On 2014-11-02, Rex wrote:
Iggy, (at the risk of breaking the off-topic cycle)

I spent many years in sales and marketing for an auto parts
distributor. I visited independent auto parts stores all over
Texas and Oklahoma. Many, many of them were Mom and Pop outfits
that were in a decades-long rut, making maybe $30K/year net,
working 6 days a week, and no vacations. They had a business that
was unsellable, and were flat worn out. Those people were
trapped in their cycle. Usually the best thing that happened to
them was when they finally had that bad month that broke the back
of the company. They had to get a job, and they were much
happier. I spent a lot of time and effort helping my customers
break that cycle and move their business to the point where they
could hire some help, take some time off.

I know a guy like that right now that let his store (in Dallas)
get reduced by the big national chains until he isn't even making
a living. He has a good job waiting for him, but he has to unload
the inventory first. He calls me once a week to help him find a
buyer. And it's *real* cheap right now. Anyone want to buy a
complete auto parts store?

The other side of that job was working with people looking to buy
a business. In so many cases they were planing to quit a job and
buy a store with their life savings. After visiting with them,
looking at their business plan (if any) and running the numbers,
most of the time they would have been "buying a job". Those
people I encouraged to re-think the plan. They would have ended
up 10 years later trapped in a store, savings gone, and making
less money than they did working for The Man. Oh, and no
benefits.

Math skills: You would e surprised at the number of business
owners who do not know the difference between markup and
margin. I have taught that subject many, many times.

ROI is another eye-opener for most of them. I would tell a store
owner "Oil is the most profitable product line in your store". Of
course, most hated oil. They made 10% (markup!) on it, where they
might make 35-40% on an idler arm. But that idler arm sat on the
shelf for a year waiting for a sale, where their entire oil
inventory would turn once a month. I still did not convince many
people. There are still people doing quite well in that
business, but the ones that excel - and escape the trap - are the
optimistic, pragmatic entrepreneurs that have fun playing The
Game. If the business isn't growing, it ain't fun.

But those people, and those skills aren't that common. And people that can maintain all that over decades of time are exceptional.

Thank you for a GREAT post, specific and illustrating similar points.

Owning a store, with a high cost inefficient business model, is a
perfect example of a business trap.

In any kind of business involving inventory, it is also not
immediately obvious how much money one is making, if you do not
properly deal with stale inventory. So there is always a temptation to
fool oneself into thinking that one makes more money than is the case
in reality.

i