Running any small business is not easy, these days retail of any type competes against the internet, and other businesses face competition that narrows margins while costs go up. A couple of years ago a well known sheet music store in NYC (a business that thanks to the internet and digital download of music parts is dying as well) had the owner ready to retire and a young guy I got to know there was thinking of buying it. We came up with recommendations on how he could potentially do it, emphasize the service aspect of it with an internet presence, having a good inventory program that not only had in house but also could tell the person looking if they could get it and how fast they could get it...in the end he decided not to go ahead because it was just too tight margins for the costs involved.
Others have hit the nail on the head, to be in a LHS business requires a lot of elements, gonna list them just for the heck of it
-losing the attitude that you are somehow doing the customer a favor by being in business, and realizing customers are cultivated by actually treating them with respect, something a lot of small businesses have problems with IME, the 'nasty old men' at trains shows often are the 'nasty old men' running hobby shops
-Find ways to distinguish yourself, things like repair are obvious, or something like being able to track down items someone is looking for and having trouble finding it, finding it and ordering it for them as a service (with a fee if it doesn't involve wholesale ordering).
-Obvious one, answering customer's questions, knowing what you sell, and if you don't know, promise to ask people you know who do and get back to them. Yes, some people will do this and not shop at your shop, but you will soon figure out who they are and politely turn them away.
-Having stuff other people don't sell, especially things that might be available at other kinds of stores like big box stores. Trying to compete on price alone is a no winner, and trying to sell commonly found things at a higher price isn't going to work all that well.
-The store out there with things like sponsorships, maybe local clubs, activities, etc, it still works
-Internet presence that actually makes people want to shop at the store. While people are looking for things on the website, have banners announcing things like store events (let's say a workshop on basic wiring of a layout, or days with in store discounts)
-big one, convenience. It is all well and good to want to work regular hours, but for a brick and mortar store that is to be honest obnoxious. The hobby store open Monday to Friday 8-4 or 5 and 3 hours on Saturday quite honestly won't get my business, that is someone who either is relying on the independently wealthy, retirees or those unemployed, and it isn't a winning strategy. If you want to work 8 hours a day, open later and stay open later, 12-8 or 1-9 is better than 8 to 4. Likewise, weekends are when most people are off, so it is better to be closed Monday and be open Saturday and Sunday (or maybe be off Monday and Tuesday and open on the weekend). Friday nights are a good night to be open late, that guy working on his layout, the person who is into RC he needs fuel or something to repair a plane, may likely be thinking about that Friday.
-Location and area. If you live in a relatively less densely populate placed, a place with a population not likely to be into what you sell (for example, a snowboard shop in an area heavy with us older folks), it is a lot harder to get customers, on the other hand a hobby shop in an area that is older might do well.
-Store that doesn't come off as a private club. Someone else mentioned the hobby shop that seemed to exist as a club for the owner's buddies, a permanent coffee klatch, and that can turn off people coming in to shop, especially newbies asking for advice. I have gotten some great advice over the years from the guys hanging out there, but I also have seen plenty of people including myself get turned off when asking a basic question and seeing some idiots making you feel like an idiot for asking, or if you talk about something you are thinking of doing, the guys who make themselves feel better by putting any idea (not their own) as 'stupid'. One thing to say that may be difficult, won't work, another to make someone feel small.
It is up to the store owner to make sure this doesn't happen, and to be honest a bunch of guys hanging around by itself can turn people off,fair or unfair. Something on the show "Bar Rescue" comes to mind, he said that if a bar or restaurant had more than a few motorcycles parked outside it, that a lot of people would not go in, especially women. Might be fun to have your buddies around to kibitz with, but it can also be hurting your business in ways you don't realize.
Still a hard business, but when running a difficult business it is really shooting yourself in the foot by not being aware of every little thing that affects the business. Once upon a time LHS had a monopoly, they were literally the only place to go (or maybe places where more than 1 existed), back when catalog sales were not necessarily discount and certainly were not that convenient, and I think a lot of the existing businesses look back at that and sigh, when they could be open Monday to Friday 8-4, could do what they wanted, etc because they had a captive audience, rather than looking at today or tomorrow.
