This month's hot topic is retailing: opening up the second store, getting your product on retailers' shelves. Other letter writers ask where to find a marketing partner and how to compile a select sales-prospect list.
Beyond a Reasonable Debt?
After working in retailing for seven years, I finally developed a concept worth running with: small stores that sell watches and sunglasses. I opened my first store more than 18 months ago, and I'm planning my second outlet now. I figure the total start-up costs will be $85,000 to $100,000. That includes roughly $35,000 for inventory (paid for with company funds); $30,000 for fixtures (to be leased); and $20,000 to $40,000 for construction (to be borrowed from my bank). Is this too much debt for a five-year deal? My first store, in a mall, nets about 20% on gross sales of roughly $250,000. What should my debt and lease expenses be as a percentage of sales?
I'm sure other growing companies wonder what amount of debt is appropriate, but I cannot find those recommendations anywhere.
Tillman-Wolfe Enterprises Inc.
Atlantic City, N.J.
The Unkindest Cut
My company manufactures a guide for portable saws that enables them to cut with the precision of expensive radial-arm saws. We have sold more than 20,000 of these, mostly through direct mail, and have had no complaints -- but we have been unable to penetrate the retail and professional markets. Our packaging is bright and modern, but both retail chains and individual hardware stores have refused to stock the product. Trade shows and sales reps have also been unsuccessful, even when reps were offered generous commissions.
There are about 35 million portable saws in the United States, and all of them could benefit from our product. Perhaps readers can suggest a way to reach these large markets without spending millions on advertising.
Matrix Enterprises Inc.
West Worthington, Ohio
We have developed a software program that provides real-time updating of CICS/VSAM files and runs on IBM mainframes. However, our company has never sold mainframe software before and has no sales staff in place to introduce the product.
We have contacted a few local companies to discuss a joint venture -- they would market the product, we would support it -- but these efforts have failed. Nevertheless, we believe the product can meet a significant need. How can we locate someone to sell it?
H. Wardell Castles
International Systems Group Inc.
The "A" List
I work for a national landscape-architecture and site-planning firm, and I would like to develop a clientele in the Midwest -- as far south as Oklahoma and as far north as Minnesota, encompassing the entire grain belt.
Our firm seeks out individuals and institutions that, regardless of scale, share our dedication to exemplary planning and design. How can I collect a list of prospects who have been involved with such projects before? Are there publications that could help me with my research?
Keith D. Herren
Newport Beach, Calif.