So its set. I'm officially trying to open a shoe store in Brooklyn. After my wet tour of several Brooklyn neighborhoods, I began speaking with two different realtors/landlords about spaces. One seems to be moving rather quickly... we've passed back and forth a number of 'letters of intent' or LOIs, where we're trying to find some common ground from which to draft a lease. The other space is moving very slowly. I don't know if the landlord isn't eager or interested... but I have a feeling the realtor is dragging his feet.
For anyone who is starting out in this process... it is not as simple as renting an apartment. I've had to reach out to several people to see if what the landlord is requesting is reasonable. Not having a great deal of experience makes this more tricky - not to mention that paying a lawyer to review everything you're doing adds up very quickly. I tried checking out some books on commercial real estate leasing and negotiations. Unfortunately they gave very different advice then my contacts did.
For example - one book -"Negotiate Your Commercial Lease"by Dale R. Willerton - suggests offering a personal guarantee in your letter of intent.
If you start a business as some legal entity other then a sole-proprietorship, then you have a legal structure that protects your personal assets from being on the line. In other words, you make a separation between your personal finances and your business'.
So, if you - in this case your business - signs a lease for 5 years, and 3 years into it your business goes bust, it is only the business that is responsible for the debts and not you as an individual.
Now, once you sign a personal guarantee then that whole legal structure's protection goes out the window, and you are now personally liable for whatever debt you signed the guarantee.
For obvious reasons, landlords want a personal guarantee, and for equally obvious reasons, tenants do not want to sign them. It would seem that it is really bad advice to begin your negotiation with conceding such a major sticking point - Assuming it is even a point that should be conceded.
In my case, negotiations are now in full swing on two fronts. I'm holding my breath, hoping that all goes well. I really like both these spaces, and am not sure I'll find something really good in their place, should both fronts fall through. To make matters worse, I learned today that one of the landlords, while considering my offer, and having already met face-to-face, is still showing it around, trying to get a better deal. This is of course logical on his part - since we didn't sign anything agreeing to exclusive dealings - but on learning that, it made me realize in how precarious a position I'm still in.
So nothing is set, at all, and I'm super nervous/excited to get the deal done.
In other news - I'm going to the WSA (World Shoe Accessories) Show in Las Vegas!!! At the end of July. I'm very excited about this. I've been teetering back and forth, not wanting to go, without the certainty of the business opening. But the longer I waited, the higher the costs became. Finally, I just decided it is worth the expense, even if things don't go smoothly with these negotiations.
To my knowledge, this show is the biggest trade expo in the industry. There, I will be able to see all the latest brands and styles. I hope to post some pics of the shoes I see, and maybe even what I hope to bring to my store. In which case, there may be a sneak preview of what I'll carry. I'm also thinking of adding a twitter account, to make the adventure more dynamic, and post throughout the day...
It would be great if anyone posts comments on some of the shoes I post. I would love to see feedback - especially from Brooklynites - on what they like or don't like.
Jul 15, 2009
Jun 30, 2009
Looking for retail space... in the rain
My mom always held on to her own superstition that rain brings good luck - at least for our family. She'll state this, and quickly follow it up with a series of examples:
It rained when you were born, it rained when we arrived to this country, it rained when we signed our first lease on a store, it rained when we bought our first home... etc.
So this is what I was consoling myself with as I splashed around Brooklyn's various shopping districts, umbrella in one hand, and my G1 phone flipped open in the other, jotting down phone numbers from empty retail stores.
I've seen several good locations. I've also seen a number of places I like, that are clearly empty, but with no sign. Later internet searches into the unmarked emptys only revealed what used to be there, but not who is leasing the place. It looks like realtors don't list locations by address but by neighborhoods.
Another frustration I have been coming across is that brokers, in a number of areas in Brooklyn, expect the tenant to pay their fee. The fee often being equivalent to 2 months rent. This adds a significant chunk to startup costs, and will figure as a large hole in my business plan figures.
Another factor - that may seem obvious - is that huge fluctuations in rent costs between different streets and neighborhoods. Even within neighborhoods, the difference of just a few blocks can mean several thousands of dollars a month in rents.
My current hope is to be able to use the current economic climate to my advantage, putting pressure on landlords to lower rents, provide better terms, and maybe even take on or split realtor fees.
Having collected several locations, in several neighborhoods, I've now scheduled appointments with several realtors for Monday and Tuesday to look at different spaces.
It rained when you were born, it rained when we arrived to this country, it rained when we signed our first lease on a store, it rained when we bought our first home... etc.
So this is what I was consoling myself with as I splashed around Brooklyn's various shopping districts, umbrella in one hand, and my G1 phone flipped open in the other, jotting down phone numbers from empty retail stores.
I've seen several good locations. I've also seen a number of places I like, that are clearly empty, but with no sign. Later internet searches into the unmarked emptys only revealed what used to be there, but not who is leasing the place. It looks like realtors don't list locations by address but by neighborhoods.
Another frustration I have been coming across is that brokers, in a number of areas in Brooklyn, expect the tenant to pay their fee. The fee often being equivalent to 2 months rent. This adds a significant chunk to startup costs, and will figure as a large hole in my business plan figures.
Another factor - that may seem obvious - is that huge fluctuations in rent costs between different streets and neighborhoods. Even within neighborhoods, the difference of just a few blocks can mean several thousands of dollars a month in rents.
My current hope is to be able to use the current economic climate to my advantage, putting pressure on landlords to lower rents, provide better terms, and maybe even take on or split realtor fees.
Having collected several locations, in several neighborhoods, I've now scheduled appointments with several realtors for Monday and Tuesday to look at different spaces.
Jun 26, 2009
Why Entrepreneur? What to do?
For context, a little about me:
My family came to the US - Canarsie, Brooklyn - the summer before I entered the 4th grade.
Ever since then, in some form or other, they have been in retail. First selling men's "active wear"in New York's then flea markets; later, women's shoes in Florida's flea markets.
My brother and I spent our childhoods working with our parents, helping out as we could.
When I turned 16 and was able to drive, I would go out on the weekends and set up shop, selling shoes at another market, to help out. My parent's plan for me was to go to college and become a professional. My mother's dream was for me to sit in an office (with air conditioning) and have my weekends off.
So, I went to college, got a degree, and began working as a professional. Slowly making my way from Florida, back to Brooklyn. After a number of years working for others, a few things became clear to me:
* I enjoy hard work and challenging myself, but dislike the idea of doing so for someone else's benefit. (With the exception of charity of course)
* While I can see or imagine some amazing jobs down the road - on a long career path - the truth is, that with a non-technical B.A. it'll be a while until I can climb the ladder to what I hope would be a satisfying and fulfilling position. On the other hand, being my own boss will force me into a decision making position, with all its risks and rewards, now!
While I don't have the experience of a seasoned executive, or the knowledge of an MBA grad. I do have the benefit of my upbringing, and growing up in a family business. I'll probably make many mistakes - hopefully not putting myself under - but the allure of creating something myself, and succeeding at it, is jut too great.
The more I thought about these things, the stronger my conclusion was that I should work for myself.
------
Most recently, I've found myself unemployed, and with the time for this type of self-reflection. And so, I've begun what is turning out to be an iterative process of elimination on the path to self-employment. I'll spare you the pain of most of the iterations, so here is a summing up of what I've concluded:
My initial instinct has been to shy away from retail. For one, it is something I've done - a lot! Secondly, the economy is bad right now, who's buying stuff? And finally, I've watched my parents struggle for 15 years with a store. They have been trying to achieve the dream of 'leaving it with a manager' letting it 'run itself' yet always being disappointed, and always being tied down to the store. They can barely take vacations, or days off.
I don't care how hard a worker you are, or how committed to a goal - the prospect of 7 day work weeks, with no breaks, in perpetuity is not an appealing one.
On the other hand, it is something I've done - a lot.
I really enjoy the daily interaction with a multitude of people. I think I would find the challenges of staying on top of a market and keeping my products relevant satisfying. If I have my own store, I'll have an almost limitless outlet for my creativity through marketing and store displays.
And lets not forget the dork appeal of being able to analyze my sales figures, expenses etc. Maybe I could even dust off the'ol statistics software package I bought for that class in college and run a regression or something crazy like that.
So yeah, from this pro/con list, I vote pro.
The choice of what my retail endeavor will be is obvious.
If I know anything about retail, I know shoes!
My family came to the US - Canarsie, Brooklyn - the summer before I entered the 4th grade.
Ever since then, in some form or other, they have been in retail. First selling men's "active wear"in New York's then flea markets; later, women's shoes in Florida's flea markets.
My brother and I spent our childhoods working with our parents, helping out as we could.
When I turned 16 and was able to drive, I would go out on the weekends and set up shop, selling shoes at another market, to help out. My parent's plan for me was to go to college and become a professional. My mother's dream was for me to sit in an office (with air conditioning) and have my weekends off.
So, I went to college, got a degree, and began working as a professional. Slowly making my way from Florida, back to Brooklyn. After a number of years working for others, a few things became clear to me:
* I enjoy hard work and challenging myself, but dislike the idea of doing so for someone else's benefit. (With the exception of charity of course)
* While I can see or imagine some amazing jobs down the road - on a long career path - the truth is, that with a non-technical B.A. it'll be a while until I can climb the ladder to what I hope would be a satisfying and fulfilling position. On the other hand, being my own boss will force me into a decision making position, with all its risks and rewards, now!
While I don't have the experience of a seasoned executive, or the knowledge of an MBA grad. I do have the benefit of my upbringing, and growing up in a family business. I'll probably make many mistakes - hopefully not putting myself under - but the allure of creating something myself, and succeeding at it, is jut too great.
The more I thought about these things, the stronger my conclusion was that I should work for myself.
------
Most recently, I've found myself unemployed, and with the time for this type of self-reflection. And so, I've begun what is turning out to be an iterative process of elimination on the path to self-employment. I'll spare you the pain of most of the iterations, so here is a summing up of what I've concluded:
My initial instinct has been to shy away from retail. For one, it is something I've done - a lot! Secondly, the economy is bad right now, who's buying stuff? And finally, I've watched my parents struggle for 15 years with a store. They have been trying to achieve the dream of 'leaving it with a manager' letting it 'run itself' yet always being disappointed, and always being tied down to the store. They can barely take vacations, or days off.
I don't care how hard a worker you are, or how committed to a goal - the prospect of 7 day work weeks, with no breaks, in perpetuity is not an appealing one.
On the other hand, it is something I've done - a lot.
I really enjoy the daily interaction with a multitude of people. I think I would find the challenges of staying on top of a market and keeping my products relevant satisfying. If I have my own store, I'll have an almost limitless outlet for my creativity through marketing and store displays.
And lets not forget the dork appeal of being able to analyze my sales figures, expenses etc. Maybe I could even dust off the'ol statistics software package I bought for that class in college and run a regression or something crazy like that.
So yeah, from this pro/con list, I vote pro.
The choice of what my retail endeavor will be is obvious.
If I know anything about retail, I know shoes!
Jun 25, 2009
My 1st post
I called this blog "Brooklyn StarUp" because that is where I live, and what I want to do. I don't have a startup, I am no technology whiz, and unfortunately no new groundbreaking idea that will revolutionize how we communicate or cook an 8 minute meal with a food processor.
What I do have, is a burning desire to be self-employed.
My aim with this blog is to share a little about why I think this is something I'd like to achieve as an end in and of itself; as well as share my journey to that goal. Hopefully, the 'journey' part of what I'll write will be short lived, and this blog can shortly transform into a journal of running my own business.
Time will tell...
P.S.
Since I know there are many other people who have successfully pursued a similar path, or who are in shoes much like my own - I encourage any readers to share your thoughts, questions, and opinions with me. I would love for this to become a forum in which like minded readers can learn from each other.
What I do have, is a burning desire to be self-employed.
My aim with this blog is to share a little about why I think this is something I'd like to achieve as an end in and of itself; as well as share my journey to that goal. Hopefully, the 'journey' part of what I'll write will be short lived, and this blog can shortly transform into a journal of running my own business.
Time will tell...
P.S.
Since I know there are many other people who have successfully pursued a similar path, or who are in shoes much like my own - I encourage any readers to share your thoughts, questions, and opinions with me. I would love for this to become a forum in which like minded readers can learn from each other.
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