Monday
24Aug2009
Today "Bricks and Mortar" Can Seem Like "Sticks and Stones"
Monday, August 24, 2009 at 05:04PM
Last week my dear friend Lucy came for a visit. We hadn’t seen each other for quite a while. She was ready to spend some time with us in the mountains of Northern New Mexico, and have a reprieve from the sweltering heat of her family’s Texas ranch. Our weather was glorious and we had a wonderful time together! We began her visit with Filet Mignons on the grill, Texas-sized baked potatoes, great wine, fresh tomatoes and basil from our garden (served with fresh mozzarella, all drizzled with olive oil & fig balsamic vinegar); and lots of old stories and laughter.
Over the week-end we went to Santa Fe to play tourist. As we walked around the plaza, I noticed an unusual and disturbing sight. A favorite corner store was empty and had a huge “For Lease” sign in a window that is usually filled with beautifully colorful displays of art and Native American jewelry. It was a jarring sight.
As we walked down the street, I became even more saddened. We stopped in front of the store where, years ago, we had purchased my favorite gold ring with inlays of spider turquoise, coral, lapis, and opal. The sign in the window announced a “50% Off Sale” because they are “going out of business.” Ugh! Oh, I was upset. We went in the store and talked with the owner. He smiled, looked at my ring and said, “You have taken very good care of it; it’s still beautiful.” After thanking him I asked what is going on. He said their lease is almost up. Business has been so slow for so long, and they just can’t continue to pay the $26,000 a month rent on the space. I was aghast. While I never knew the amount of their rent, I was aware that it is a prime location – right there on the plaza. But $26,000 a month?!?! Holy smokes. That’s $312,000/yr. For RENT!
He too was saddened and explained that the building owner would not negotiate. We expressed our sense of loss, as well as our gratitude for the years they had been there and for the beautiful items we’d acquired from them.
I now understand and look at this loss of a favorite store in an entirely new way. We have recently become involved in online marketing. We have learned about the “Old Business Model” which is basically the traditional “bricks and mortar” form of retail business. As opposed to being able to harness the power of the Internet, and utilizing the New Internet Business Model - where there is no rent, no insurance, no paying employees who aren’t always commited to your success. The start-up costs for the New Internet Business Model are minimal compared to a “bricks and mortar” business or a franchise of the Old Business Model.
Research shows that for the Old Business Model one needs to invest between $250,000 - $2,500,000 and it usually takes five years to realize a profit. It’s common to have 15% profit or less; have teenage employees; daily inventory; expensive rent; insurance; less freedom, etc.
With the New Internet Business Model, the upfront investment is typically $2,500 - $25,000 and many online entrepreneurs are making a profit within days or weeks; typically the ROI is much higher; there is no rent; no insurance; no employees; no inventory; and much more freedom.
I guess that’s why, after I saw that “Going Out of Business” sign in the shiny window and we spoke with the owner, I started thinking about the childhood nursery rhyme, “Sticks and stones can break my bones, but words will never hurt me.” Being tied to a “Bricks and mortar” business these days can be a very painful experience; and that old way of doing business is breaking the “financial back” of many traditional business owners. We considered the two options, and a home-based online business is definitely the way to go for us. To learn more about the new Internet Business Model visit: www.HomebasedEntrepreneurOnline.com Linda Compton
Over the week-end we went to Santa Fe to play tourist. As we walked around the plaza, I noticed an unusual and disturbing sight. A favorite corner store was empty and had a huge “For Lease” sign in a window that is usually filled with beautifully colorful displays of art and Native American jewelry. It was a jarring sight.
As we walked down the street, I became even more saddened. We stopped in front of the store where, years ago, we had purchased my favorite gold ring with inlays of spider turquoise, coral, lapis, and opal. The sign in the window announced a “50% Off Sale” because they are “going out of business.” Ugh! Oh, I was upset. We went in the store and talked with the owner. He smiled, looked at my ring and said, “You have taken very good care of it; it’s still beautiful.” After thanking him I asked what is going on. He said their lease is almost up. Business has been so slow for so long, and they just can’t continue to pay the $26,000 a month rent on the space. I was aghast. While I never knew the amount of their rent, I was aware that it is a prime location – right there on the plaza. But $26,000 a month?!?! Holy smokes. That’s $312,000/yr. For RENT!
He too was saddened and explained that the building owner would not negotiate. We expressed our sense of loss, as well as our gratitude for the years they had been there and for the beautiful items we’d acquired from them.
I now understand and look at this loss of a favorite store in an entirely new way. We have recently become involved in online marketing. We have learned about the “Old Business Model” which is basically the traditional “bricks and mortar” form of retail business. As opposed to being able to harness the power of the Internet, and utilizing the New Internet Business Model - where there is no rent, no insurance, no paying employees who aren’t always commited to your success. The start-up costs for the New Internet Business Model are minimal compared to a “bricks and mortar” business or a franchise of the Old Business Model.
Research shows that for the Old Business Model one needs to invest between $250,000 - $2,500,000 and it usually takes five years to realize a profit. It’s common to have 15% profit or less; have teenage employees; daily inventory; expensive rent; insurance; less freedom, etc.
With the New Internet Business Model, the upfront investment is typically $2,500 - $25,000 and many online entrepreneurs are making a profit within days or weeks; typically the ROI is much higher; there is no rent; no insurance; no employees; no inventory; and much more freedom.
I guess that’s why, after I saw that “Going Out of Business” sign in the shiny window and we spoke with the owner, I started thinking about the childhood nursery rhyme, “Sticks and stones can break my bones, but words will never hurt me.” Being tied to a “Bricks and mortar” business these days can be a very painful experience; and that old way of doing business is breaking the “financial back” of many traditional business owners. We considered the two options, and a home-based online business is definitely the way to go for us. To learn more about the new Internet Business Model visit: www.HomebasedEntrepreneurOnline.com Linda Compton
Reader Comments (1)
Great Article! Change is hard, but the consequences of not changing are harder. All the best-