How To Start and Operate Your Own

By Dusty and Bonnie Henson, Owners "World Famous" El Paso Saddleblanket Co., El Paso, TX

Free Catalog
Chapter I
Chapter II
Chapter III
Chapter IV
Chapter V
Chapter VI
Chapter VII
Chapter VIII
Chapter IX
Chapter X
Chapter XI
Chapter XII
Chapter XIII
Chapter XIV
Chapter XV
Chapter XVI
Chapter XVII
Chapter XVIII
Appendix A
Appendix B
Appendix C
Chapter II


Have you already decided in which part of the country you're going to set up shop? If you're ready to pull up stakes and relocate, the hottest marketing areas are:

A. Jackson Hole, Wyoming. Here the local culture is an interesting mix of Cowboy, Indian and Mountain Man. The area has a fast growing population and an enviable tourist trade summer and winter.

B. Branson, Missouri. Although not geographically in touch with what most people would consider Southwest, the town has a lot of western culture due mainly to the influx of country music entertainment. The area has a continual turnover of visitors coming to hear the music.

C. Santa Fe, New Mexico or Phoenix, Arizona. Both cities are in the heart of the action of all things Southwest. The weather is pleasant, the lifestyle marvelous and tourist traffic is built in year round. Because of these advantages you can expect shop rent and the cost of living to be higher than normal.

The wonderful thing about a trading post is that it can prosper in hot towns like Atlanta, Denver, Las Vegas, San Antonio or very popular regions such as Smokey Mountains, Branson, North Florida, the Ozarks or the Indian country of the Southwest.

Stable tourist towns such as San Francisco, New York, New Orleans, Nashville have lots of room for a good Southwest store or you may prefer the a small town in rural Vermont, Oklahoma, Texas or Kansas. If you get a lot of merchandise and hustle, these can be good locations. A lot of midsize cities such as Abilene, Sacramento, and Pittsburgh are desirable because of inexpensive downtown locations .

Also if there seem to be several Southwest stores in one area—GOOD--locate near them. The great thing about a Southwest trading post is the variation of merchandise, even if it is another El Paso Saddle Blanket customer, chances are there won't be that much overlap.

Once you have chosen a particular city or town in which to headquarter, you need to start examining the area piece by piece. Towns grow and change. Do lots of driving and exploring to make sure you discover where the action is. Every community has different levels of business activity centered in varied types of structures and settings.

Let's examine the character of several distinctly different areas and consider the potential for a "Southwest" store.

1. Downtown. There are usually tall buildings occupied by financial institutions, utility companies and government agencies. Extra office space is generally leased out to attorneys, consultants, accountants, secretarial services and a host of small support businesses. This is a concentration of relatively high income wage earners.

A good visible street level location in the daily paths of these people can pay off. It is extra beneficial if hotels are close by. Out of town visitors will pass by your store front as they venture out to restaurants, entertainment or business appointments. Carefully observe the pedestrian traffic in the downtown area to determine which shops are exposed to the most traffic. Only consider street level locations.

2. Renovated Downtown Business District. Many cities have given a facelift to older sections of their original downtown to revitalize the area. What was warehouse and industrial space is turned into lively restaurants, bars and entertainment centers. If you see a group of gift shops or galleries doing well in such an area, this holds potential for a "southwest" trading post.

Your shop should be vibrant and have a lively atmosphere to capitalize on the patrons wh are obviously out for a good time. Festive music and bright lighting will lure in shoppers.

3. Old Town / Historical District. This is not necessarily the same character as the above mentioned renovated downtown. These areas pay tribute to a particular place or event of historical significance. Because these monuments, structures or sites are written up in travel guides and promoted by tourist bureaus, out of town visitors are apt to seek them out. If the district already has some good restaurants and gift shops, analyze its potential in terms of traffic daily and seasonally. Again, if major hotels are within walking distance, it is a big plus.

4. Civic Center. Convention hall, special events auditorium, sports arena—the success of businesses in this area depends mainly on their proximity to large hotels. Good pedestrian traffic is the key. One advantage to this situation is that you have a continual turnover of visitors. New potential shoppers arrive daily.

Get to know someone in your local convention and tourism bureau. They will happily give you inside information on the schedule of events and possibly steer business your way.

5. The Mall. As intimidating as a large mall may be, this location does have distinct advantages:

  a. Built in customer traffic 7 days a week, 11 hours per day.

  b. Promotions and advertising provided to draw shoppers.

  c. Covered walkways or fully enclosed-- all-weather shopping.

  d. A pleasant, lively atmosphere.

  e. Huge lighted parking lots.

  f. Security guards day and night inside and out.

  g. Building maintenance provided.

  h. Provisions for janitorial service.

  I. Possibly utilities furnished.

  j. Possibly some or all liability insurance provided.

  k. Special events and holiday promotions provided.

  I. Small stores benefit from the advertising done by the large anchor stores.

6. Strip Center. This is a relatively new concept of retailing--six to twenty-some store fronts joined together by common walls and sharing common walkways and parking space. These centers were constructed by developers on a "strip" of land fronting a busy street or roadway.

Being newer than most city buildings, strip centers generally have a fresh, clean look; are in good repair as far as roof, heating, cooling, and plumbing; and have well-lighted and maintained parking lots. Most interiors and exteriors are basically vanilla, so you can ad your dash of color as you plan your interior decor and displays.

The location of the strip center is crucial.

Major intersections on busy thoroughfares have exposure to the greatest number of passersby. A good flashy sign can help call attention to your business. For advertising purposes, you need an address that is easy to find. Avoid little-known cross streets. Customers appreciate convenient parking and easy access from the street into your parking lot, and, upon leaving, easy access back onto the main street.

The overall character of a strip center is also an important factor. Positioning your store next to other successful stores that sell goods such as furniture, lighting or decorative accessories is apt to draw more traffic than a center that offers only services such as barber shops, insurance agencies and convenience stores.

7. Freestanding Building. Found all over town, these come in all shapes and sizes and can offer unique opportunities for a new business. Chances are the landlord will be a local resident instead of a large leasing company. Many times an older businessman will close down the family trade, but wish to keep the real estate as an investment. He doesn't want an empty building, so he considers renting out to a new business. This type of person will probably be supportive of your venture, and fairly easy to deal with on lease negotiations and improvements.

  Other distinct advantages of a freestanding building are:

a. A reserved parking lot just for your customers.

b. No association fees or common space maintenance agreements.

c. Your store is separated from competition.

d. The building exterior or lot may have great exposure for a large sign.

e. The shoppers who enter your store are very likely to purchase because they were interested enough to drive to your location.

f. A unique business identity will be easier to establish because you're separate from the congestion of malls or strip centers.

g. A private landlord may allow all sorts of creative decorating or structural changes that leasing companies would not approve.

h. The rent may be very negotiable. Some landlords are concerned about the quality of the tenant and the care of the property far more than the amount of money received monthly.

To be a value, a freestanding building must be on a well known street in town, or on a major roadway outside of town that carries heavy traffic from other towns.

 (Stores outside the city limits are sometimes referred to as highway stores.)

8. Highway Stores. The advent of major freeways has unfortunately knocked out some of the most interesting roadside enterprises, but some opportunity still exists on frontage roads or on highways that still have roadside access. If you should be tempted to set up in such an operation, nearby billboards are the most effective way to get people to stop and shop. The most appropriate atmosphere for this type of business is to appear to be an old-time trading post. Customers will feel comfortable in a relaxed down-home type of setting. Antiques and ranch collectibles sell extremely well and merchandise can be presented in such a way the customer feels he got a real bargain, or at least an honest deal.

Good old country hospitality is a key element in this type of marketing.

The nature of the traffic passing in front of a highway store is very important. Be sure that the passersby have potential. Routes that get interstate travelers will provide better traffic than roads only catering to locals within a small radius.

9. The Old Gas Station. Nearly every town has at least one closed gas station that hasn't been converted to another business. If it is still at a major intersection with traffic appropriate to your enterprise, check out the possibility of setting up shop there. As we already discussed in the section on freestanding buildings, it is likely this type of location is being retained by the owner for real estate "land value" only. The owner might be happy to have the property looked after for the remaining years until a decision is made to redevelop.

One advantage of an old gas station building is that the overhead doors can be raised in nice weather to create an open-air market atmosphere. You can get away with some outrageous advertising by having merchandise outside. In fact, being outright gaudy with signs and banners can really help draw people in.

Who are the customers for a "Southwest" store or trading post?

The following groups of people have proven to be good prospects:

 College students decorating their dormitory

 College students decorating their dormitory room

 Young professionals furnishing their first apartment

 Young couples furnishing a home or apartment

 Secretaries buying office decoration

 Executives decorating corporate suites

 Middle class families who live nearby

 Middle class families on vacation

 Professionals who live nearby

 Professionals in town for a seminar

 Any attendee of an organized convention

 Upper middle class couples traveling for business or pleasure

 Upper middle class families decorating a home

 Locals who make an event of family shopping

 People from surrounding communities who make a special trip to your town for shopping, dining or entertainment

 Travelers searching out local color and unique shops

 Collectors who have a special interest in specialized items

 Anyone needing a nice gift for wedding, birthday, etc.

 People just passing by who were attracted by the front of your store or something in the window.

The most sought-after location for a Southwest store or trading post would be one that has the strongest potential for drawing people from all the above categories and more. You need the widest selection of merchandise that will appeal to the greatest number of people in a location that is convenient for all to get to.

Knowing your market potential is very important

Most business manuals recommend costly surveys and market research by high-paid consultants but this is not necessary if you use your eyes, ears and brain. There are dozens of ways to collect highly relevant data for free.

Consult your chamber of commerce for population statistics, income levels, hotel occupancy rates, seasonal trends and hundreds of other interesting facts and figures. It would also be wise to find out the readership and number of paid subscriptions to local and regional newspapers. This will come in handy for planning your advertising and marketing strategy.

f you're not aware of areas of future development and expansion, call the city zoning and planning department. They know well in advance where future business and residential building will take place.

The state highway department often has statistics on the number of cars traveling major roadways. They may even know the daily traffic on city streets and major intersections. This kind of information can be useful as you choose your location.

When you have narrowed down your field of potential sites for your business it might be useful to compare one against the other until one becomes the obvious winner. Use this chart to indicate the favorable characteristics of your top four choices.

 Good characteristics of locations

Has an attractive storefront

Has adequate parking

Has good security lighting

Easy access from major street

In a respectable part of town

Zoned correctly for retail

Has good roof

Good heating/cooling system

Surrounded by other successful stores

Has a known address—easy to find

Amiable (cooperative) landlord

Reasonable rent

Is in a high traffic area

Plumbing and electrical up to code

Has adequate display lighting

You'll have the opportunity to put up signs

Has long-term potential

Has a convenient shipping/ receiving door

Area attracts tourists and local~

Adequate square footage

Good window display in front

Not a high crime area

One criteria not to use in choosing a location is merely that it is close to where you live.

Choose the right business location and you will soon be able to afford an elegant townhouse or a country estate. Remember, it's your business that generates income, not your house. Put your business first, and it will later reward you royally. During the formative years of your business you may want to sell your current residence to opt for an apartment near your business. Some business locations even have an upstairs apartment or a residence in the back.

In our case, in the development of El Paso Saddleblanket, our most productive year ever was when we lived in a basement apartment under our rented warehouse. The money we saved and earned in that year allowed us to hire our first salesman. It turned out the salesman didn't cost us a penny because he helped increase our catalog sales 50%. Soon after, we purchased our first house. Always reward yourself for your hard work and smart decisions. Your store acts not only as your chosen environment, but as an important vehicle moving you toward your financial goals. Your decision on the right location for your business will speed you toward success.

Negotiating the lease

When that one final location emerges as your best choice, you need to negotiate a lease. An attorney can be very useful to help you sort out all the legal terminology and fine print on the contract. Make sure you fully understand the terms and conditions of the lease and all the monetary requirements up front, be they monthly or yearly,

Don't be intimidated by high pressure or "slick" leasing agents. There are many ways to negotiate changes in standard leases from the cost itself to every term listed. You may want your lawyer to totally rewrite the lease favoring your own terms, conditions and payments. Instead of agreeing to a long-term lease, you might consider a short-term lease with several options to renew. This is sometimes called a "step lease, meaning the rent is "stepped up" an agreed amount with the renewal of each option. The landlord becomes bound to honor the renewals, but you have the opportunity to bail out at the end of any option period. Even more protection for you is a "walk clause". If for any reason you choose to vacate the premises, you can officially terminate the lease by giving the landlord 30 or 60 days' notice. The price for including such a clause is usually an up-front deposit of your last two months' rent. This would be forfeited if you "walk" but it releases you from the full commitment of the lease.

Your attorney can give you more ideas on creative arrangements that work in our favor. Before you agree to anything ask pertinent questions such as:

Why did the last tenant leave?

How much will utilities and taxes cost?

Is the zoning correct for my type of business?

How many parking spaces are reserved for this store?

Is there an alarm system?

A fire alarm?

A sprinkler system?

What kind of maintenance will be provided?

If you're uncomfortable with any of the legal commitments, discuss them thoroughly with your attorney. Hopefully, a lease will be agreed upon that satisfies the needs of all parties involved.


Updated 2001
© 2001. El Paso Saddleblanket. All rights reserved
No part of this book may be reproduced without the written permission of
El Paso Saddleblanket Co.

Online? Click here to request our Free Full Color Printed Catalog