One Family Business Owner's $10 Million Secret to Success
You've probably heard the statistics on family business survival rates: only 30% make it to the second generation and of those, a mere 12% will survive into the third generation. Mrs. G TV and Appliance, in Lawrenceville, NJ is in that rare category, an achievement even more impressive when you consider that the company is an industry that's been steamrolled by category killers like Lowe's and Home Depot. The company was started in 1935 by Abe and Beatrice Greenberg and is now owned by their granddaughter. So how does a small, local appliance store survive and grow to $10 million in revenue in that climate? I recently spoke to Mrs. G's third generation CEO, Debbie Schaeffer, who learned the business from her mother and grandmother. She shared five key ingredients in Mrs. G's secret sauce.
- Focus on relationships. "My grandfather was a very smart businessman," says Schaeffer, "but my grandmother was all about relationships. She loved her customers. If someone walked in and needed a refrigerator and couldn't afford it, she'd sit down and talk with them for half an hour about their family, and their job. And they'd walk out of the store with a refrigerator and she'd say, "pay $5 a week." Schaeffer says that relationship-based culture was passed down to her mother, an only child who grew up on the shop floor, and then to Schaeffer, who took over the business twelve years ago.
- Find a strategic advantage. In the mid-80s, when Lowe's and Home Depot opened five stores in Mrs. G's delivery area, the store suffered initially. "We responded by going high end," says Schaeffer. The store started carrying Sub-Zero, Viking, and other pricier brands without eliminating its core line of appliances. It's a strategy adopted by many small retailers who find it difficult to compete with the big boys on price. The solution: don't compete, differentiate.
- Make your company a community hub. Schaeffer has brought local celebrity chefs into her store for cooking demonstrations; she's hosted meetings of WIN, a local women's networking group; and in September, the store threw a 75th anniversary party with cooking and cleaning demonstrations, seminars on organizing, and $7,000 worth of giveaways The events bring potential customers into the store in the spirit of sharing information and entertaining, not selling. She also routinely donates products, like a blue ray DVD player, or even a refrigerator, to community auctions. "You never see Best Buy or Lowes doing that," she says. "I know that they're very charitable organizations in other ways, but it's giving to the community that's important."
- Join a buying group. Schaeffer belongs to a regional appliance buying group called the NECO Alliance, which leverages the combined buying power of independent businesses to get preferential pricing from manufacturers. The program helps Schaeffer be more competitive on pricing of the brands that are featured at larger stores. "They also have satellite warehouses so we get deliveries every day," she says. "So I'm able to do quick turnaround without the financial pressure of heavy inventory storage."
- Use social networking strategically. "People always ask me if I get sales from Twitter," says Schaeffer. "But that's really not the point." She follows companies and people in her industry to stay current on the technology and design issues that will help her educate customers. It was on Twitter, for instance, that she first learned about Whirlpool's Institute of Fabric Science, which offers advice on proper cleaning techniques for clothing. She reached out to the Institute, which sent a rep to do a demo at Mrs. G's 75th anniversary celebration. And it was on Twitter that I first met Schaeffer, when she responded to my tweet asking small business owners about their experience with Small Business Saturday.
How do you sustain and grow your own family business? Share your secret sauce with us!
Photo courtesy of Mrs.G's TV and Appliance