I spoke to a friend that was somewhat upset because his cleaner closed last week. He used them for over 25 years. It was very convenient and he got into a routine where he would drop off and pick up his cleaning and laundry, get some bagels if he was there in a morning, or a pizza if he stopped off on the way home from work. There was a drug store in the strip center and he would occasionally stop in there.
He liked his routine, but it was greatly curtailed when the pandemic started. He stayed home the first couple of months, wore workout clothes and sneakers, and this routine pretty much was halted. When he started getting out, he still did most of his work at home but started getting bagels and pizza and stopped at the drug store but skipped the cleaner except to stop in once in a while to say hello.
About five months ago, he started going into his office two or three days a week and also started to dress a little more businesslike. His weekly trips to the cleaner became an every other week drop-off and pick-up. Slowly he got back into the fold. Until last week when the cleaner closed.
Besides feeling bad that the cleaner lost their business, he realized he would need to find another cleaner and there wasn’t one that was too convenient to him, and then he started to feel bad for himself. His routine was not going to get back to what it was and he would have to go out of his way for future cleaning needs.
I thought about his problem but in terms of the cleaner. They lost their business, and I was wondering if it could have been saved. I attribute the closing to a severe drop in revenue. Every business experiences ups and downs, but the pandemic has decimated many small businesses. I assume the cleaner cut their expenses to the bone but the revenue loss could not be overcome.
This also got me thinking of the “value” of the cleaner. It wasn’t just a place that cleaned clothes. It was also a convenient place and part of a comfortable routine. You might say it was a lifestyle booster. So, my question is why wasn’t my friend also paying for that? He wasn’t and this is where I see a conundrum.
People patronize retail businesses to buy what they need, and usually shop at places that have competitive prices. It is also understood that certain “convenience” stores charge more than the larger stores situated in shopping centers. Well, if a store is in danger of closing, why not treat them as a “convenience” store and pay a little more for that? If that “little more” is enough to make a difference, then why not? It can’t be that high where it will bust the customer’s bank and the cumulative “little more” might make the difference in keeping the business from failing. If this is so, how much is it worth and how much would make a difference?
There is some amount that would not be too much to pay and also would be just enough to keep the business open. This can be handled in a number of ways. The store could determine how much added revenue would make the difference. Each customer could be asked to pay their proportionate share of that monthly, or with a flat fee added to every sale, or a percentage surcharge to each purchase. I like the surcharge method. Let’s suppose the difference would be eradicated with 22% added sales revenue which would go directly to the bottom line. That could be added to every sale. It would spread the burden over all the customers based on their usage. This could not be that high to encourage customers to go elsewhere and would maintain the convenience status quo. Question: How much different would this be from surcharges applied by utility or carrier companies that routinely add an energy, gas or raw material cost surcharge?
This concept can be applied to most any small business – a favored restaurant, a local motel, a printer, trophy maker, convenience store, shoe repair shop, barber or hairdresser, nail salon, daycare center, laundromat or cleaner.
My suggestion doesn’t provide all the answers, but it is something worth considering.
If you have any tax, business, financial, leadership or management issues you want to discuss please do not hesitate to contact me at [email protected].
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