Sunday, July 11, 1999

ENTREPRENEURS


Doughnut shop rolls with punch

BY JOHN ECKBERG
The Cincinnati Enquirer

        The summer of 1997 was a nadir for morale and the balance sheet at the Ridge Donut Shop.

        Krispy Kreme Doughnuts, a national chain, had opened its doors in a suburban plaza between this Pleasant Ridge neighborhood shop and Interstate 71, and Tom Jimmar, manager of the Ridge Donut Shop, figured that sales were about to cool off faster than a fresh tray of creme-filled donuts.

        He was right.

        “For three months, it really put a dent in our sales,” he said. “It was a shock.”

        Shocks might stagger, but they do not always kill businesses. Sometimes, it makes them leaner, more flexible and more sensitive to needs of customers.

        “We had time to think about our response,” Mr. Jimmar said of that slow spell. Owners of the neighborhood shop on Woodford Drive in Pleasant Ridge, which employs eight, thought their quality alone would bring back wayward buyers.

        So they kept doing what they had been doing before the chain store arrived, and eventually, sales rebounded.

        “It was a short-term loss. I guess we figure we've lost about 3 percent of our customers for good,” Mr. Jimmar said. “We lost 3 percent when we started our no-smoking policy.”

        Jackie Kohorst, vice president of client services and public relations at Powers & Associates, a marketing and communications firm based downtown, said most battles between big and little companies do not have a happy ending.

        She has a couple of strategies:

        • Tell regular customers how much they are appreciated — and tell them immediately.

        “They're the people who are likely to be tempted to change,” she said. “Let them know that you understand they are going to check out the competition, but that if they want the same great service and product, to come back.”

        • Consider in-store promotions.

        “It's a great time to start a customer-appreciation event,” Ms. Kohorst said. “Talk about the neighborhood roots, or how the business is family owned, how it is unique to the neighborhood.”

        Ms. Kohorst has worked with large companies such as McDonald's Corp., Heinz Pet Products and Cincinnati Bell Inc., as well as small firms such as neighborhood dance studios and restaurants. Competition might mean it's time for housecleaning. “Look at doing things on the premises to spice up the environment,” she said.

        Now that the shop has weathered the competitive storm, the Ridge Donut Shop is facing another couple of challenges: the labor shortage and the weather.

        “Right here in this plaza, the help-wanted signs haven't come down on any store for the past four years,” Mr. Jimmar said. “Every store in the area is hurting for workers.”

        There is another bomb to the bottom line, but Mr. Jimmar cannot do much about it. Summer means swimsuits, and swimsuits lead to diets. Seasonal doughnut sales always dip in direct proportion to the number of trips to the swimming pool.

        “When Mom goes on a diet, families go on diets,” he said. “These next couple of weeks will be the low point for sales. It happens every year.”

        John Eckberg covers small-business news for the Enquirer. Have a small-business question, concern or quandary? E-mail him at jeckberg@enquirer.com, and he will find the expert with the answers.

       



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