A view of the industry through the
eyes of a chain buyer.
The Keys To Success – and
Dreams get you started, but
management skills make you profitable.
by Bud Izen (June 18, 2007)
(Note: Bud and Shelly Izen own and operate Scrapbook
Fever, a highly successful scrapbook store in Salem, OR. They will
be featured in the business seminar, "The Inside Secrets of
Charisma Retailers" by Kizer and Bender, at the CHA Summer Show
on Fri., July 20, 3-5:00 pm. To register, visit www.chashow.org.)
In a previous life, I was very active in the independent
electronic service industry back in the days when there actually was
one. It is easy to draw an EXACT parallel between independent
service and the scrapbook retail industry.
Most of the guys who started their own electronics repair
business were technicians who wanted to run their own business. Like
the guy who bought my store when I sold it in 1975. He wanted to
"make all the money." Prior to that, he had worked for the
best shop in town as a tech. Like a lot of guys – most guys – in
the business, he had spent a LONG time learning how to be a great
tech, and NO time learning how to be a good manager.
I left him a business that did not need to advertise. I had built
the business from scratch, and he could make a good living just by
keeping the doors open and not making too many operational changes.
First thing he did was lay off the other tech and the receptionist,
so the shop had to be closed when he was out on call or any other
reason. You know where this is heading. In two years when he paid me
his last payment, he attached a note saying that he was closing the
shop – not selling it, closing it. It had taken only two years to
destroy a successful business.
He understood his craft but had no idea of how to manage a store.
If you substitute scrapbook store owner for technician, it's the
About 20 or so years ago, there were two trade associations for
the independent electronic service industry. As the industry changed
away from less reliable vacuum tubes to semiconductors
("transistorized") to integrated circuits, the cost of
electronics decreased as complexity increased. Those shops that
could not become more productive failed. As the number of
independent service shops decreased, so did the financial base for
the two trade associations, which then merged into one. When there
were no longer enough independent service providers, the remaining
trade association likewise failed.
Try to find an independent electronic service dealer these days.
Good luck. It was not lack of technical skill that killed them all
off. It was lack of management skills.
Similar issues in scrapbooking.
Some scrapbook store owners are called "IBBA" (in
business by accident). These (in many cases) former homemakers went
into business as an extension of their love of their hobby. Nothing
wrong with that, per se. Problem is, they spent a LONG time learning
their craft, and five minutes learning how to be a retail manager.
Well, if you are in the right place at the right time, anyone can
make money for a while. But when business conditions tighten up,
then evolution occurs and you get survival of the fittest. If you
don't understand the concept of inventory turns and its relationship
to cash flow analysis, then you end up four years (or so) later
wondering why you can't pay your bills.
All your cash, of course, is staring you in the face. All that
product you bought because you loved it is yours forever because it
is NEVER going to move unless you basically give it away.
My wife has a business background as do I. She is a former office
manager and project manager. I've worked for myself most of my adult
life as a contract programmer, computer consultant, and contract
project manager, preceded by a 17 year career in electronics (store
owner for nine years, instructor for eight). So, we have a bit
different take on the scrapbook industry and run our store as
business-like as possible. My wife excels at staff management and
customer relations (and I am not just saying that because she is my
We bought our store from its original owner who operated it for
four years before developing health problems. (Financial health
problems in reality.) Under new ownership we now do approximately
five times the business the previous owner did, with no long-term
My wife is BRUTAL when it comes to non-moving inventory. We try
to keep nothing in the store over three months old unless it is a
staple item. We buy on a budget and have been working on developing
Open To Receive software.
When asked how we are doing, we tend to keep our mouths shut
because no one would believe us. We hired Kizer and Bender as
consultants and after their visit a year and one half ago, we
increased our business 40%, and this year we are doing better than
We see NO evidence of a slow down, and no sight of a loss.
I believe that the scrapbook industry is headed for some sort of
shakeout, some type of plateau. Vendors or store owners who entered
the market with no business plan other than to "get rich
quick" are going to be out of the market. Businesses that run
their operations business-like will succeed. We'll end up with fewer
but stronger vendors and stores. That is only good for the industry.
To paraphrase Shakespeare, the fault, dear scrapbook store
retailers, is not in the stars, but in ourselves.
(Note: Wish to comment on Bud's ideas? Email your thoughts
to CLN at firstname.lastname@example.org.
To read previous "Benny" columns, click on the titles in
the right-hand column.)