Are they running a small business that sucks?

Urban planners and downtown revitalization or regeneration types have done a great job of embracing the value and potential of places that we might be tempted to overlook.  The arcade-style retail space–a sort of anchorless mini-mall located in an office building or downtown corner– has been particularly hard to adapt, and hard for a lot of people to love.  Marcus Westbury in Newcastle, NSW Australia appears to be a welcome exception.  Here’s an excerpt from a piece he wrote hailing the potential of this space type:

Some of the very factors that once counted against them — the scale of their spaces, their relatively low foot-traffic (and hence low cost), and the fact that they require some effort to discover — are actually features, not bugs, in the brave new world where mass markets are shattering into hundreds of niches. Indeed among the fastest growing segments of business and creativity is small, home based, mixed online and offline businesses and arcades are logical places for these rapidly growing businesses to grow into….

For arcades to fire again they need to become eclectic, engaging, active destinational places. Activity will generate activity while decay begets decay. There are no lack of small businesses, online enterprises, hole-in-the-wall cafe or bar proprietors and others for whom the actual configuration of space is potentially tempting and it’s not that hard to find them….  For as long as half the shops sit, partially decaying, with the public facing spaces being left empty or used for storage owners need to realise that they are deterring not growing future value.

I don’t think this was quite his intention, but Marcus has also put his finger on a key issue that we face in the new world of economic development and physical  planning.  And it might not be the one you think.

We have had a tendency over the past 40 years of assuming that our places can only prosper if they fit standard formats.  We’ve built millions of acres of spaces designed to fit standard formats. And except in a few magical places, the market value of these properties has gone in the tank.  And yet we still see communities that don’t think they have arrived until they attain the full complement of chain retailers and restaurants.

We need to help our communities get over that.  We need to help them rediscover the value of the unique, the local, the thing-so-good- it’s-worth-finding.

I suspect we can all agree on that in principle.

 

But here’s the piece we miss, in both planning and economic development: it’s very hard to run a good small business.

It’s incredibly, stunningly easy to run a small business that sucks.

One of the side effects of the implosion of the real estate market globally is that the amount of really cheap space has skyrocketed.  If you have a business idea, and a little cash on hand, chances are you can find some property owner with a paid-off mortgage who will rent you that storefront for a song.  And as we idolize entrepreneurs, and as we keep telling people that going into business for yourself holds the promise of happy prosperity, more and more people will take them up on that offer.

Including a lot of people who have no damn business running a business.

I’ve written before about how small business owners often reminds me of movie cowboys: independent, self-sufficient, needing nothing from nobody.  And I’ve written about the fact that behind that facade, a lot of those entrepreneurs face each day overwhelmed, unable to muster from within just themselves the full range of skills and resources to run a successful business.

The good ones know that.  But many small business owners have no idea what they don’t know.

It’s easy for us to just write off business success or failure as the machine of the market doing its impartial work.  But like anything else, it’s not that simple.  Places like the arcades that Marcus describes, and many with more or less potential, can get a reputation as a lousy business place pretty quickly, even when we can see great potential.  It only takes a couple of wanna-be entrepreneurs getting a sweetheart deal from a desperate or disinterested property owner, and then crashing in flames when they botch their hiring or their inventory or their marketing, for that “bad spot” reputation to develop.  And for independent businesses, more likely to rely on experience and gut check than the data that the franchises devour, a location’s reputation becomes a very solid reality.

Here’s where you come in.  If you’re not linking your small business owners to detailed, hands-on training and coaching, you’re shooting your community in the foot.  If you’re not inducing or requiring your incentive recipients to go through intensive business training, you’re wasting too much of your limited funding.

And here’s the most important point: you need to have some process, some system, that will help some of your potential small business owners learn the most valuable thing they may ever learn:

That opening that business would be a bad idea.

Sometimes the best thing you can do to help manage your community’s ecosystem is to keep the unhealthy ones from getting planted in the first place.

patch of weeds
Looks familiar… missouribotanicalgarden.org

 

3 thoughts on “Are they running a small business that sucks?”

  1. It’s pretty hard sometimes to get these small time entrepreneurs trained but I did find more fertile ground approaching property owners of these smaller funky spaces. They need a lot of assistance in the area of leasing. By that, I don’t mean bring them someone to fill the spot. I mean, getting an appropriate lease, that spells out proper signage, and that the tenant cannot block or cover the street facing windows, or doesn’t allow exterior security gates if that is your pet peeve. There are all sorts of things they are willing to learn. Teaching them about what things work well together and what doesn’t such as a bridal shop next to a mental health clinic. Seems like common sense but that’s one I had to deal with. Property owners that have only a few properties are the ones that seem to lease to the worst operators. They are happy to just get a live body. The lease rates trend downward if there are a lot of them the district sees a decline in value. I had more success getting after the property owners and teaching them about leasing and having a leasing plan for the building and not just whatever walks through the door, than I did with business people getting trained. If the property owners get savvy and don’t panic, their tenants will learn too. I love you Della. You really are the bomb!

    1. Man, that is great insight. That’s exactly the kind of basic basic stuff — lease agreement conditions, what kinds of tenants fit together … a live body isn’t exactly setting your standards high enough…. So well said.

      And I should mention that I have never been called “the bomb” before. *blush*

      Course, my 14 year old is currently laughing his head off…

      Thanks, Judi!

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