Franchise Pick

A Small Business Christmas Tale

by sean on December 6th, 2007

(FranchisePick.com) This post is a desperation entry in an ongoing intra-b5media business channel blogging contest. If you really care, you can read all about it here. FranchisePick.com is a member of the team called the “Pros” whose butts, thus far, have been getting kicked by arch rivals the “Aces.” This week’s assignment is to help Kay the Apron Lady decide if she should buy or rent space for her expanding business. So we pulled out all the stops and hope that we can win if only by sheer word production.

__________________________________________________________________

A Small Business Christmas Tale

OR

How the Holiday Spirits Saved Kay the Apron Lady

It was December and Kay the Apron Lady’s phone had finally stopped ringing.

All of the shops selling her children’s aprons & hats were too busy being screamed at by customers to call and scream about Kay’s inability to get them enough inventory.

Kay had only been able to produce about half the inventory the shops eventually wanted to buy. Her web customers were upset because she was sold out by December 1. She had to find a way to increase her production. She felt a knot forming in her stomach.

At breakfast, Kay’s family’s snide complaints about her fabric and packing materials strewn about (her “crap” as they called it) were getting more blatant and hostile. Young Suzy spit out some packing peanuts that had somehow gotten mixed into her Sugar Pops. Little Allan coughed up a piece of bacon that turned out to be a felt apron applique, while the baby sat in the corner grinning, waving some pinking shears and a handful of cat fur.

Kay felt the knot getting tighter and larger. She had to increase production AND get her business out of the house. Asap.

Later that morning, Kay met with a business broker who showed her a quaint brick building just down the street from her house. The broker explained the many benefits that buying a facility for her business would provide, including:

· Fixed Costs: Locking in a commercial mortgage long-term would provide Kay with clear, fixed costs.

· Tax Deductions: The cost of owning and operating a commercial propertyy would provide expense deductions in the form of mortgage interest, property taxes and other items.

· Additional Income: As Kay would not need all the space in the building at first, she could also generate rental income from the property.

· An Appreciating Asset: Paying off the building and having the property appreciate over time would provide a saleable asset that Kay could use to fund her retirement or post-nervous breakdown rehabilitation.

Buying made a lot of sense to Kay, and she was certain buying was a smart way to go. The knot in her stomach did not, however, go away.

That afternoon, Kay met with a commercial leasing agent who showed her warehouse space in a nearby industrial park. It only required a three-year lease and offered a lot of advantages:

· Prime Location: This was a new, high profile, thriving business park with lots of growing businesses… not the old part of town she’d have to settle for if she bought.

· Retained Working Capital: With the leased space, Kay couldn’t invest in more inventory instead of sinking it in real estate. In addition, her ability to borrow funds will not be as limited as with buying office space. Plus, she wouldn’t have to pay for maintenance and upkeep.

· More Time: Any type of ownership comes with headaches. A leasing option would let Kay focus solely on running her business.

Leasing made a lot of sense to Kay. The space seemed perfect. But somehow the knot kept getting tighter.

At dinner, Kay’s husband, who found a spool of thread in the brussel sprouts, raised a third option. They could build an addition on to their house like their neighbors, the Hendersons, when their AMWAY business started taking off. They would get the tax write-off from the property and a lot of other advantages. That seemed like the perfect solution! Kay would call architects the next day. They celebrated with some hot buttered rum and Kay went to sleep happy, the knot in her stomach gone.

Kay awoke two hours later to the sound of sirens and a bullhorn from the Henderson’s next door. She rushed out into the cold to learn that Eileen Henderson was barricaded inside her newly renovated house and was threatening to ignite a pallet of aerosol Amway products. The neighbors said that Eileen had received a notice that their addition and home business violated their R2 zoning designation, that her husband had run off with that hussy Mary Kay lady, and that payment was overdue on a $25K worth of non-returnable shoe polish, jewelry cleaner and Alfalfa supplements.

Back inside the warmth of her home, Kay sat down at her kitchen table and proceeded to drink an entire holiday variety pack Samuel Adams Ale in rapid succession, starting with a bottle of Winter Wheat, then a Samuel Adams® Holiday Porter, then a Samuel Adams® Cranberry Lambic, then a bottle of the Old Fezziwig® Ale. Six ounces into the Samuel Adams® Winter Lager, Kay slumped forward. She woke with a start when her head hit the table.

From the living room shadows, Kay could make out the blurry figure of a man. He seemed vaguelly familiar.

“Are you…” asked Kay, “the Ghost of Christmas Past?”

“No,” said the man, stepping into the light and extending his hand. “I’m Jim Koch, President and Founder of the Boston Beer company, maker of Samuel Adams. Are you enjoying my award winnng handcrafted seasonal ales?”

“Not really, Jim,” said Kay, beckoning Jim to have a seat. “I’ve been slamming them because I don’t know what to do about my business. Lease? Buy? Build?”

“You know Kay,” said Jim Koch, helping himself to an Old Fezziwig®. “I started the Boston Beer Company in 1985 and, frankly, I didn’t have a pewter pot to pee in. Today, I sell more than 1.3 Million barrels of this swill a year, and rake in more than $300 Million. Did you hear that? $300 Million!”

“That’s amazing, Jim” said Kay. “Tell me: Did you lease or buy?”

“Neither,” said Jim Koch. “Any fool can make stuff. The magic is the myth, the story, the personality, the BRAND. I had the stuff made at the old Iron City brewery in Pittsburgh.”

“Not Boston?”

“Boston? Never been there. I’m from Cincinnati. Over the years, I subbed out production to the Pittsburgh Brewing Company, maker of Iron City beer, Stroh breweries, Blitz-Weinhard brewery, and Cinci’s Hudepohl-Schoenling brewery, which we eventually bought. I spent my time coming up with cool stories, starring in commercials, doing interviews, making big sales and spending money. That’s what you should do, Kay. Be a visionary. Find someone else to do the tedious stuff and get out there and become a legend, like me.”

“$300 Million?”

“$300 Million. Find someone to do your production and do only what others can’t do: sell. Just like Dell computers, Snapple, Arizona Ice Tea and many other companies that contract out their production.”

“What do I tell my kids in the meantime?”

“Tell them to shut their yaps and finish eating their bowls of packing peanuts or they’ll soon be paying for their own cell phone bills. Now finish your handcrafted lager, Kay. It’s late.”

“Thanks so much Jim,” said Kay, relieved. “I just hope I remember this in the morning.”

“Don’t worry, Kay” said Jim Koch, fading into the darkness. “If you need me, I’m always as close as your fridge.”

The snow glistened as it wafted through the festive red and white flashing lights of the armored SWAT mobile bomb squad transport vehicle, and as a fully subdued Eileen Henderson headed off for psychiatric evaluation. Kay went to bed and smiled, knowing that this was going to be the best Christmas ever.

Share This

Related Stories

• Merry Christmas from FranchisePick.com
• It’s a Wrap: 16 Year-End Posts for Your Small Business
• Phony Bull-oney: Red Bull Vending Scam Alleged
• Death of Fratelli Ravioli Franchise: A Cautionary Tale
• THERE’S ONLY ONE VALID REASON FOR OWNING A BUSINESS

POSTED IN: :-) Humor, x b5media