Are You a Captain or a Biz Owner? The Perfect Storm (by Green Ink Diary Blog)

Posted on September 17, 2009. Filed under: Other | Tags: , , , , |

This article was written by the author of the Green Ink Diary blog and is reposted here with his permission.  You can visit the Green Ink Diary Blog by clicking HERE and also, be sure to follow him on Twitter HERE



Green Ink IN.
“That’s the game, they knew the risks”.

I work in the antiques/vintage trade. I have a Bricks & Mortar (B&M) store. I sell online on ebay, sometimes bonanzle, on our own ning sales group, and by phone, email, and sometimes markets.

Well, just about anywhere I can hawk my wares, sounds about right.

I got to thinking the other day about this “business”, especially the online variant.  And it led me to think about the movie “the Perfect Storm”.

The perfect storm was a confluence of a couple of hurricanes, combined with a pressure front, all meeting in this little spot in the Atlantic, with the Andrea Gail right in the middle.

If you haven’t read the book, or movie, you should, it’s a touching and powerful account.

One point of that tale as my jumping off point.

The owner of the boat is safe in harbor and must relate to the relatives the sad news that they cannot contact the Andrea Gail. He is attacked by one of the relatives, but many of the attendees stand up for him.
His statement (from memory, not a quote) “That’s the game, they knew the risks”.

You have to see the scene to understand how deep this goes, for all concerned. It is a statement filled with sorrow, fact, and empathy.

And at the end of the movie, well, the captain goes down with the ship.

Being a captain can sometimes suck.

so. back to business, keeping that image in mind.

As noted earlier, I run a business with a physical and online presence. I am an owner, safe at harbor regardless of the storms. If the storm is local, well I can sell online. If the storm is “over there”, I’m lucky I have more than one ship out there fishing (multiple venues). If the storms don’t abate for years ” out there” that’s okay too, I can always grow salad and rabbits on land.

You can see where I’m heading, right?

I have narrowed down MY perception of a business over the years. It comes down to this.

If you can answer “YES” to this next question, you own a business. If you can’t you’re just a captain.

If you needed to, could you sell your business tomorrow?
Yes, or NO? think hard on that one.

For example: in Toronto, recently, a couple had an antiques store on Avenue Road. A trendy upscale area of town. They encountered medical issues and had to sel the business. The business is on a leased premise. they had been in business for about 5 years. Website, radio shows, even some mentions in newspapers. From the outside looked GOOD.

They were unsuccessful, I believe, and the premises were eventually vacated. Shortly after a consignment store, also dealing in vintage/antiques set up there. Sad but true.

Very few antiques businesses can actually be SOLD. They are highly dependent on the personell, specifically the owners. It’s not your regular five and dime, wholesale supply is tough to find, and it’s a capital intensive business.

If you sell solely online, how would you answer that question?

In our case, we have land, buildings, stock, goodwill, location to sell. Those are regular business with a very well known market value. the business part of it can be quantified in terms of gross annual sales, or net. (gross sales a better indicator, net is variable on many factors)

BUT, we also have our online presence to sell. By itself it might not be worth much, or is it?

Let me play out two scenarios.
scenario 1. a B&M store WITH online presence/sales
scenario 2. An online store ONLY.

scenario 1.
With our B&M operation we utilize our online venues for advertising, word of mouth promotion, as a contact point, and for direct sales. We OWN (own servers too), as well as . We also sell on ebay and on our newer Shop-Ning. We own the Shop-NING, but do not have full control (hosted). We utilize our websites to cut down on advertising spending. WE KNOW we save upwards of $10,000 /year using the websites. (our previous budgets before cutting ALL print ads and going to web exclusively, we don’t even use yellow pages 🙂

On eBay, we own nothing, they have control, we just ‘captain’ our way through their waters.

On our Shop-Ning we have full control of the site, but the rules of the hosting parties can change, their software can change, features may come and go. In a sense we are more ‘captain’ then owner, more like a guest owner (well invited and appreciated, but can be asked to leave anytime).

Would we devote large amounts of time to building our eBay business? NO.

Would we dovote large amounts of time to building our Shop-Ning? YES, but mostly because it is about converstions, it connects us directly with our customers in a way not possible with other systems. We could build one ourselves, on our servers, and that would be the way to go. But that is costly up front. to duplicate a NING style network is not a simple task, and some synergies of related ning networks would be lost. No, we’ll satisfy ourselve with just being good captains for now.

The reasons for the above answers are simple: If we were to sell tomorrow, would that feature or item be saleable? We are not large enough on ebay to consider it saleable. Our shop-Ning, because it depends on another parties’ graces is not saleable (although the customer contact list is, as in any business). Breaking news: “Wired Journalists – A Publish2 network” exciting news, NING group purchased by Publish2 – sign of more to come?

Using that simple guideline question really sifts down what you have actually built over time, doesn’t it?

let’s go back a bit.
So we have land, buildings, to sell.
We have some goodwill to sell (but that only tied in with sales figures).
We have an “advertising venue” to sell (our websites, a substitute to traditional advertising) .
We have inventory stock to sell. (NOTE also a way to sell it, the biz)
we have the business as a whole to sell, includes all of the above, or parts.

All in all, at least something. Like I said before selling an antiques business can be daunting, but not impossible. Few antiques stores are bought/sold, but some antiques malls are.

Now on to scenario 2.

OnLINE sales only.
If you own your own servers and websites, you have something to sell.
If you sell from a sales venue, like ebay, bonanzle, or ruby lane, for example, you don’t have much. Some value could be given to an established online store on a venue, but a buyer would be hard pressed to place a high value on it (given that it is “hosted” and hosts are know to disappear or change rules often).

If you are an ebay powerseller, for example, you might have built up enough business to actully look lucrative and enticing to a buyer. But any buyer would put a huge negative number in the calculations simply because it is eBay, an unknown quantity.
If anyone knows of ebay business bought and sold in the past two years, I’d love to hear about that.

You can sell a website if you can convince the buyer that the plug can’t be pulled on it easily. With ebay, bonanzle, etsy, you would have a tough time convincing the buyer.

———– so now the perfect storm hits.

This is what any business looks for, a business which can withstand the perfect storm, that confluence of search ratings, stable hosting, built relationships and $$Sales which can withstand major shifts in the surrounding internet landscape.

If you are in business what will you have left when the storm hits? Look carefully at where you stand, and where your efforts are taking you, especially with your online efforts. These efforts are less tangible and much more prone to suffer (or gain) at the hands of OTHERS’ actions, sometimes even more dependent on them then your own efforts.

Look for, and build, solid foundations first. That might even mean sticking with “outdated” technologies if they are still working. Chasing after shiny new balls can lead to a leaky boat – not something to weather a storm with.

Some web developers have made comments to me in the past about how “dated” our website at looks. Offers to update the site abound, and my answer is always the same.
Please update it, run it for 3 months and show me the money. If it works, here’s the cheque.
No takers to date.

Our OLD style html based website has weathered the storm for over 6 years now, and still holds water, thanks. And, no, it is not for sale………. yet.

So which will you be, the captain or the owner?

Like the man said:
“That’s the game, they knew the risks”.

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