Jan. 16/14 – As I drove by one of the Amy’s Loonie-Toonie Town stores today, my mind brought me to the past…
I met Chuck in 1998 through banking. He was one of my mortgage clients. He shared with me his idea of opening a dollar store franchise in Vancouver, then a novel idea, one that had not yet been explored at that time. I liked the concept of a franchise, so I agreed to go into business with him. Though armed with a banking, property management and restaurant background, I knew nothing about retail. However, instead of being scared, I was really excited to get into something new since I loved challenges. I learned as we proceeded. We started by studying the market to find the right location. I remember how long our brainstorming list was with all the questions we could come up with. The biggest one for me then was how to know what my sales would have to be to reach my break even point. I decided to pay my teenage cousins to stand on the street for 10 hours a day to count foot traffic for me so I could better forecast my sales – based on a percentage of the actual hourly and daily foot traffic and an estimated amount per transaction. This information gave me confidence that this was an idea well worth pursuing.
It was very hard to secure our first location because we did not have any prior experience in retailing. We went from one landlord to another trying to get a space, but we were turned down, not only because we didn’t have the experience, but also because they didn’t believe in what we wanted to do. Finally, we found a location that we felt was ideal. Luckily, the landlord was Chinese, so I was able to convince him to give me a lease considering my personal and family background. Our first location was in Broadway, which also became the largest dollar store in Vancouver back then. Business went really well especially after we were featured on the front page of a local newspaper. The funny thing was that after we opened, we had landlords from malls coming to us and offering us space because they saw the traffic the dollar store drew. Looking back, I saw the irony of the events: first, they were turning us down; then, when they saw the success, they were knocking on our doors, offering all kinds of deals in order to convince us to lease their space. Thank God I insisted on turning them down despite the fact that Chuck was tempted after some of them offered us 36 months of free rent. I rejected the offers because basically the places were dead malls, so even if they offered us free rent, we would still need to cover our labour and utilities on top of being tied down with our cash flow on inventory. Those malls were still dead the last time I checked, which was 9 years later.
I strongly believe in having knowledge of every area in the company in order to better learn about the business and improve from it. So I spent my time and energy mastering every role there was to learn, such as cashiering, inventory stocking, quality control, data entry, bookkeeping, merchandising and finally managing. I remember I used to work with all the staff for 18 hours a day for 3 weeks straight each time a new location opened. They did the 8-hour shift while I was there day and night. I think I was born to be a workaholic, and I actually enjoyed being one. As a result, my team worked extra hard because they saw how extra hard I worked too. I also earned a lot of respect from them since I was very hands-on, which they didn’t often see in owners. Obviously, after I had mastered one aspect of the business, I would stop since I knew my time would be better spent somewhere else. But with the experience I gained, I could now better train whoever was doing that job since I had already mastered it myself.
The reason for our success was the way we packaged our concept: we offered the stores to potential franchisees, offering to finance 50% of purchase price to show them that we were confident in the business and that we were willing to take the risk with them. On top of the franchise fee, we also added 10% on the inventory we sold to them since we were acting as the wholesaler for many of their items. We brought in our own containers from China so our discounts were huge that even after the 10% got added, the franchisees were still better off to let us shop for them than go shop on their own. It was a proven good concept, which was why we had a wait-list of buyers waiting for our new locations. Within 9 months, I opened the first 3 locations, all bringing in more income than we expected. By November 1999, the timing felt right to move on. As an entrepreneur I knew my strength was going to be finding new opportunities. Now on his own, Chuck continued with opening 5 more locations and he kept them all under the same name – Amy’s Loonie-Toonie Town.
I feel a great sense of personal achievement from this project because of the amount we made within the 9 months of the opening of the 3 locations. As of this writing these stores still exist, and my kids are still proud to tell all their friends that their Mom was the founder and is the person the store is named after. This, in itself, is success for me.
The big thing I learned from this experience is that being the first to do something has advantages. It also motivated me to like dealing with niche markets. What I learned has really helped me with my future businesses too. There is a Chinese saying that, loosely translated, means that one concept fully learned and proven right can be applied to and adapted to many other businesses. I firmly believe in this, and I also believe that a true entrepreneur should be able to take one business concept, apply it to others but improve on it each time. It’s like building blocks of concepts – the higher row builds on the previous one but higher in level, which means, better than the previous one. Indeed, the power of human intelligence is great. It is amazing how our mind is able to explore our stock knowledge, improve it, apply it, evolve and be better each time.