SurfShop Owners

Man, we’re like stereo here… you wouldn’t be my long lost brother or something? Lets see- COD and second day air are a beautiful thing. Have a check for the UPS guy, ready and waiting in the cash drawer under the 20s. That way your money isn’t tied up and unrecoverable without major hassles when the stuff takes longer and longer and longer to get there. It also lets you sell what sells and restock what sells. Beware of minimum orders. Or the ‘standard assortment’ in sandals especially. Like the man says, do not offend the parental units. Remember the Christian Fletcher line of druggie t-shirts and such? They never sold squat, 'cos Mom wasn’t gonna pay for it. Put it another way - you’re a teacher. What is it that your principal won’t let kids wear to school? Bada bing, bada boom, you got it exactly. Don’t carry it. More on parents and grown ups - Willie Sutton was asked why he robbed banks. His answer was ‘That’s where the money was’. Kids don’t have money. The boring guy who’s 35, doesn’t say much and isn’t a super flashy surfer? Right, the guy who surfs a 7’10" fun shape. He’ll drop $500 on you for boards and suits and do it every year. And tell his friends, and he has lots who are just like him. Carry some things in depth, even if it means there are entire product areas you don’t have at all. I mean, have lots of colors in all the sizes and if that means you don’t carry, oh, board bags or skimboards, so be it. Customers will seek you out 'cos you carry the good stuff and have it there. Of course, it has to be a good product. There are people in this business who will spend themselves broke just to cut you off at the knees. I know of a boardmaker who just got into the clothes last year and a shop locally went to 'em at a trade show and offered to take a big clothes order if they could have the board line…which was conveniently carried by the shop across the street. Years of loyalty, lots of promo work, hosting the guy who owned the company and his buddies every year on their East Coast tour - that meant nothing, they sold out to the guy for one stinking clothes order. That’s the biz, expect it. Don’t ever burn any bridges. You may need 'em someday. doc…

there was once a really good shop in my town. guy ended up getting screwed. i remember going there when the media skate team came for a demo. kids were robbin shit everywhere. ended up calling the cops when he was missing like 25 decks, a surfboard, and a couple shoes. but that wasn’t what sent him bankrupt. somehow the wharehouse next to him was some chemical thing, for packaging or soemthing, ended up lighten 4 different places on fire, when some piro lit it on fire. guys buisness was ruined. i saw him recently at the beach. all he has now is 4 surfboards.(really nice), a vw van, a bunch of clothes, and his dog ralphy! (ralphy loves the beach) anyways i felt bad for him, so we went down to a pizza place, (he remembered me always coming in since i was little and buying decks, wax, pads,my second surfboard). so anyways while eating i asked him how he’s getting along and such…now about 50 years old, he said to me that he is happier than ever. living a dream noone else can. i see his van every now and then what a cool guy!

WOW. This is probably the finest example of Business 101 – The Retail Side – that I have seen in quite some time. Doc and Greg have just given everyone in a few eloquent paragraphs the equivalent of a decade of insight on what it takes to run ANY type of business. Replace ‘Surf Shop’ with ‘Shoe Store’, ‘Hobby shop’, ‘Hardware Store’ etc… The song remains the same. People are people and that is constant. The secret to staying in business over the critical 5 year mark has been well explained in this thread. Quite frankly, I am so impressed by it that I am going to slam it into a word doc for future use. Find a niche. The thirty-something plus crowd has a great deal of disposable income. Women are taking to the water in droves. Good customer service has no pretension and everyone (even the Forty-something Mom) feels important, comfortable, and appreciated. Nice job guys, Magoo P.S. I work for a multi-national and I am in the business of helping large concerns enable global commerce. I also surf a minimum of three times a week, skate my backyard ½ pipe every chance I get, and attempt to make surfboards come out like Herb or Jim the Genius on a regular basis (by the way still unsuccessful at that level of quality – those guys are gifted…) I also have three grommets that surf, skate, ski – but most importantly – wear the clothes. M

“the equivalent of a decade of insight on what it takes to run ANY type of business.”…well, maybe. Though it’s kinda sad that it took me three decades to learn what little I know. Though it does explain why I’m still in the biz, that and the perverse fact that hey, I like fish sticks. Don’t think too much of what I’ve written - Atom Tan has put a lot of it much better. It’s real easy to kick back at the shop one night a week with a couple of beers after work with a few friends. But one night becomes two very easily, and that first beer may start to come an hour before closing… watch it. And always, always remember the several applications of the old cliche’ - “It’s business, not personal”. You didn’t make the sale? Well, it may not be because somebody didn’t like you. Business, not personal. The shop across town does something mean spirited, like telling everybody you’re not gonna open this year? They maybe don’t understand the difference between business and personal and it’ll get them in the end. Don’t you make it personal or it may get you too. You really liked your new t-shirt design or board design or…, but it’s not selling. Never confuse your tastes with what sells. Business, not personal. You’re in business to make money. If you want personal gratification, paint pictures or write obscure poetry or something. When you screw up, learn from it, don’t go into a black mood of depression. It happens to everybody, so move on and improve. When you do that, it’s business. When you make the same mistake repreatedly and refuse to change - then you have a personal problem and you need to fix it. Don’t get your ego tied up in your work. Read Anthony Bourdoin’s Kitchen Confidential - the Restaurant Owner Syndrome chapter. Great primer on what not to do. anyhow… when you have an idea, listen to those who say it’s a bad idea. They might be right. They might be wrong, but not listening and thinking about it is foolish. doc…

I will bet Doc will agree, but I think the most important thing you can do before you start is plan your exit strategy. Chances are you will be like most other business and end up possibly through no fault of your own going out of business. If you don’t plan for that possibility and how you are going to exit it could cost you alot. Like Robert J Ringer said in his book "looking out for number 1. Have a positve attitude through the assumption of a negative result. Never get so far in debt that you cannot close without it costing you your shirt, shoes, and worse. Give your shop a certain period of time before you consider closing. Your third year will probably tell the tale. The worst thing that can happen is that your shop does not take off and does not fall flat on it’s face, but simply exist barely making it and costing you time and stress. If the growth is not steady upward after 3 years; take a second closer look at your position. Find a good business broker before you open and sell your shop before you close it. There are alot of people just like yourself who want to get into the surf business and who will pay for a turnkey. Keep that in the back of your plan by planning it at the begining. Doc, Your words of wisdom are music. It’s great to see there are still some good shop owners out there. Our industry has a magnetic thing to it even with all the bull. IF surfing was not so blasted addictive we would be able to cure our disease.

Yes, I do agree completely. Bad song has the lyrics 'Know when to hold 'em, know whern to fold ‘em’. When is it good money after bad? When do you decide you’re neck deep in the money pit? In fact, find a good business broker just so you can both see what’s out there and get a better idea of costs and such than my wild-ass predictions below. Now, I am gonna assume a seasonal business, in Coastal Massachusetts - yankeeland by the sea, and throw in some earthshakingly rough figures. We’re gonna take serious advantages of what Me has as options. It’s a shoestring operation. One guy, no employees and especially no partners. Figure startup costs of about $20K, split pretty evenly between merchandise and seasonal rent/overhead. Zero salary or pay, 'cos that’s there from the real job of teaching. At least half of the overhead is rent, plus things like a cash register ( an older restaurant register is good, it has lots of different codes so you can track what’s selling and so on ) and a very minimal bit of decor. Bookkeeper fees, license fees, et cetera, et cetera, all the way down to the stapler and staples - and you’ll be amazed at how much you spend on little things like that. No computer cash register system, no scanning cash register. Buy used, at auctions where somebody else’s dream biz has gone down the tubes, ok? Oh, and while you’re at the auctions, keep yer eyes open for a nice restaurant stove, willya? I’m looking to upgrade. Typically, a next to new restaurant stove in good shape that sold for $1500 new goes for $2-300 at auction. Keep that ratio in mind. You may be praying it’ll be that good. Leave a couple of grand as an ‘oh dear’ contingency fund. That’s not much, but it’s adequate. You get a bigger cash flow emergency than that, close the doors and walk away. Negotiate hard with the people who do your credit card stuff too - that’s percentages of gross, ya know? Now, Me’s big advantage #2 is that as a town employee and as a teacher he just may have access to the employee’s or teacher’s credit union. $20K is a lot of dough to have saved up and impossible for any surfer I ever heard of who wasn’t making a quarter mil a year. The credit union will usually loan money on very favorable terms, not many questions asked, 'cos they got a clear line to where the guy is and where he works, y’know? And their interest and terms and such is a lot lower than manufacturer’s credit line and interest. Oh, and your chances of getting a small business loan at favorable rates for a surf shop with no track record? Nil. Zip. Zero. If you can get something like that, bag the surf shop and go into the grant-writing business. It pays very well. If at all possible, have the loan to your corporate self, not you personally. The reasons for this are pretty straightforward. So, stock the shop as a one man operation. Open weekends in May, bumble through until school’s out, then go to it full time until school starts up again, then weekends until say, November unless some other considerations come along but do be available by phone/answering machine for orders/meets. Oh, and no petty cash out for lunch and van gas and such, all of that sort of thing is coming out of your personal pocket. Deduct it on yer taxes. Employee business expense, un-reimbursed. Milestone #1 is at the end of the first season - did you at least make enough profit to make the loan payments? Good. Break even? Bloody amazing. Wife/kids/dog haven’t left you? Good. Make enough to restock and pay next season’s overhead? That is, did you gross enough and do you have enough cash stashed to reopen next year without going back to the well for another loan. If you didn’t, get out now. Oh, and though you may be tempted to go to the trade shows, don’t. Ever. Total waste of your time and money. If you don’t already know what’ll sell for ya long term and steadily, you’re in the wrong business. Year two - some of the setup costs won’t be there - plow that into more merchandise, targeting what went best last year. Build in more depth in those lines that did well, consider new product areas but be Real Cynical about it. Those lines and product areas that didn’t do well…well, welcome to the Me’s Surf Shop Discount Rack - dump them at cost if ya have to so you at least break even on 'em and plow what you get into the stuff that sells. Reorder what sells out, via COD and UPS Select air - that’s so ya don’t tie up a lot of dough in inventory and can stay flexible. The costs are a little higher, but the advantages are tremendous. The good news is you’ll be getting faintly better deals from your vendors, and your carry over stock from the year before is still sellable. If it isn’t, You Screwed Up. Year two milestones- you should be showing a profit. At least enough for a fancy year-end dinner and a good bottle of wine. Still no pay/salary, but if you’re not ahead of the payments on the loan, next year’s overhead and maybe a 25%-50% increase in your inventory budget, get out. But at least now you can sell it as some sort of going proposition and recover a little of what’s gone into overhead over the last couple of years. You hope. Year three. The same general merchandising plan as before- sell what sells, get out of what doesn’t, expand if it’s very very probable that you’ll sell the bejezus out of that particular line. Year three milestones - you should be making enough profit to pay yourself minimum wage for those hours the shop is open, after next year’s overhead, inventory restock, loan payments and all. Don’t worry about perks and benefits ( got them from teaching anyhow) , but pay yourself as an hourly employee. As a good public school teacher, you’re watching your retirement like a hawk and this’ll do nice things for that re social security and such. As a corporation, you can do that, and if you were not incorporated from day -30 from when you opened, you are dead meat. Now, you have spent three years at it, made chump change for one. You could have made far better money waiting tables or for that matter flipping burgers. Decision time A: do you want to stay with it for personal reasons? In spite of the hours, in spite of the hassles and obnoxious customers, did you have fun? Decision time B: the financial end of it. What kind of growth have you been seeing? Especially in your most profitable lines. Punch it into a spreadsheet; if the growth graph ain’t still pretty vertical overall ( especially in your most profitable lines ) then you’re unlikely to grow it enough to make it worth your while financially, compared to waiting tables or flipping burgers. But you’re making enough to sell the biz and break even on your loan and on your remaining inventory and you can walk away owing nothing. Chalk one up to experience and move on to something else, as you still have a good real job and a life. If you’re not ahead of the game on both of these decision criteria, get outta there. After that, if you’re having fun and making money, then go with it but do that summing up at the end of every year. You might consider an employee ( singular) and plan on a nice year-end profit-sharing bonus to them at the end of the season…this is what we call incentive. And if it starts to get old, sell out. Anyhow- that’s how I’d do it. Don’t forget to be totally legit with your books and especially the sales tax stuff, lest the Division of Corporations come down on you like a ton of bricks. hope that’s of use. And Atom Tan, if you’re ever out in New England, swing by, I’ll show you a real shoestring operation. And the first sixpack is on me… doc…

Doc…Atom Tan.That was brilliant,it could be a treatise for any small business.I printed the thread and am listing copies on ebay as we speak.Yeehah!(just kidding boys). R. Brucker

Ditto…I printed it out and am giving it to a friend who just opened a small shop with a single large competitor. Thanks guys, Rob Olliges

De nada, guys. Thing is, I find I do something like this every year or two - check google/alt.surfing for something like this I did a couple years ago concerning surf shops and the biz in general. I really oughtta save this myself. Save myself a lot of typing in another year or two And the real hero here is Atom Tan - what little I came up with is 'cos he mentioned it and I expanded on that, often verbosely. And as he said - and no way I can put it better; "Our industry has a magnetic thing to it even with all the bull. IF surfing was not so blasted addictive we would be able to cure our disease. "… At its best, say getting a good kid started surfing or turning a kid headed for trouble hard left towards the ocean…yep, it’s worth it. Makes up for all those tattooed idiots spouting guff that monopolise too much of my time at the shop. best regards doc…

Ahoy, recently a friend of mine wanted a new pair of Birdwells. He went to a local shop, and the girl behind the counter didn’t know what Birdwells were. They looked around and couldn’t find any. “Sorry…I guess we don’t sell them.” My friend went down the street and found a shop that only carried Birdwells in the gang banger length. Finally at a third shop, a longboarder shop, he found some Birdwells that would suit an old fart. He would have been better off ordering them online. Maybe even get the 3 fer $45 specials. Another thought…there’s a surf shop near me with a viewing rack where you can eyeball the stock boards. A useful selling tool I suppose. And there’s another shop nearby with no viewing rack, but they do have a nicely varnished wood bench inside where you can sit down and talk. I take my business to the shop with the bench. In the old days there was a surf shop here that stored your boards so you didn’t have to lug the 40 pounders from your house. Boards are lighter now, but perhaps the parents of Mr. Me’s rich kids would pay a good price for storage and the luxury of not having to stuff a wet sandy board into the new Mini Cooper. Have a storage surf shop where people aren’t allowed beyond the lobby. Get e-mail approval of ding repairs from the parents before you proceed. Sell some basics like wax, mags and trunks. Take custom board orders for your own brand. Encourage people to buy certain things online. You’ll have low overhead and minimal theft. A one person operation where you can fill in the gaps shaping boards or reading Swaylock’s on the computer while the groms strut their stuff in the vending machine lobby. And for sure…give them a damn bench.

Funny you should mention Birdwells- they’re the only brand I carry. Though they have so many styles and colors and prints that we can’t carry everything in every size, so we’ve got the regular plain old original style 301s mostly, some 303s and lots of 307s - don’t ask how all those 307s got there . Pick a color and style you like- they last and last and last. The $20 Bargain Birdies and the 3 fer $45 - go for 'em, that’s less than I pay wholesale. A buddy of mine half a county over swears by that particular deal. Nice folks to deal with too. hope that’s of use doc… http://www.birdwellbeachbritches.com/index.htm