Retail....the Opportunity Window for the 90's and Beyond
By Howard Bassuk

Timing in life is everything. Quite often it can make the difference between getting into a business at just the right moment, and missing the opportunity altogether. Sometimes people forget this when they think about getting into a business. They can become seduced by what an opportunity had become, and completely forget that the best time to grow that opportunity may have been years, and even decades ago.

In the 50's, 60's and 70's much of the great growth in franchising came from the food and automotive sectors of the franchise industry. They were areas that affected the most basic parts of our lives, and we were using them more and more often. Our lifestyles were changing, and those changes meant we needed to have more services.

Many of us left the cities and moved to the suburbs. We started to eat at restaurants more often, and we became increasingly more dependent on our cars.

Two income families started to dot the landscape, and free time became more and more important to us. Companies like McDonalds, Midas, KFC, Burger King, Taco Bell, AAMCO, 7 Eleven and Baskin-Robbins sprang up everywhere. They soon become household names and parts of our lives. These chains offered us products and services that we could not get before. They also made getting these services more convenient and more reliable than in the past.

As the franchise chains grew, many of the "mom and pop" neighborhood providers disappeared. Franchise chains in the food and auto sector replaced their less sophisticated less competitive rivals.

Today, many of us either know someone, or have heard about someone who has made millions and millions of dollars as a franchisee in these franchises. Look around you as you travel down Main St. USA. These chains are everywhere, and somebody just like you owns them!!!!

That's the problem....someone else owns them. And today, because these chains are already everywhere we look, it's not surprising that there is very little room for growth left in many of them.

The fortunes have already been made. The good locations have already been taken, and the "moms and pops" that were the competition 30 years ago, have been replaced by other sizable chains that are also excellent providers and very tough competitors. It's certainly no longer the ideal time to enter a lot of these markets.

Don't despair. It's certainly not time to give up hope! In fact, if you step back a little and think about what the past growth in the food and auto business means, it may help you to realize that in many businesses the best opportunities are still available.

Everyone knows that part of making a good investment is getting into it at the right time. Now there are so many hamburger restaurants, brake and muffler shops, pizza stores, and oil changing places, that it's hard to go through any area of town and NOT see them by the bunch! So, how can you get into business when so many people have gotten there ahead of you?

The answer is actually quite simple. Find another market sector that's not crowded yet with major competitors, and do the same thing that the food and auto franchises did years ago.

It's not to say that there aren't still good opportunities in food and auto, but rather for you to understand that both food and auto businesses are really just part of a much larger arena...RETAIL. As you look at the whole panorama of retail, you quickly realize that it's far from being saturated with major chains in every industry.

How do you pick one area or business to look for? Start with a plan. Ask yourself what was it about the food or auto business that attracted you originally?

Was it that you liked the hours of operation, or the number of employees required to run a food business? Was it the idea of getting your hands dirty in the auto industry? Probably not.

Most likely, what you like about them is that food and auto repair businesses have products and services that people always need. So, with more and more two income, two auto households, people relied more and more on their automobiles, and were also choosing to eat out at restaurants more often so the businesses were stable, basic and growable. In other words, the businesses were good, and the timing was right.

Apply that same logic to other businesses that you can get into today. Can the same things be said about some business opportunities now.

If you are still not convinced that you don't want to try to sandwich yourself into the food business, stop and think! W hen you go to the mall or the supermarket, how many stores that you see there are NOT food or auto stores? MOST!

Look around you....there are all kind of stores....clothing, toys, candy, books, art, dry cleaners, photo stores, printers, fitness salons, diet centers, video and computer stores virtually everything you want and need for your day to day life. How many do you use on a regular basis? How about your neighbors? Don't they use them too?

That's why they are there. We need them in much the same way that we need food and auto establishments. WE NEED THEM to do the things we want to do in our daily lives. That's why I think this is such a good time to be thinking about specialty retail, and retail service businesses. They provide us with products, services and answers to the needs we have in our lives today.

The world keeps changing. What started forty years ago with the migration of many families to the suburbs also meant new opportunities for smart investors. Now, new changes have brought new opportunities.

Unlike 40 years ago, today most families have two bread winners. That means that a lot of things that used to be done at home and the time to do them have changed. With both spouses working, there is less discretionary time to do things. There is also a lot more emphasis on the precious free time that families have together. Doesn't that mean there is opportunity to? Of course it does!

We all want to have products and services available to us so that we can enrich our lives, give us more and better free time, and make living more enjoyable and convenient.

Because of this we need more services. We not only don't have mom at home doing cooking, cleaning and laundry. She herself is out working, and loves the idea of services that can help her life be more productive and enjoyable.

This trend is certainly predicted to continue, which means that stores that provide products and services that make our busy lives easier, simpler and more convenient, will continue to be things that we want more and more of.

Many years ago, the department stores were king. Today, more and more people want specialty retailers that provide the specific products and services that we want and need.

To find one that could be a good business for you, think about what you want and need in your life. Think about areas where you have noticed that there are not enough providers, or that the providers are not reliable, sophisticated, and with the consistent level of quality that you need.

Look for areas that find "new" niches, or more sharply focus on large product demand areas. You may be thinking that this is difficult to do, but perhaps it's easier than you think.

Ask yourself about your own life...Is education important to you and your family? Perhaps you could find a business that provides educational services. If you like the outdoors....how about a sports related endeavor, or a business that sells things to the millions of people who, like yourself, want to be outdoors too? Do you like to fix up around the house? If so, how about a business that deals with home accessories, or decorations?. If you're starting to get the idea and are getting ready to celebrate, maybe you should consider a party store!!!

Your next opportunity could be an art and framing gallery or a business that provides photographic services. It could be a store that sells products for your all too often aching back, or even a place to get gifts for that "special someone" around the corner, or around the world.

There are many businesses that have products and services that you want, need and still have lots of opportunities for real growth. This means that you could have a great business if you owned a store that provides them to all the people who need them too!

There is another nice thing about the retail business that you may not have considered. Most are less complicated, than food or auto businesses. Usually, there is no need for sophisticated, expensive machinery or equipment You probably won't need a permit from the health department or the Environmental Protection Agency (EPA).

Best of all, this often means that specialty retail businesses are less expensive, and sometimes MUCH less expensive than the typical auto or food establishment. When you consider the fact that a less expensive business to start can easily make as much or more money as its more expensive counterpart, the attraction to them can become even more compelling! Isn't that a nice bonus to have....lower cost of entry, and therefore less money at risk!

So....what's hot, and what's not? Back stores are hot. Ever had a back, neck or spine problem? Most adults Americans do, or know someone who does. If you are a back sufferer what wouldn't you do to get some relief? Now there are stores that sell products to do just that! And they have millions and millions of potential customers!

How about education businesses? Are you concerned about how well your children learn and how well they can keep up? Do you worry about how well they can compete and succeed in the future? If you are, join the club! You will be happy to know that help is on the way.

There are businesses that help kids with everything from basic reading, to computer skills. There are stores that offer a wide variety of products, toys, games and learning tools to help the kids learn and have fun at the same time! Would you go to one of these, or send your child if you thought it could help? Many people will say yes without a moment's hesitation. Doesn't that mean that there is an opportunity here for you?

Want something even more basic? How about a dry cleaner? How many people in your household wear clothes that need to be dry cleaned? How big is your bill EVERY week? Do you ever see a time when it will not be a very needed service? What about your local dry cleaner...is it a sophisticated, customer service oriented store or do you feel you are having to settle because you don't have a high quality alternative? If you are settling, that means there is opportunity!

Are all the businesses I just mentioned in stable industries? I think so. Can you grow with them? Of course you can, if you are a good businessperson and the competition is not nearly as well entrenched and sophisticated as the competitors in the food business!

The truth is that opportunity abounds. Make sure you stay away from anything faddish or trendy and concentrate on businesses that we need today, and will need tomorrow.

I have mentioned just a few specialty retail sectors, and there are many. The point is that if you want to find something in a retail environment, with more current opportunity than some of the older businesses, I believe you can.

What are you waiting for? Twenty years from now, will you still be reading about someone else who identified a market and hit it big? Will the wide open business opportunity of today become saturated and tough to break into in the future....If you wait too long, the answer could very well be yes!

As I said, timing in life can be everything. Opportunity can be found all around you. Plan for what you want. Plan for what you need. Plan to achieve your dream, and seize the day, or tomorrow will belong to someone else.

Howard Bassuk is Founder and President of FranNet, the nation's largest group of franchise consultants. FranNet helps people find the right franchise, assists companies in becoming franchisors, and consults with franchisors on upgrading their sales systems.