Open and Closed: A case for the life of a small business in Bay Ridge
Written by Rosalie Drago
Any Bay Ridge resident who strolls the avenues knows that every few weeks a new business opens while another vacant storefront, with skeletal remains of shelves and tables bears the FOR RENT signs.
Though there are many economic development studies dedicated to the workings of a retail corridor, it is difficult to be purely scientific about analyzing the problem. One can compare demographic data and look at trends of course. There is also the conversation with the local businesses and residents that shed at least a little light on the subject.
The obvious and most prominent culprit for the struggle and demise of many businesses in the past year is the economic crisis. Nearly all small businesses rely on a credit line to pay their bills. In order to keep customers coming in they have to order product, in advance of the customer service. To operate a small restaurant, spa or retail shop most owners require between $15k and $30k credit to purchase goods and pay expenses. Each month that credit line gets paid down when customers come in and spend money. When the market crashed last year, many banks pulled the store owner’s credit lines. If a store owner didn’t have several thousand of their personal money saved they couldn’t operate.
What is not so clear is why, when credit lines weren’t an issue, some businesses lived on while others closed their doors. Putting aside those businesses that did not do their research in the market and had no prior experience in the type of place they opened, let’s look at a few examples. Over the course of a few weeks I surveyed about 30 residents and talked with stores who are staying afloat, flourishing as well as those who have invested thousands in a new business only to lose it all and walk away.
One of the most curious cases of a store that didn’t last was Chip Shop. Owner Chris is successful, with business increasing at his other two Brooklyn locations on 5th Avenue and Atlantic Avenue in spite of tough economic times. Chris told me he used all the same promotional tools when he opened his store in Bay Ridge as he did at his other locations: joined the local association, advertised in local papers – to no avail. “The people just never came” he said.
When asked people shopping on Third Avenue about Chip Shop one answer emerged consistently – location. Many people said they rarely venture past 77th Street to dine, doing most of their dining between 77th and 101st. A few others said they didn’t like the service and when asked if other local restaurants provide better service they admitted that, they don’t always, but since they know the owners they are quicker to forgive any mishaps. For Chip Shop, any Bay Ridge customers they did attract are now visiting them at the Park Slope location.
While several business owners agreed that a location in the 80’s would have been more conducive to success, they had a few other things to add.
“Failure is not an option, this is my only business” said Marianna, owner of Lola’s Boutique who recently expanded and moved from 86th Street to Third Avenue. “Maybe they compared sales to the other stores and thought this wouldn’t be profitable. I have had to dip into my own pocket over the years to survive, but I can’t just walk away.”
“Many Bay Ridge residents are a bit xenophobic of businesses coming here from other neighborhoods. We had people coming in when we first opened who were practically “accusing” us of being a chain from the city. It was hard for them to accept the fact that we were locals, in my case a 4th generation local. Now that we’ve been there a year, more people are starting to give us a chance.” Says Allison, who owns and operates Rob celli’s “In other neighborhoods, when a new place opens people will flock to it just because its “new” and “exciting”. In Bay Ridge, everything is a routine- people go to the same places to buy the same things on the same days. You need to be around long enough to become part of that routine.”
Sheila, Maria and Maureen, owners of The Green Spa & Wellness Center agreed. “The Bay Ridge customer is very different than that of other neighborhoods. Many people living in Bay Ridge either grew up here, returned here, have family here. Other areas of Brooklyn have a more diverse and transitory group of people who are moving in from Manhattan or other areas. In our experience, Bay Ridge residents want the personal relationship and recognition.”
So what has made these businesses succeed? Perseverance, flexibility and a committed local market.
For The Spa it is the clients. “We truly credit loyal guests who we have developed close relationships over the years and are thankful that they continue to stay with us.” Being hospitable to those loyal customers is the key according to Maureen. “I come from an Irish family when someone came to visit our home; we invited them in for a cup of tea and a snack. They stay a little longer and you have a nice experience together. The point is not to literally feed everyone that walks in your door – if you are a toy store – but find out what you r guest is hungry for and add it to your business.”
What do they cite as they keys to their success? Constantly analyzing business, making changes and creating reasons for customers to come back.
According the Allison being able to change with the economy and keeping our business plan flexible is their main focus. “People said that they wish we had seats so they could sit down, eat and hang out with us. We added seats a few weeks ago for this purpose, and we’re seeing a whole new clientele come in along with our regulars. We also decided to try run with one of our particular strengths. I’d run a successful custom baking company in Bay Ridge for almost 8 years, so I brought that back in the form of our cupcakes and they became more popular than we could have imagined. We’ve been written up nationally, had orders from across the countries, and had people travel across the country specifically to try our cupcakes!”
For Maureen at The Green Spa is a cycle of getting feedback, tweaking the business and hosting events. “We are continuously making changes and focusing on something new. At times our concentration is with our online business, at others it is studying our products and new products that are coming out on the market, at other times it is training our staff on new treatments and practices, at other times there is a focus on special events and spreading the word.”
What have you learned as a result of running a business in Bay Ridge?
“Owning a business here taught me a very important lesson about my own shopping habits” says Allison “if there’s something in the neighborhood that you love and you don’t support it, don‘t be surprised if it goes away”
Advice from the ladies at The Green Spa? “Networking and patronizing local businesses. . It definitely comes back to you in some way… either those businesses return the loyalty or recommend you within the neighborhood.”
While the best business practices that local store owners mentioned are a sure win. What customers want still seems to be an intangible. To that end, the Merchants of Third Avenue Civic Improvement Association will be conducting a market survey to understand what residents of Bay Ridge want from their shops and restaurants. That survey will be available after October 4th on their website www.thirdavenuebayridge.com and in print at many of the local businesses.
Rosalie Drago is a consultant providing marketing and economic development services to neighborhoods and small business in Brooklyn. She works with neighborhood associations to create programs, events and conduct research that provide the much-needed support to help small businesses survive and prosper. For more information visit www.dragobrooklyn.com.
Informative post, thanks for sharing