Several months ago I was asked by a local banker to visit a C-Store. The owner wanted to get some financing in order to restock his inventory and build it up and the banker could not make the loan happen with the financial situation of this particular C-Store.
I met with this owner for about an hour and a half. True, his inventory was down substantially. Many of his shelves and hooks were bare.
Throughout our conversation, the owner had one basic question – Got the loan? In other words, the only focus he had was to borrow more money so he could buy more inventory so he could sell more product.
That’s where his thought process ended. I continued – “So you have more inventory. As a result, you can sell more product which allows you to? Cover the loan…”
“Next, you will want another loan to purchase more inventory so you can again cover an even bigger loan.”
I coached this C-Store owner that he didn’t need a SBA loan. It was true he needed inventory. And it was true that he needed cash (or credit) in order to stock the additional inventory.
Time and again I advised the owner what he really needed was not more inventory or more credit. He needed to enhance his marketing skills.
More specifically, here’s what he needed to do:
1. Build a customer list. Since this was a single location C-Store, building a customer list using a loyalty card program would not make good business sense. As a result, this store needed to build a customer list via other means than a loyalty card program.
2. He needed to learn why his customers visited his store. As I recall, there are three convenience stores within three blocks of this store. Two independents and one Speedway. Learning why his customers visited his store rather than the other independent or the Speedway would give him the insight on how he should market his store. Examples I can think of based on his store:
Fresh made sandwiches using roasts, turkey breast and other “real” meat rather than pre-cut, manufactured meats.
Higher cash payouts on lottery
Broader selection of alcoholic beverages – more than beer and wine
Fresh coffee in clean urns
3. He needed to enhance the relationship he had with his customers. This could be done by giving away a small birthday present, carrying the meat selection the customers wanted for their fresh made sandwiches, enhancing the variety of soda pops, determining which candies sold well and resetting the store based on sales and inventory turns rather than haphazard POG, bringing in a food service company to assist him in planning his POG, etc.
At the end of this 90 minute discussion, the owner asked me, “Can you help me get the loan?”
That was eleven months ago.
I happened to be near his convenience store today. I wondered whether the convenience store was still open. It was. I walked in simply to see whether the same owner was in the store. He was.
And his question to me…
“Got the loan?”