Life and Times of Audionutz, pt.4!

And you guys thought I'd forgotten...sheesh!

Let's recap where we left off....part 3 explained the Audionutz biz plan and business creed, establishing credit accounts and opening orders for product, the strive to be "exclusive" in our products and service, and recaps my personal background and general overview of this industry.

OK, so we are doing shows at the shop, we are accumulating an inventory of product, more and more people are coming through the door, and so does the money. So as money was coming in, I was slowly continuing to reinvest in both inventory and supplies. The shop was also building a reputation with the vendors by making orders often, and paying the invoices when they became due. Soon it would become apparent that a bigger place with an actual showroom was the next step, but we will get to that in a minute...First we must discuss the old cliche "nice guys always take it in the shorts" and how Audionutz was/is/and probably will always be affected by my overall kindness.

All during this time, "Team Audionutz" is in full swing. Bobby and I were both competing in IASCA with the S10 and the Civic, and we were starting to acquire other members like Gimmick (aka Kenny) who has been down with me since sliced bread was introduced, and even customers turned friends/ teamates by virtue of their system being a full-blown custom creation of mine and me wanting to show said system off. Then we have those who were acquaintances in the competition circles who came to us for a complete system redesign in their competition cars. Well, here's where I was guilty of being my own worst enemy.
I began to let my pride take precedence over making smart business decisions simply because I wanted the world to see bad-ass installs coming out of the shop. I got so caught up with building, designing, planning and re-planning, testing, tweaking, etc the comp cars that I found myself not focussing on the daily operations. Recall that I am a perfectionist and, by virtue, Aquarians are "dreamers" who ponder thoughts relentlessly trying to satisfy their creative nature. I have been guilty of turning away work because of building my own or someone elses' competition vehicle on several occassions, and let me tell you folks, a small business lives and dies by word-of-mouth, and this probably wasn't the smartest thing to do.
Anyways, my car was one thing. Other competition cars were certainly another, especially the owners of a couple of them! Another one of my many character flaws is that I often think of others first and myself second. Anyone who knows me knows that the last team car (or truck) to be worked on is mine. I am constantly putting the wants and needs of others ahead of my own, and through no fault of theirs it always bites me in the ass. I gave and gave and gave of myself and began to see that this "giving" was not always a mutual relationship. I am not going to point out specific members of Team Nutz or sling mud, but let's just say it became apparent that some people I was associated with only cared about either their own wants/needs OR what was in it for them. Several of my traits were being exploited because 1) others were self-centered 2) others used the fact that I was a genuinely giving person for their advantage 3) they knew I had too much time and too much pride in both their systems and the competition scene to not want to continually improve said vehicles 4) they knew I would help them financially if they needed it, and this trickled over into nickle-and-diming the shop over install supplies, necessary tools, and equipment, thus taking advantage of me a little here and a little there 5) would make all kinds of excuses as to why, when it came time for MY install or maybe a customer's install, that they came late, had to leave early, or just didnt show up at all. So, because of my traits, the shop was starting down a path to the darkside and I did not like it one bit.
I have since become callous to those I deem to be "leeches" and have tried to halt any orders being placed or product being installed without payment in full up front. "If I can barely afford the install supplies for my own car, I'll be god damned if I am gonna buy you the supplies you need for your CONSTANT upgrading" became my motto, and it emotionally affected me that I found I could not give so much of myself to those I felt I had a bond with and expect the same in return. THis was a big learning experience, the likes of which I can't really expound on much more because it's personal and I dont "talk shit" about anyone...except the jews. (j/K!)

Then, there's my perpetual problem of not knowing what my talents are actually worth. At first, of course, you figure labor costs based on the entire job, and, in an attempt to get business in the door, you give the customer a great deal so he helps advertise for you and you get more of your "one-of-a-kind" custom work out on the streets for all of Ocala to see. Let's call this "low-balling" your labor. I am guilty as charged! Recall that I am a passionate AND compassionate person. I am guilty of whoring out my services in a attempt to work within a customer's budget to make absolutely sure they will leave happier than they ever expected to. THis is one reason why I have such a following of customers. It is also one reason why Audionutz has not made me rich. I have learned that you have to set prices and stick to them no matter if you are gonna loose the sale or not. Too many times I spent an entire day's time working for $50 or so in profit just to "help a guy out" or fix stuff for "friends". THis does not pay the bills, folks! OH BOY! That whole "FRIENDS" word brings my current train of thought off it's rails! Let's discuss the "friends" of a shop, shall we.

Once you work at a stereo shop, you begin to acquire a group of people we will refer to as "audio buddies". Some of your audio buddies are genuine enthusiasts who share your goals of local audio domination and/or show circuit reign. Some are guys you knew before the store opened, and come around to hang-out or "just watch" or whatever. Some begin as customers and you build a relationship with them that makes them more than just a customer. Some are guys you already knew who you've approached in a attempt to get business either by selling them something or offereing to fix their systems or whatever. Some will help you work on your stuff, some help you do the custom stuff, some help without wanting anyhting in return, some are there to learn, others to take advantage of you. THEY ARE THERE, trust me! It is so hard to treat all people as a customer subject to standardized pricing when you have a personal relationship with them (no, Bob, I dont mean like you have with Grochowski). I am guilty of what I call "pricing by acquaintance" on many occassions, and this ALSO is not the way a successful shop needs to be run.
More often than not, these "audio bros" want what you want---to build a bad-ass system. Well, guess what? Who will they look to when it is time to buy equipment? Will they go to Best Buy and pay full retail? No. Will they go to XYZ Car Stereo and buy from them? No, because it will be insulting to you, their friend, to do their install using product they bought from your competitor. The answer is, they will either get it online (the topic of an entire part of this saga later) or want to get the stuff from you. Barring the odd chance that they want, say and Alpine head unit and you carry only JVC and Pioneer, it's what is going to happen, count on it! THen you are faced witha tough decision- Do you
A) discount the stuff more than normal b/c either he knows what the dealer cost is on the stuff OR you feel like you should
B) set a pricing range based on a percentage above actual dealer cost for your employees (typically, it is cost plus 10% to cover shipping charges and put at least some $ in the register) and allow this "friend" to purchase at this pricing
C) Give him like 25% off or so since he is also gonna be paying for the labor on the install
D) make him pay your normal price, but cut your throat on the installation
E) set up a payament plan for him to pay over time

Gosh, there are so many more different scenarios I dont have tome to list them all but you get the picture. What I found myself doing is varying the discounts according to the persons' level of assistance at the shop or in general. If the guy was a true friend and would help me with anything in his power without needing something in return, then I felt he was entitled to be treated like an employee and subject to deep discounts. It varied, but most if not all the time I found myself selling products much cheaper than normal and making deals on the installs. I am sure most of you are saying" thats' what friends are for" or something like that. Wait until you find out just how many of these acquaintances make themselves known after you open a shop. THere are a LOT of them.
I hope we are all intelligent enough to realize I am not saying that these friends actively try to take advantage of you, b/c they do not. Most of them are actually a big help with various things (errands, stocking, assisting, etc.) and I feel are definitely entitled to some favoritism. But in terms of $ and operation costs and whatnot, you have got to have standardized pricing or all the guys coming out of the woodwork because they heard "Bubba can get me the hook-up on a CD player cuz he just opened a stereo shop" will eat your profits up and turn the transaction into a "break-even" when you figure out your overhead costs. Hell, you may even end up LOSING money when all the shop operational factors and costs are figured in. That is not how a business should be run. "Friends is Friends Business is Business" should be adhered to unless they are people you'd have over for dinner. THis is yet another aspect of improper business tactics I am guilty of...Damnit! Why do I have to be so nice!!!

Anyways, in part 5 we will get back to the chronicles and look at moving the store, the employees of the store, building the showroom, etc. I will also get some hard numbers in there and try to break down the costs of operation for us....MORE TO COME!