According to the Small Business Administration (SBA), about 50 percent of businesses fail during the first year of operation.
“Some people go into business on a wing and a prayer. They don’t really realize they need to have a main financial reserve for certain things,” said Dean Balsamini Sr., director of the Small Business Development Center at the College of Staten Island.
“It takes about a year to go through all the seasons to find out what the pluses and minuses are in a particular business,” he added.
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Reason #1: Bad Location
Johnpaul Perrone knows all too well how choosing a location for a business is important. He and his wife, Dana, opened Papa Perrone’s Rice Ball restaurant on St. Mark’s Place in St. George in February 2013. But they closed in April 2014.
“We thought the area was great. We figured the courthouse would be opening, but it was delayed. We knew the NY Wheel was coming, and we figured we’d get our catering in place,” said Perrone, noting before opening the restaurant the couple owned food trucks in Manhattan, which were very successful.
“People would say, ‘You’re all the way over here,’ referring to Stapleton. I would say Stapleton is ‘five minutes away’,” he recalled, noting a financier also backed out soon after opening.
Tracey Porpora | porpora@siadvance.com
Reason #2: It’s Not Easy
Most merchants who fail within the first few years admit that running a business isn’t as easy as they thought.
“Sometimes it turns out to be a lot harder than one might have thought when they open that door. And the excitement gets replaced by the reality,” said Potrikus.
“In retail, if you want to compete, you really have to be open seven days per week, and you need your location to be someplace that’s easy to drive to, or near public transit. If people can’t get to you or you don’t have a web presence, this could lead to a business failing. There are so many things to juggle today,” he added.
Janine Detore — sister of the late Mob Wives’ Angela “Big Ang” Raiola — opened “Bee Tween,” a clothing and accessory store for tweens, in August 2015 on Forest Avenue in West Brighton, only to close the store in less than a year.
Detore, who purchased the Country Mouse — also on Forest Avenue — eight years ago, said she didn’t realize how hard it would be to run both businesses.
Anthony DePrimo/Staten Island Advance
Reason #3: Lack of Research
Some experts say small businesses fail because of lack of research about the business.
“It depends on how wide open your eyes are when you open that business,” said Ted Potrikus, president and CEO of the Retail Council of New York State.
“What happens to a lot of small business owners is there’s some excitement at the beginning, then the bills start to come in, and the people aren’t coming to the door. And your Facebook page isn’t generating what you thought,” said Potrikus.
Reason #4: Online Competition
Studies show that between 75 percent and 79 percent of people nationwide shop online.
Thus, the convenience of shopping online — especially from retailers now offering free shipping with the promise of speedy delivery services — has hurt mom-and-pop shops across the country.
“You can do anything online and your price points are probably cheaper,” said Balsamini. “You can try on clothing or see an item locally in the brick and mortar store then purchase it online.”
AP Photo/Ted S. Warren
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Reason #5: No Parking
If you live on Staten Island you likely have a car, and you also know it’s hard to find a parking space for any destination that doesn’t have its own lot.
“There are some businesses for which people will walk a couple of blocks, but others if they can’t park, they won’t go. It depends on the business,” said Linda Baran, Staten Island Chamber of Commerce president & CEO)
Those businesses for which people are willing to scramble for parking are often service-oriented or high-demand businesses, she added.
Tracey Porpora | porpora@siadvance.com
Reason #6: Doesn’t Offer a Service
Dean Balsamini Sr., director of the Small Business Development Center at the College of Staten Island, said many Staten Islanders patronize local service businesses.
“With a high median income here on Staten Island, people can be — and are –selective with services. Personal service organizations are in demand,” he said.
Said Linda Baran, Staten Island Chamber of Commerce president: “Offering a service, like opening a hair salon, has more chance of success in certain cases.”
Reason #7: Offering Only a Niche Product
When Adriana Peri opened her own business, Peri’s Pearl Tea, at 23 years old, she felt she was destined for success.
Selling a niche product — bubble tea — Peri, now 25, felt she had created a unique business right in her home community of Tottenville.
In retrospect, Peri says offering varied products would have helped increase her clientele.
“There’s not enough traffic on the South Shore as there is on the North Shore, or there is by the (Staten Island) Mall,” said Peri, who chose to sell her business.
“I love the business, and I wish I could keep it open. We were making the money to pay the bills and the employees, and there was only a little bit left over for ourselves. But we needed the extra traffic and people to make a bigger profit each month to be able to stay open,” she added.
Courtesy of Adriana Peri
Reason #8: Too Many Regulations
Small business owners on Staten Island have complained about city and state regulations, such as the hike in minimum wage, for which they have to comply.
“You have the city, state and federal regulations, and you just throw your hands up and say, ‘It’s not worth it. It’s too hard,’ and you then go to work for somebody else,” said Ted Potrikus, president and CEO of the Retail Council of New York State.
Reason #9: Lack of Finances
Linda Baran, president of the Staten Island Chamber of Commerce, said many times new merchants just don’t understand the expense associated with running a business. “I think a lot of people don’t do their homework,” she said.
Tracey Porpora | porpora@siadvance.com
Reason #10: No Online Presence
While here are many online-only businesses, most brick and mortar retailers offer online shopping. In addition, using social media can help boost businesses’ online presence.
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