always be a call for it,” Yeates said. “Unfortunately, the older guys that know this business are dying off and we have no young blood coming in whatsoever.”
That means more customers for fewer shoe repair shops.
“Word-of-mouth is generally all the advertising we ever do,” Yeates said. “I hardly ever do any advertising nowadays. In all honesty, I stay too busy already.”
Yeates does not participate in e-commerce, although he said that major shoe companies like Birkenstock accept online repair requests. However, the retailer always has the shoes sent to a local shoe repair business authorized by the company.
“I don’t really do any online business myself, primarily because that takes another person to handle that whole online, website kind of stuff,” Yeates said. “In this area I don’t know how well it would do, you’d have to invest a lot of time and money into it.”
“We think of our customers’ needs before we think of our needs, sometimes almost to a fault, even if it means losing money occasionally,” said Robert Fox, who with his wife owns Micropower Computer Systems. The computer sales and service portion of the business will celebrate its 40th anniversary this year, and the photography part of the operation will turn 50 this year.
“God’s good grace and taking care of your customers are the secrets to our success,” Fox said. “Our customer base for all of these years, it’s almost like these people are family. They know us and they trust us, and they come back.”
Fox said Micropower was the first computer store in Springfield. The business has been an Apple dealer since the first Apple model came out, and it’s sold and serviced PCs since day one as well. Micropower has also done programming, and an accounting package developed in the 1980s is still in use.
Fox said that Micropower was the central Illinois computer dealer for grades K-12 and higher education for many years until Apple terminated those dealer-based agreements to switch to direct school sales. That has placed his store in the odd position of competing for some business against the company that produces the computer equipment that Micropower sells, Fox added.
Micropower is a dealer for area state and local government, which means the business is used to the uncertainties of government budgets. There are also many businesses that offer the same merchandise online. But Micropower weathers these challenges by using the same formula that has meant success for four decades.
“We don’t think of it as competing, we think about how we want to run our business with our resources the best way we can for our customers,” Fox said. “We aren’t worried about what online is doing. And we keep good employees. My general manager has been here more than 25 years and the photography business manager about the same. They are almost like family.”
“The guys here know I will threaten them if they don’t treat our customers right. I don’t need to threaten them, but I do,” said Recycled Records co-owner Mark Kessler. “They know that you can’t mistreat customers. If all of the customers leave, they don’t get a paycheck.”
Mark Kessler and his brother, Gary, own the 39-year-old vintage music and eclectic retail store that is located in the same building where their family started Springfield Furniture Company in 1910. All kidding about threats aside, Kessler is proud of the customer service his longtime employees offer.
“If you have a problem with any random box store, you’re going to call an 800 number and it’s going to take you three days before you can talk to anybody who has the authority to do anything about it,” Kessler said. “I tell our customers, ‘If you have a problem, call me.’ Either I will answer the phone or one of my employees will, and you can talk to us and we’ll work this out.”
Recycled Records’ longevity is also due to the fact that visiting the downtown store is an experience that draws many customers from throughout the Midwest. It’s an experience that online shopping cannot offer.
“If you come down to buy a Rolling Stones album you might walk out with a neon beer sign. You can buy anything from a diamond ring to used furniture to stereo equipment,” Kessler said. “If it’s a used record, you can sit and play it on our listening station and hear what it sounds like before you take it home. I’m sure there’s some junk in the store somewhere, but as a general rule, our stuff is pretty high-quality and we guarantee everything you buy.”
Recycled Records entered the digital age with a Facebook page and it sells some items on eBay, but it remains at heart a customer-focused, experience-based store.
“If you get a reputation and you treat people correctly, they’ll come back to see you,” Kessler said. “If somebody needs a quarter for their meter, I hand them a quarter. I’m going to get that quarter back when they buy one thing in here.”
“I wanted this location because of the walk-by traffic between the hotels and the Presidential Museum,” said John McCormick, owner of the downtown Springfield Clock Shop. “I get a lot of walk-in business that way.”
McCormick has blended the storefront clock repair, retail and consignment shop with online sales of new clocks to keep his 25-year-old business going.
“You have to have a storefront for the clock repairs, and for Rhythm, Howard Miller, Seiko and other clock manufacturers, you have to have a brick-and-mortar location to be a dealer,” McCormick said. “There are always repairs. I have five employees who repair clocks, and right now I have a two-month backlog on clock repairs.”
But he wasn’t always that busy. McCormick said the first few years in business were difficult.
“It’s really hard, you just have to stay in business a long time and get word-of-mouth advertising going,” McCormick said. “You have to get a loan to buy products to sell.”
But once the word of a quality business gets out, McCormick said the customers keep coming back.
“We have quite a few loyal customers, especially those with key-wind clocks, who keep getting them repaired every eight to 10 years,” McCormick said. “They keep coming back, and they buy a new clock sometimes.”
Certain new clocks sell well online, and McCormick said those e-commerce sales are a big part of his business. But the repair service is what keeps people coming into his physical store.
“People usually don’t buy new ones; they just keep their old ones, keep getting them oiled and cleaned,” McCormick said. “They’ll last a100 years, and you just keep passing them down. A person is only going to buy one grandfather clock in their lifetime and then pass it down to somebody else.”
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