Crunch Time

Up until recently it didn’t take much effort to run a moderately successful skateboard shop.

The economical climate of the late 90s bred a booming skateboard industry that experienced incredible growth. Well, times sure have changed, and the present economical cycle will quickly indicate which shops are in it for the long haul versus those that are in it for a quick buck. To run and manage a prosperous skateboard shop during these tough times, you as a retailer will need to do things better than you did in the past. It’s very easy for a booming industry to ignore things that can lead to a slow and painful death during an industry downturn. However, making strategic changes in the way you do business now will not only help you to weather the bad times, but it’ll also position your business to capitalize on the opportunities that will lie ahead when good times come back around. Here are a few basic things you can do to allow your business to endure and eventually prosper during the worst and best of times:

• If sales are on a downward trend in your store, you must be willing to face the brutal facts. Reevaluate your business and be willing to make some tough choices that will allow your business to operate under your current sales conditions. If your business isn’t the same as it was six months ago, don’t continue to operate it as such.

One of the first areas to focus on will be your operating expenses. Finding ways to lower your “fixed overhead” will make a monthly impact to your bottom line and allow you to operate even with a lower sales volume. Negotiating a lower lease or rent may not be realistic, but reducing your electric bill by turning off computers and lights when they are not needed can start to make a difference. Obviously, saving a few dollars per month in electricity will not be enough to compensate for a considerable drop in sales, but once you adopt a “save electricity” mentality you can easily apply it to all other aspects of your business.

• Reducing payroll can be a touchy and difficult decision but is often a fact that must be faced. Reexamine your employee schedule first by looking at areas where you have more than one employee working at a time. In the past, you may have very well needed two or more salespeople on the floor to handle your customers’ needs, but is that still the case now that you may have fewer and/or less-frequent consumers?

Scott Oreschnick, owner of Cal Surf in Minneapolis, Minnesota, is quick to point out that you need to have your best employees in the shop at the premium times. Oreschnick says, “Your best employees are capable of handling many tasks and tend to focus more on customer service. You want to allow them the opportunity to do what they do best by having them work during your busiest times.”

• Make sure to be selective when you begin cutting employee hours. Your best and highest-paid staff should get the most hours during your busiest times while weaker employees may have to move to part-time or even be laid off. While this can be an extremely tough thing to do, keep in mind that it’s better to have a few solid full-time employees than several part-time ones. Showing this commitment to your premium employees will increase their work performance and protect one of your shop’s best assets-its staff. During a slowdown in business, it’s imperative for shops to retain their regular customers. They are the backbone of your store’s sales, and their continued support will be needed to get through any uncertain times. It also says a lot to your customers when you have your highest-paid employees there to service them instead of a low-wage employee with less experience.

• Sometimes just keeping the customers you have won’t be enough to get you through hard times. Employees at the Skateboard House, located in Jacksonville, Florida, focus on finding new customers by creating new skateboarders. Co-Owner Chip Southworth says the skatepark and the shop work hand in hand. “The skatepark gives us the chance to create new skaters. We started an all-girls skate night that has grown to almost 40 skaters. These are now new customers that the shop never had before.” It’s great to have a skatepark that draws skateboarders to your shop, but even Southworth admits that it’s only part of the puzzle: “I think that having the best selection possible is also very key to keeping new customers off the Internet sites and coming into our shop.”

• It’s very important to keep reaching out to customers when things slow down. Dust off your mailing list and try to reconnect with customers you may have lost touch with over the last few years. Look for ingenious ways that might get them back in the store with a reason to buy. Peter Karvonen, owner of Faith Skate Supply in Birmingham, Alabama, gives his customers a call to action by offering great deals on product that he buys on sale. Karvonen says, “We keep an eye out for good deals on closeout items, and we pass those savings on to our customers. This brings them into the store, and chances are they’ll buy something that goes with it.” Karvonen uses his store’s Web site to inform customers of these hot deals and makes a point to especially update it when the news predicts foul weather. “When the weather is bad, kids are often stuck at home checking out the Internet. It’s a great time to update them on new product that has just come in and the stuff that we have on sale.”

• Watching your inventory and how quickly it turns is another area that will need special attention when you’re experiencing a drop-off in business. If you’re not careful, inventory that doesn’t move quickly and consistently will disrupt your cash flow when you may need it most. This doesn’t necessarily mean that you need to buy less product-just stick to the brands that do well in your shop. Stocking up on some extra griptape when it’s on sale is low-risk, but going deep with a new and unproven brand or product is not. Shawn Fels, owner of the Ozone shops in Oceanside and Carlsbad, California says, “You need to watch your buying when it comes to the fringe brands in your stores and focus on the brands that continually check. A great margin on something that doesn’t sell is much worse than a lower margin on something that does.”

One of the most fatal things you can do when business is down is worry more about your competitors than yourself. Don’t get sucked into a price-slashing contest with the rival skate shop across town. Focus on your business and the ways in which you can satisfy your customers’ needs while still maintaining a profit. With ten years of business and five locations in the Chicago area, Bad Boyz Toyz buyer Eric Manuzak says: “Do your homework and study your business. You can’t sleep on things and you need to stay up on the industry because things can change quickly.”

The ups and downs of running a business are inevitable. While you cannot control the economy, you can control your business. Be prepared to scrutinize everything you do and how you do it. When you change your business to meet the times, you’ll quickly discover that while the tough times don’t last, the tough people do.