Stupid Business Decisions

[DrFaroohk]

I'm by no means an extremely business saavy person, however, it seems to me like people in my area are just trying their hardest to fail.

Why do I say this? Because there's way too many failing businesses! And it's all for stupid reasons. Like, oh boy, there's only 6 restaurants on this street, I'm going to open another! And I'm going to serve the exact same food as the other restaurants, but I'm gonna charge 15% more for the food! OH YEAH!

Or, hey, let's open up yet another vacant building to rent out to failing businesses! Better yet, let's keep it empty for as long as possible! The best way to make money on rental property is to keep it empty all the time!

Or, you can go for the whole shebang, and open up a shitty, poorly run, overdone business at a random off the wall location. Sure, 10 miles down this deadend road that no one lives on or ever drives on - that's a great place for a gas station!

[Nyoibo]

Better yet, let's keep it empty for as long as possible! The best way to make money on rental property is to keep it empty all the time!

Actually in certain circumstances it is.

[Greenday]

I never understand that about locating a business. Like building a new gas station on a highway when there are already two on each side on that one small strip of it. Or building a Burger King across from an established McDonalds with a Wendys down the street.

[HYHYBT]

Well, that depends. If the other gas stations or whatever are doing well, then that is a good location for that type of business. It also gets people used to going to that area when they want that. And if they are busy, people will see that and come to your place instead, perhaps liking it better. With food, there's also the fact that people will think "I want lunch" and head out to where there are a bunch of places to eat, not choosing one until they get there. Some of them will choose yours. Whereas none of them will choose yours if you're at the next exit, where nothing else is and therefore nobody gets off the highway unless that's their turn.

[BrenDAnn]

Competition can be good for business too--thus one company building close to its competitors. You see that a lot with Lowe's/Home Depot/Menard's, and the fast food chains as HYHYBT mentioned. That said, I agree with the OP in that certain business owners are not so savvy. A good example is when a grocery store in the town I shop in built a new store & moved, the old store got remodeled and made into a strip of stores instead. That strip sits empty right now. It never has had anything in it since the remodel. I fail to understand the point of it at all, really.

[blas87]

I'm a little baffled with some of the business layouts in the city I live in. Downtown is different, because that's "historic downtown", so it makes sense to have the mom and pop sandwich shops next to the coffee shops and the bakeries and whatnot. But in the bigger parts of the city, there's McDonalds and Wendy's right next door, two gas stations across the street from one another, one block has like five salons (some are big some are like Pro Cuts and Great Clips) and a giant sporting goods store, next to a gun shop and two pawn shops within a mile of each other.

[Canarr]

I never understand that about locating a business. Like building a new gas station on a highway when there are already two on each side on that one small strip of it.

My guess: it's cheaper.

In Germany, there are certain zoning restrictions on building a gas station. If you want to open one, you need to fill out certain forms and follow environmental restrictions. Unless, of course, there's already one there, and the owner of that place already took care of the bureaucratic necessities, then it's a lot easier.

[Boozy]

Why do I say this? Because there's way too many failing businesses! And it's all for stupid reasons. Like, oh boy, there's only 6 restaurants on this street, I'm going to open another! And I'm going to serve the exact same food as the other restaurants, but I'm gonna charge 15% more for the food! OH YEAH!

Lack of competitive pricing aside, there's a good reason why restaurants locate themselves beside other restaurants. Once everyone in a neighbourhood gets used to going to a certain area of the city to eat, it turns into an entertainment district of sorts.

People who wouldn't normally be aware of your restaurant are going to see it if its in the right district. And these are the people who you want to be aware of your restaurant, because they're probably the ones who eat our frequently.

The same thing happens with all other sorts of businesses too. Like, say, the hammock district.

[DrFaroohk]

So I do see the point of opening up a business near another business; I still don't get it if there's an overblown surplus of them.

And I think I mentioned before the price gouging. It's like an office supply store we used to have. Wondered why they never got any business. I think the owners got it in their heads that each sale had to pay for their entire business expenses by itself.

There's a brand new cigarette shop that just opened up in town, and I always thought dedicated cigarette stores would have better deals, but all their cigarettes are about 2 dollars more expensive! And I wonder WHY in the hell anyone would do this.

Well I see why, they want to make the most profit, but it seems to me that charging less money would make them sell more cigarettes. So like they could make 2 dollars profit on every pack, and sell 100 packs, or they could make 50 cents profit, but sell like 2,000 packs.

[the_std]

The same thing happens with all other sorts of businesses too. Like, say, the hammock district.

I see what you did there. Bahaha. Best episode ever.

[Tanasi]

In most places MickyD's is the first FF place to open. Soon thereafter you'll find a Wendy's, BK, etc. What they're doing is sponging off of MickyD's research. MD researches the heck out of an area before they'll open a store or allow one to open, the other know this an ride the coat-tails.
The real trick to being successful is getting a good spot with great egress.

[HYHYBT]

McDonald's isn't always right about that, of course, and traffic patterns change. I know a store that was only open three years, 1995-8. It was in a storefront in a busy outlet mall. Opened in late summer, did GREAT business through that first Christmas season, and then just died and nothing could bring it back.

(That was the one with a safe with a battery-powered electronic lock, where, because it took a special battery you couldn't just buy anywhere, someone had the bright idea to put the spare in the safe so it wouldn't get lost. Guess what happened next.)