Business Owner Story #39 – Village Runner

Business Owner Story #39 – Village Runner

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Mike Ward was a star track and cross country runner in high school and college. It was not a big surprise, therefore, when he got a part-time job at a local running store while attending high school. However, after two years working for the store, Mike surprised everyone – including himself – when he decided to buy the business in 1992 making running not only his avocation but his vocation as well. Twenty-two years later, Mike’s Village Runner store has expanded into three locations and is one of the most recognized chains for serious runners in Southern California and Nevada. Today the Village Runner has locations in Redondo Beach, Manhattan Beach and Henderson, Nevada. Selling everything from high tech shoes to apparel and accessories, Mike’s Village Runner employs 25 people and serves more than 4,000 hard-core runners who participate in runs from Boston to San Francisco.

The Start

How did you get started with your business?
I started working for the original owner while running cross-country for a local community college back in 1989. Everyday the woman who owned the business would come in and tell me “I hate this business.” So one day, I came in and said, “Hey, I’m interested in buying the business.” Two days later, she came in and told me she was ready to sell. I joke with people that in one day, I went from working for $6.00 an hour to being the owner and making $3.00 an hour!

How did you fund your business in the beginning?
When I had the chance to buy the business, I approached my brother and asked him if he would be interested in being my partner. So together, we borrowed the money from the bank and then two years later I was able to buy him out.

Running the Business

How did you learn to run your business?
I tell people that I was dumb enough to pull it off. When I bought the store, it really wasn’t a whole lot different than when I was working. The biggest thing for me, and I learned this from the former owner, was don’t get yourself in a credit situation where you can’t buy product from your suppliers. We put a lot of money back into the inventory, and then we’d spend a lot of time marketing and promoting the business. I didn’t worry about buying the nice cars or a house or anything. I just really focused on the business and making sure my creditors got paid. She taught me that, in retail, it’s the kiss of death if you can’t get inventory. If you get on a credit hold with your vendors, you’re done. I make sure my vendors get paid so I always get inventory. When I hire new employees and they have a really big day during the Christmas holidays, they’ll get all excited because they think they sold a lot. But I am always looking at the business on a year-over-year basis and I will tell them, “Hey we’re still 20 percent below where we were last year. Go sell more!!”

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What’s the smartest thing you did in the first year?
The smartest thing I did was to start the Fourth of July run. It’s been one of the best marketing tools I’ve ever stumbled upon. Now I have 2,000 people waiting to sign up on July 3, and probably 4,000 people standing in front of my store wearing my t-shirt. The idea came out of a Fourth of July run in Torrance, which is now defunct. When I proposed it to the city, they said, “OK, go for it.” That was more than 20 years ago. It drives people to the store. I’ll spend $10,000 promoting the event but I also promote my store, and the money comes back in the form of an entry fee. Plus I’ll dump some slow moving product during that time as well. It works really well. Now, my social media sites are really starting to work. We are up 20 percent over last year.

What was the biggest mistake you made in the first year?
Probably the biggest mistake was overbuying inventory. When you’re young, you’re excited to see money in the bank, but now I am always forecasting and know that whatever money I have is going to be reinvested into more inventory. I really made some big mistakes predicting my inventory. It’s always a teeter-totter trying to balance when you have too much inventory and not enough. The first year I just had too much and I ended up having to sell it at a discount. Even now, 22 years later it’s hard for me to predict my perfect balance of inventory. I will get a call from one of my employees who will tell me “Hey man, we just lost four sales because we don’t have enough inventory.” So it’s constantly a challenge. You don’t want too much inventory and then you don’t’ want too little. It’s regional, it’s seasonal and it’s always a moving target.

What’s the most rewarding thing about running your own business?
I just recently told my kids that when I bought this store 22 years ago, I bought my freedom. Early on I realized that I want to run my business and I don’t want my business doesn’t run me. I take the parts of the business that I like and I do that, but I don’t micromanage. I learned how to delegate. You don’t get into any business to be a slave to yourself. If I want to go on vacation, I will. I might have to shift stuff around, but I can go.

What’s the most challenging thing about running your own business?
Cash flow and competition are always the biggest challenge for me and probably for most retail stores. I believe that there are two things that will kill a business— lack of cash flow and competition. I love what I do, but it always seems like I’m paying down debt. The other thing is the projection process of the business cycle. It’s really hard to predict.

What business owner or entrepreneur do you admire most? Who is your role model?
There are two local businessmen who own businesses in the Village, Paul Hennessey who owns Hennessey’s Tavern and Ron Zaga who owns Liza Zs. These guys are really smart and I admire them because they have proven to be independent business owners and very successful. They are both multimillionaires. I really admire them. I talk to them over a beer sometimes and I get a lot of really good free advice. I love that.

What I’ve Learned

If you could go back to when you were starting your business, what advice would you give yourself?
Yes, I would have paid a lot closer attention to the buying and inventory. I also would have been more disciplined financially. When I opened my first store, I was always looking to buy another store. My Nevada store is a good example. I probably just should have kept one store, but I have this need to constantly expand. I think I would have changed that when I first started out.

What do you wish you had known before you had started your business?
I wish I had really studied the science of inventory projections. My first year I had like $30,000 in over inventory, and I ended up selling all the stuff at a discount. I wish I had really studied the inventory projection models of the retail business.

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About the Author — Lydia serves as Content Manager for Nav, which provides business owners with simple tools to build business credit and access to lending options based on their credit scores and needs.

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