Part Two of a conversation between small business owners
Last week, we tried a new format with The Distance. We had the owners of Lively Athletics, a women’s apparel and running shoe store in Oak Park, Illinois, interview the owner of Starship, a long-time sandwich shop in the neighboring suburb of Forest Park. The first half of their conversation covered topics like growth, competition and burnout. In the second installment, which you can listen to below, they talk about social media, the dark side of couponing and what’s next for all of them.
WAILIN: Welcome to The Distance, a podcast about long-running businesses. We’re taking a break from our usual format and trying something new: a conversation between small business owners, one with decades of experience and another who’s starting out. Today, part two of a chat between Paul McKenna and sisters Anne Pezalla and Kate Pezalla Marlin. If you missed part one last week, be sure to go back and check it out. Paul is the owner of Starship, a 39-year-old sandwich shop in Forest Park, Illinois that’s expanded into catering and events. Anne and Kate are the owners of Lively Athletics, a women’s apparel and running shoe boutique that they opened two years ago in the neighboring village of Oak Park. Here’s Anne.
ANNE: Starship opened long before everyone had a smartphone and Internet at their fingertips. How have sites like Yelp and Facebook changed your business? As small business owners, we’re constantly told we need to be on Facebook, Instagram, Twitter and now there’s Periscope, Vine, Snapchat. How do you approach social media?
PAUL: We opened up probably about almost 10 years before we accepted credit cards, okay? Just to give you a focus of how freaky old we are. The thing with social media, it’s a certain learning process and always a work in progress. I think the scary part for a small business owner is that it’s changing so quickly, so fast. This is the first time I’ve heard of Periscope. We did quite a bit of Yelp work over the last year because Yelp is a restaurant-based review thing. In order to post on these sites, you need to take some of your personal time or your work time and do these kind of neat quips and those are great impressions and they’re free. But measuring is the key. Are you getting any return back on your time, which is money, and your energy in terms of what you’re doing on social media? I think that’s my key. So I finally hired what I would call somewhat of a PR guy, and his job is to just tell us what’s working and what’s effective.
KATE: Do you have any examples of some post or anything on social media that has worked really well for you?
PAUL: Yeah, you know, I have a perfect example. We just opened up an outdoor dining area in front of the restaurant, a little bump-out there by a fire hydrant. We put out some tables and planters. We went out there and there was a snowstorm in January. My partner and I went out there in t-shirts, sat on the patio with snow around us, but like we were having a few sandwiches and a glass of wine, and we put that on Facebook and I got so much response to that, so my point being that the quirkiness, they would call it guerrilla marketing. Where do you do something wacky, for instance, we sell rabbit stew over Easter and our quip is that we cook the Easter bunny. That gets a lot of mileage. That gets a lot of points.
KATE: So you mentioned Yelp and I think small business owners have like mixed feelings about Yelp. It can be like terrifying for some, a great tool for others. Overall, has the advent of Yelp been helpful for you? Do you get new customers from it? We worry so much about getting negative reviews because it, people do look at stores on there too.
PAUL: My feelings are very positive because I have very positive reviews. I have a couple negatives there, but they’re few and far between. People in general get it now, that there’s always gonna be some negative reviews. You know, Some people have bad days and you just can’t make them happy. I do think it’s one of those things that you have to respond to and reply to, be actively engaged. That’s another marketing tool, trying to keep the customer in somewhat of a family mentality. Like we do birthday clubs and you say thank you in general on a regular basis, I think that goes a long way.
KATE: How do you track things like with your birthday club? This is something we’ve been thinking about, like we just want to show more how much we love and appreciate our customers, and we specifically were talking about the idea of like sending out birthday cards.
PAUL: The birthday club is really just a wonderful way to capture email data, so that I can send out seasonal offers and weekly offers to my database, which I’m not sure the number that we’re at now, but in addition to that, we’ll do monthly raffles with the same purpose in mind of getting more emails. If they like your place, they’re happy to give you their email. You know when you go into Home Depot or something and it says, “Would you like your receipt emailed to you?” I don’t do that because I don’t want to give them my email, and I think people are a little more guarded with it now, but if they like you and they like your place, they’ll be happy to do it.
KATE: You just mentioned your raffle. We go back and forth about the effectiveness of coupons and giveaways and things of that nature. And um we know Starship doesn’t do coupons. Can you tell us a little bit about what you made that decision and why it works for you?
PAUL: Absolutely. Groupon. When they opened up, that was a craze. Everybody did Groupon and we did Groupon. And it was ridiculous. I mean, the way it worked back then was if I sold a $20 Groupon, Starship got five because the customer paid 10, Groupon took five and we got five. So it was an incredibly bad coupon. In general you’ve got restaurant.com, you’ve got Loonie Coupons. You’re inundated with people who are providing just services to get your name out there and basically give away your stuff. We did not want to be stigmatized as a coupon place. It’s very old-fashioned, I guess, but we try to provide value every day for what we offer. We believe in what we sell and we’re confident that we’re charging the right price so we don’t really feel the need to discount.
KATE: I think that makes a lot of sense. And our fear too is just the concept of maybe getting our customers spoiled, like if they get too used to discounts, it becomes very hard to pay for things full price. Yeah, like when the value is there in the product, like it’s a good product.
PAUL: And let me comment on what we really do in terms of advertising. We do probably a gift certificate a day to a nonprofit. There are probably over a thousand nonprofits registered in Oak Park and they’re constantly doing fundraisers, silent auctions, anything to make money because they’re on budgets. I was the president of the board of Village Players Theater on Madison Street for quite a while so I got the other side of it. So by giving away these gift certificates, what happens is: I can give you a $50 gift certificate but it doesn’t cost me $50, right? It just cost my food costs. That gift certificate then goes to the silent auction. Someone buys it. They invite 10 friends over to use it. I’m not sure how you would do that—a dance party in the studio or something, because otherwise you’re giving away a pair of gym shoes or something and they can’t like share those with their friends. In my case, food is fellowship. They can have a party and have 10 people over and they can all eat Starship and feel good about it and get to try my food.
ANNE: I want to say, you probably saw my sister Kate in a production of Bye Bye Birdie at Village Players? Kate is definitely the theater geek of the two of us. But I was really shocked when we opened, at how many donation requests we get. We actually have a file on the wall that’s just donation requests, and it—wow. Every day, someone asks and I go back and forth on the effectiveness of that because for us, it is just giving away apparel. But we have started moving towards like, we’ll donate a party where we’ll do a free yoga class and like a shopping experience for women. So I’m glad to hear that works for you because we’d love to support all these nonprofits, but it’s hard.
So what’s in the future for Starship restaurant? Do you have more locations planned, more catering, retirement?
PAUL: Retirement. Um, I’m 59 and I was planning on selling about a year ago and I got this great opportunity. Goldman Sachs did a program. They have a really cool program called the Goldman Sachs 10,000 small business initiative. It’s wonderful. It’s completely reinvigorated my business approach to everything and it’s got this growth thing on my mind. So in terms of where I’m going, I figure I’ve got about five years. In terms of where I want to go, I’d like to double the gross sales in the restaurant over the next um five years and then unload it and sell it to somebody. Maybe they’re a chain or something, but uh you know, somebody who wants to take it and can afford it, frankly, because I’m, you know, hoping to get as much money as I can out of it. No plans to pass it on to a relative or anything like that. You know, sometimes you’ll see somebody sell their business to their kid or whatever. I don’t have any plans to do that, so my my ambition is to double it through events. I told you we just got a liquor license, so we’re all positioned to do a nice fundraiser with bar and food. We’ve done the food for a long time. Hopefully, if we start picking up some bar jobs, we’ll uh get a significant increase there.
So um, we won’t get too personal but oh — Kate, do you have any children?
KATE: Not yet. I’m about five months pregnant, so very soon.
PAUL: Well that’s gonna change things for you quite considerably. I’m sure that little kid is going to be in a carseat behind the register at times. Good for you! Congratulations. The balance—what concerns me, I guess, when I look at you two and how you’re gonna do, number one I’d love to see you develop that um maybe that financial base in terms of owning your own property. I would love to see that. I think you could certainly balance the family, as long as the two of you —you know, I think that’s important to mention. I’m sure you have issues and there’s times when the two of you butt heads. At the end of the day, you have to kiss and make up and still be sisters. I think that’s really important. If this whole thing made you millions of dollars and you hated each other at the end of the process, then it’s not worth it. So my advice is to really keep that sister bond thing above and beyond what happens here and then after that, it should take care of itself. But it’s gonna be tricky, especially with new babies. That’s going to be very hard on Anne when you have the baby, and I’m sure you know this, but you know it’s coming. How old are your daughters?
ANNE: I have a seven-year-old daughter and a five-year-old son, and I get frustrated right now with the work life balance because it skews a little more towards life, like I have to leave Lively at around 2:45 every single day to pick my daughter up from school. We just don’t have enough money to pay for more day care, and so right now I’m not working at Lively nearly as much as I want, but maybe that’s good, maybe it keeps me a little more fresh when I am here, but it’s frustrating and really hard.
PAUL: When my kids were little, it was really a great babysitting mechanism because I could bring them into the store at five years old and say, “Okay, peel these potatoes.” And I could put a bag of 50 pounds of potatoes in front of them and they would look at me funny and they would start peeling. It was a playhouse for them. Then eventually as they were teenagers, they were able to work at the restaurant. They were 16 and they were waiting on customers, which I would encourage them to — they’ll get incredible business acumen from being exposed to what you two are doing. So that’s a wonderful training tool. So I would probably get them a little involved. Maybe you can convince them to run a little yoga class for kids. In Oak Park they would love that kind of thing, you know. I’m just kinda getting into, trying to tie the family thing so it doesn’t eat you up. Kate, you’re certainly going to appreciate Anne more when or understand the fact that she can’t be here as much once you have this little darling, so the fact that you’re partners is good. If you were doing it on your own, Anne, would you be able to do it? If it was just yours?
ANNE: There is no way I would be able to run Lively on my own. It’s so nice that I can leave and I know the store is in good hands every day at 2:45. Also, I really don’t have Kate’s eye for fashion and Kate makes fun of me. She’s like, this would be the black pants and gray t-shirt store if you were in charge of doing the buying, so there’s a couple senses I could never do this job.
PAUL: If it was the black pants and uh gray t-shirt shop, I would shop here more probably, but that’s going to be a trick. So I guess at the end of the day, you’re sisters first and that’s all I’d suggest there.
The Distance is produced by Shaun Hildner and me, Wailin Wong. Our illustrations are done by Nate Otto. Let us know what you think about the show at email@example.com or on Twitter at @distancemag, that’s @distancemag. As always, The Distance is a production of Basecamp, the app that helps small business owners stay in control of projects and reduce email clutter. Your first Basecamp is completely free forever. Try the brand new Basecamp Three for yourself at basecamp.com/thedistance.