I just read a new article in the Hungarian to English news that an increasing number of Hungarian businesses close within the first year. Can we all take a deep breathe in and go DUH!!! in unison, please? First of all, this is and has been an international business fact for as many years as I can remember and for things like this I have a good memory. Why should Hungary be any different? I will share why I think there is a major difference here in two words. Poor planning.
I have had successful businesses that have last from 3 to 16 years, so I do know something about business. Those that were at the lower end of the longevity scale were closed by my choosing, not because I went out of business for negative reasons. This is my primary observation of new businesses. They don’t scope out the area well enough before investing in opening the business.
For example and I have written this before, within 1 square block of our apartment, there were 7 florists and a few of them were large operations. Before you rent a retail space don’t you think you should at least ask yourself “What is the competition here?”, “Are these services needed?”, and “How much can I afford to invest in remodeling while still saving something for marketing?” I was very sad to see one of my favorite florists close up shop. They had the most beautiful and original window decorations, it was a pleasure to walk by, but they also drew me in to buy.
One street over from us, in one small space in the last five years, there has been an empty store, a fruit/vegetable store, a bike rental, computer store, discount shoe store (no shoes over 1,000 Huf), then a regular shoe store, and currently a cafe. The fact that there is a Turkish restaurant right next door, another restaurant 2 doors away, a Burger King four doors down on the corner, a pub on the other corner, a cafe right around the corner, and three restaurants right around the corner within the block, didn’t seem to deter them at all.
What makes me groan WHHHHHHAAAATTTTT? is when they rip out everything that was left by the previous tenant, including perfectly good tile or painted walls and spend weeks remodeling. They open for 5-8 months if their luck holds and then one day you see any empty store front once again. What a waste of money.
Doesn’t anyone know about demographics and marketing?