My Way: Expansion — The Second Store
By Sam Viviano

The Retail Florist

When I acquired my first shop, the first task was to get it running smoothly and profitably. Once I had the shop in order, I assumed it was time to purchase a second shop.

After all, a second shop means more sales, more profits and more money in my pocket, right? Wrong!

An Eye-Opening Experience

I started the search for a new shop by asking my contacts if they had any connections. During lunch one day, a salesman who had called on me for years mentioned a shop in downtown Toledo was for sale.

He said the shop was located in a hotel, and I could acquire it rather cheaply. The word "cheaply" should have been my first clue to take a closer look. But in my enthusiasm, I dismissed any negative thoughts.

With little investigation, I bought the shop. A young man had been the manager for two years. I asked him some basic questions about sales, customers and personnel. I also asked him how the register worked.

"I just push the 'no sale' key and put in the money," he said. (This was before computers or electronic cash registers.)

I didn't like the way the manager ran things and asked him to ring up the amount properly.

"I don't really know how to operate the register," he said. "Anyway, I count the money at the end of the day and record the sales from what is in the drawer."

The process didn't sit well with me. So I told him I had my own way of dealing with crooks. That night I received a call from the manager. He decided to seek employment elsewhere.

Lessons Learned

I have either purchased or built 16 different floral operations. The lessons I've learned through the years may help you avoid some of the mistakes I made:

Train personnel to take over the operation. Hire or train someone who understands "your way" of doing things. Whenever I purchased a flower shop and left the previous management in place, I lived to regret it. The old management couldn't change from their old way of doing things.

In one shop I purchased, for example, the managers I left in place actually told customers that the shop's prices were much higher then they would have been if the old management was still running things.

Investigate the location thoroughly. Ask yourself some of the following questions: How many cars per day go by the front door? Are there any plans to widen the street? Does the street on which the shop is located have an entrance or exit from the freeway? You can find out all of this information from your chamber of commerce.

I learned firsthand that these are important questions to ask. I worked in Detroit before freeways existed.

After the freeways were built, any shop located on a commercial street without a freeway entrance or exit died. Those shops with a nearby freeway entrance or exit thrived.

Have operational systems in place. Is your second shop going to be autonomous or are you going to run it as a satellite location with most of the designing, buying and delivering done at the main store?

I've found that centralizing buying and delivering works well. The satellite store has to do some of its own design work, however, in order to move product.

Limiting the second shop's responsibilities lets the manager of that second shop concentrate on sales. The manager's bonus is based only on sales, cost of merchandise and cost of labor. The main location handles the other parts of the business.

No Guarantees

Is opening a second shop going to bring the success you desire? Not necessarily. I've seen some very successful one-location shops do millions of dollars in sales. I have also seen multi-shop operations be very successful.

The answer lies in you and the shop you purchase. Do what you are comfortable with and what your particular community can handle. Investigate thoroughly — then work your hardest to make it succeed.