The downward spiral of a mature small retailer
So often, we focus on new tenants and concepts and forget about the mature tenant; the one who’s paid rent faithfully and seems have everything under control.
Until one day, something changes.
It could be as simple as road construction blocking access, or a competitor opening down the street. It might be something more complex like changing neighborhood demographics. Whatever the reason, that great tenant starts paying rent late and the phone calls begin. You’re faced with a panicked tenant and a big problem.
What happens to these small shops? And what can you do to prevent the problem?
Mature businesses (ten years or older) opened in a time when start-ups had a pretty good chance of success. It was a simpler retail world; a lot less sophisticated. Chances are the owner buzzed merrily along and never saw the need to change, upgrade or reenergize the concept. “If it ain’t broke, don’t fix it.” Right?
When you don’t evolve a business it’s bound to find a breaking point. Whether customers get bored or the store becomes irrelevant, a stale business is just that, stale.
How can your organization tackle this situation proactively? It starts with a property management team that has fostered good relationships with their tenants. In addition to declining traffic and revenues and an obvious change in product quality, here are some other triggers that indicate problems may be brewing:
Warning phrases
“Our business is mostly repeat customers.”
“That’s the way we’ve always done it.”
“We’ve never had to market before."
When an owner is stuck in the past, you know there’s a problem.
Tenured staff
Business owners take pride in having long term staff without realizing a troop of veteran personnel brings with it an abundance of issues that block business growth.
Forgetting the little things
A successful business is usually nuanced, filled with small experiences that combine to surprise and delight customers. As time goes by, these seemingly little things start to fall by the wayside. You cut enough and you get a completely different –and more ordinary – business.
No infrastructure
Talk to an owner about their business and when you hear, “It’s all in my head,” you know you’re dealing with a business built on a very shaky foundation. Ask simple questions like:
“What products aren’t selling?” (Well, they all sell.)
“Who is your target audience?” (Everyone!)
You’ll know in a minute whether or not they have the framework and skill set to move forward.
No technology
No surprise here. No website. No Facebook (Well, we have a Facebook page and my daughter is supposed to post but she never does.) They haven’t claimed their Yelp profile or worse, have bad reviews. If they’re not utilizing technology they’re light years behind the competition.
These are just of few of the easy-to-identify red flags. If the tenant is worth saving, the landlord should step in with an assistance program to bring the business back to life!
Tenant Mentorship focuses on small tenant retention programs on behalf of landlords and property owners. For more information on how we can help your small retailers thrive, email angel@tenantmentorship.com
www.tenantmentorship.com