Securing Store Safety

Q: Our area is generally considered pretty safe, but last weekend a man walked into a neighboring store, brandished a weapon and demanded cash. All the merchants in the area are rattled, and we want to know how best to protect ourselves — and our employees — from this happening to us.

A: Retailers handle cash, so we should consider robbery a possibility even if one has never occurred in our area. Therefore, it's a good idea to periodically review all kinds of safety measures with employees, including what to do in case of a hold-up, even though hopefully you'll never need to put these guidelines to use.

The first thing to remember in case of a robbery, according to Madison, WI, police officer Marianne Thurber, is to cooperate and hand over whatever the robber wants — usually cash. Says Thurber: “Give him the money. The government prints more of it every day, but people are irreplaceable.” Also do your best to keep calm; don't make sudden movements or loud noises that might be upsetting.

The second rule is not to be taken hostage. Do whatever — including pretending to faint — to prevent the perpetrator from taking you with him. And once he's gone, lock the door to keep him from coming back (which may happen, especially if he sees police outside). Then call 9-1-1. If you can give a description, this will aid in apprehending the criminal. Thurber points out that taking note of the perpetrator's shoes can be especially helpful, since someone running away may shed a jacket or hat, but rarely his shoes.

It is, of course, best to prevent in any way you can becoming a victim of a crime. To do so, have extra personnel on-site during opening and closing times, when your business is most vulnerable. If possible, don't have anyone work alone. This is also good shoplifting protection, since professional shoplifters sometimes distract a single salesperson while accomplices grab valuable merchandise. And limit the amount of cash on hand — a big stack of large bills invites trouble.

Position your checkout area so that it's visible from the street. That way, a passerby may notice suspicious activity. A store with poor visibility, low customer traffic and a single employee on duty is an easy target for criminals. If your store isn't very busy, install a quiet bell or buzzer to indicate that someone has come through the door.

Give some thought to safety when you make a bank deposit as well. Vary the timing of your trips, and don't visibly carry a bank bag. Tell someone when you're leaving for the bank, and when you're due back.

Surveillance cameras may have some effect on deterring robberies, but they are especially useful in apprehending the criminal. Even if you suffer a loss, your efforts at prosecution can prevent the same person from traumatizing another retailer.

Q: I operate a small Italian home accessories import business via the Internet, and now I have the opportunity to buy an existing shop in our area to set up a real storefront. Is this is a good move? How do I determine a fair price for the business that I want to buy?

A: As an experienced Internet merchant, you already have a head start in operating a successful retail store. The main difference between the two types of selling is the scope of your marketplace. Since you're used to having the entire online world as your customer base, you'll need to do some research to determine whether there's an adequate market for your products in the area where you live. If you're close to a medium-sized or large city, or in a place with a healthy tourist trade, you may well find enough customers walk through the door to make your specialty business thrive.

Once you've decided that you definitely want to take on the day-to-day responsibilities of a storefront, you'll need to determine whether you're better off buying an existing shop, or looking for a vacant property. Ask yourself some questions. Is the store in a desirable location? If it is, what will the terms be for taking over the lease or buying the building? Does the store attract a clientele that would want to buy the products you sell on the Internet, plus whatever you decide to add? If so, you'll be able to take advantage of the goodwill that the existing business has built up. Goodwill is the one “fuzzy” feature included in the sale of a store, and can make a big difference in the amount you pay.

Goodwill is usually calculated based on the profitability of the business. Unfortunately, some stores don't keep accurate financial records, so profitability can be difficult to assess. Even if you see reliable accounting reports, remember that the profitability of a retail operation depends in part on the amount of salary taken by the owner. A high profit may reflect an owner who has been putting money back into the business rather than taking home much pay.

Usually, buying an existing shop also means taking over its inventory and store fittings. Will you have to buy much existing merchandise and fixtures that you won't be able to use? Changing the look of the store entirely may negate the benefits of the goodwill. The value of goodwill may also diminish if it is associated with the personal relationships of the previous owner, who will no longer be present.

If you decide that buying the existing business is better than renting a location on your own, I recommend that you contact a professional business broker to help negotiate a purchase price. Have your lawyer draw up a contract to transfer the store's assets — and be sure to include a non-compete clause that will prevent the seller from opening a similar business in your area until you're well established.