Photos by Cathie Rowand | The Journal Gazette
Using the building – and sign – of a former Hollywood Video store saved Hollywood Beauty’s owner big on setup costs.
Beautiful opportunities
Entrepreneurs save by taking over vacant buildings suited to them
Paul Wyche | The Journal Gazette
A sluggish economy has some companies turning to turnkey locations.
When Grand Rapids, Mich., businessman James Jung scouted locations in Fort Wayne, he settled on a high-traffic intersection at East Rudisill Boulevard and Calhoun Street.
The building he decided to lease is a former Hollywood Video, which saved him money on, among other things, signage. That’s because his operation is called Hollywood Beauty.
“That was just a coincidence,” chuckled Jung, who has seven Hollywood Beauty supply stores in western Michigan and opened his Fort Wayne site about four months ago. “Ironically, it was just a great location.”
So, motorists driving by Jung’s establishment might mistake it for the former video store – especially since the “Hollywood” part of the marquee remains. Inside the hair and beauty outlet, other remnants include a mock Walk of Fame.
Jung doesn’t mind the leftovers, though. He’s saving money. Jung said he spent between $100,000 to $120,000 on merchandise and related goods. But he had no new-building costs, which could have easily doubled his expenses, Jung said.
Global Entrepreneurship Monitor, a research group in Wellesley, Mass., reported that the average cost to start a small business in the United States in 2009 was $175,000. But the cost could be considerably higher, depending on the type of business, location and related expenses, said William D. Bygrave, co-founder of Global Entrepreneurship, in an e-mail.
Jung only had to stock his store and put up a few removable walls, he said. “It was pretty much ready to go,” he said.
Another example of such a scenario is a human-services business for people with developmental problems housed at the former Keystone School on Homestead Road. The Fort Wayne Plan Commission last month approved rezoning so that L.I.F.E. Inc. could open its doors.
Officials of the center said their new building follows a sort of just-add-water formula. They too said they are saving thousands by occupying an existing structure.
Brad Sturges, a Fort Wayne commercial real estate agent, isn’t surprised by small-business owners reaping cost savings.
“There’s a lot of empty space, and that is resulting in lots of options out there,” said Sturges, a partner with CBRE Sturges.
“Landlords are aggressively pursuing tenants. Some may offer a year free with a five-year contract, while others may be willing to make improvements like adding more restrooms.”
Owners of restaurants particularly like turnkey situations, Sturges said.
“Hood systems (over deep fryers), walk-in coolers and other equipment like that are already attached to the building and makes it easy for another restaurant to move right in,” he said.
That was the case at Zesto Ice Cream parlor in Auburn. Owner Rex Carroll wanted to open a delicatessen, but a fragile economy made him hesitant to construct a building.
He instead decided to open Auburn Deli in the back of his ice cream shop a couple of weeks ago.
“In this economy, you’re just looking for ways to save money,” said Carroll, who founded Zesto in a former Maverick’s restaurant in 2002.
“Everybody is holding onto their money, but I wanted to do this, and co-branding works because it’s really tough out there right now.”