Wednesday, May 14, 2014

The Front Story

Some will argue that the German economy right now is peaking.  Some will argue that it hasn't really recovered since 2008.  And some will argue that evolution is taking place....taking the lesser of business ideas and failing them.

This week, I walked along Rhein Strasse in Wiesbaden.  It's one of the bigger of the streets in town....where a storefront means something, and you pay substantial amounts of money to get that storefront.

There are three fronts on the street....empty.  Back in December, the three had occupants and doing some line of business.  It appears that all three ran out of 'fuel', and vacated the front.  And presently, nothing moving in.

If you walk around enough, you tend to find various business operations which have been around for years, and even decades.  In some cases, they are marginally making it....but don't want to admit failure.  Some are simply trying to build something, maket it, and sell it before anyone realizes that it's lacking potential.

In the current environment....it's a risky deal.  You need to put up capital to cover the first year.  You need funding to cover the remodeling.  You need marketing expertise and advertising gimmicks.  You need to get repeat customers or strong recommendations from the people you deal with.  All of this equals sixty hours plus a week, and a strong enthusiasm for something that might not be absolute in terms of success.  You need employees who show up on time, feel the same intensity as you, and key in exactly to what makes the customer happy to spend money with your product.

All of this, and then you have to deal with a picky property owner who knows he's got a five-star storefront on Rhein Strasse.  There's likely no negotiation on a lesser rental price unless he's had an empty front for six months.  This owner probably has an investment view of the property, and figures it into his retirement years or his vacation condo in Vienna.

The sad thing?  I'll go back by the same street in sixty days, with a new business in each location.  And in a year or so.....pass the area, and likely find at least one of the new businesses gone.  A repeat of failure...based on a hundred different varying issues.

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