I spent last weekend exploring Nashville, Indiana. It’s a small town filled with great little restaurants and shops. As I wandered through boutiques, bookshops, and toy stores, I couldn’t help but wonder, “How do these places stay in business?”
Each was a large store with a huge inventory of merchandise. The overhead for such a storefront would have been expensive. These businesses would have to sell a lot to stay in business.
I did a little research to find out how these little shops stayed in business. Here’s what I learned.
- Many of these businesses are just expensive hobbies. They lose money every year, but the owners enjoy interacting with the customers.
- Some businesses exist on a few large sales or a busy tourist season to survive. The rest of the year, they sell virtually nothing.
- Other businesses have strong online sales that pays for a physical presence in a small town.
- A few people own the whole building and rent out most of it. This makes up for their unprofitable business.
- Some of my reading suggested that these businesses are covers for illegal activity. I guess that’s possible, but I have my doubts.
- One bike shop owner explained that he made most of his money making repairs, not selling bikes. Makes sense.
I still don’t understand the business model for most of these small stores. Without many customers or sales, how do they stay in business?
Waite for it... 