Replacement is not a strategy

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businesses come and go from the same spot

I’m always amazed by how one business closes and another one of an almost identical nature springs up in its place. Recently, another of the cafes near home closed. Strange thing is that the café that was there before them, on the same site, also closed. And the one before that.

Clearly this is not a good site. It’s right on a corner. There’s no parking. And most of the competition is about a block away, so there’s no clustering effect.

The closure itself is sad. The effects for those who had to close were probably huge. But what never fails to amaze me is how business owners believe they have what it takes to beat the odds without tilting the odds at all. There’s this extraordinary belief that, somehow, doing the same thing as the guy that just failed, is the recipe for success.

Of course there are a thousand reasons why a business can fail, especially in a sector as unforgiving as hospitality, but if it were me, very big flags of misgiving would have gone up about this site. Once is a mistake. Twice is a trend. After that, any decision to open here is  just plain dumb.

It’s not an isolated incident and it’s not one restricted to a small business. We can all think of examples where brand owners have ploughed on with an enterprise that really doesn’t have what it takes to succeed long-term, and they did it because someone offered them cheap gear or they thought they were better than the previous tenants, they were in love with owning a business at the expense of all other rational thought, the numbers somehow made  sense to them or they were waiting for the market to turn so that they could be there to cash in.

Denial is a powerful human emotion. People fill up sectors all the time with new enterprises that have no differentiating factor except the new owner’s unshakeable belief in their own infallability or luck. They create brands that look like every other brand. They do what everyone else does. And they continue to believe that they’ll be the one standing as others fall around them.

For me, there’s only one question that really needs to be asked and answered, and it’s as true for opening a small café as it is for the biggest brand launch or the most ambitious expansion: why will it work (this time)?

If nothing’s changed, there’s a good chance the outcome won’t either.

Photo of “Hello Good Buy” taken by Paul Wicks, sourced from Flickr

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