BS: Music Store Yours-$100 & winning essay

Subject: Music Store Yours-$100 & winning essay
From: katlaughing
Date: 18 Mar 00 - 03:50 PM

Our paper just ran an article from the Boulder(Colorado) Daily Camera, which was originally published on Feb. 26th. I have not been able to find it on the Internet. When I do, I'll post more info. Anyway...

Seems Scott "Lucky" Chapple, in Nederland, owns a music shop called Lucky's Musical Emporium. The store's financial books have never had a day "in the red". He and his wife would like to move to Hawaii, so.....they are going to give it to the person who writes the winning essay, 100 words or less, addressing, "Why you think dreams can come true."

You have to send in $100 entry fee. If they don't get at least 2000 entries, everybody will get $90 of that refunded. The store has an entire worth of $100,000-150,000 including non-consigned merchandise, hours of bootlegged tapes, two weeks of training and six months' rent prepaid.

It says the store is part record store, clothing store, part smoking supply store, part African items bazaar.

The contest doesn't officially start until April 16th and entries will be accepted through Oct. 31st. They are hoping a nat. campaign with Internet and print adverts will attract at least 5,000 entrants. There will be at least 3 judges reading the essays watching for creativity, imagination, presentation, vision and the judges personal score.

THIS sounds as though it should be up some Mudcatter's alley!

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: Mary in Kentucky
Date: 18 Mar 00 - 04:19 PM

kat--keep me posted by personal mail. I have friends that are contemplating doing the same thing. I was/am a bit skeptical so am curious to know how this one turns out.

Mary

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: wysiwyg
Date: 18 Mar 00 - 04:49 PM

There was a movie about this approach on TV not long ago, it was about a restaurant though, a diner.

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: Gary T
Date: 18 Mar 00 - 09:49 PM

As I recall, a few years ago a local shop of some sort tried this type of thing. Not enough entries were received, refunds were made, and they moved on, to plan "B" I guess.

Although the dollar numbers make enough sense, I speculate that there aren't enough folks out there who want their own business (and of course that means that particular type of business in that particular location) to make this kind of plan fly. If it works, great. If it doesn't, don't be too surprised.

I thought the local deal included refunding the entire amount. I could see keeping a buck or two for postage, envelopes, etc., but $10 strikes me as steep. And do I gather right that the business as a whole is valued at up to 150k, but it's "no deal" if they don't get at least 200k? So either they get more than fair market value for the place or they make a small profit ($10 per entry minus expenses, which surely can't be $10 each) from folks accomodating them by going along with their plan. The overall idea sounds somewhat charming, but paying $10 for the privilege of having had a chance to almost certainly lose $100 while ensuring the owners make a killing on the "sale" rubs me the wrong way. I don't mean to rain on anyone's parade, but I've got to wonder--is there something wrong here, or am I missing something?

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: wysiwyg
Date: 18 Mar 00 - 09:55 PM

Well, as I recall this from the movie, the idea was that the place was worth more than anyone who "ought" to have it, and be a good steward of its traditions, would actually be able to pay. The idea was that the whole purchase price would be raised by the contest, and I don't recall that any of it was refunded. The seller needed the money-- it was never meant a a giveaway but rather a creative way of making a sale and catching free PR to widen the market.

But I think in that one the buy-in was much lower.

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: Gary T
Date: 18 Mar 00 - 10:16 PM

Just to clarify: The idea of someone poor but worthy getting a windfall--a running, profitable business for only $100--is fine. If the deal goes through, and all the other participants are out $100 for having had the chance to win, that's fine (it's also understood by all, as well as necessary for the current owner--definitely not a giveaway). The $100 ticket price is fine (might even be too low). Having a minimum number of entries in order for the deal to proceed is fine.

It's the $10 hit in the event of not enough entries that smells bad to me.

Subject: RE: BS: Music Store Yours-$100 & winning essay
From:
Date: 19 Mar 00 - 07:28 AM

Seems like someone offered to do the same thing, selling a home or store in Cape Breton. This was a year or so back. I don't think I ever heard what happened in that case. Will ask around. Interesting concept. Not likely to succeed in my eyes.

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: Bill in Alabama
Date: 19 Mar 00 - 10:22 AM

I recall having read about the owners of a profitable B&B doing the same thing, but I never heard how it ended. I figure it must have worked once or twice, or folks wouldn't keep doing it. The ten bucks not refunded doesn't bother me, as I assume there will be advertising costs. If folks are uneasy with the 90% refund, they don't have to participate.

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: Uncle_DaveO
Date: 19 Mar 00 - 12:06 PM

Remember, out of the $10 comes whatever small expenses like postage etc., which someone mentioned above, but the three judges. Assuming they are independent of the man and wife sellers, they need to be compensated for reading all those entries. And there may be other non-trivial expenses as well. I don't think the $10 is a ripoff of the public.

Dave Oesterreich

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: katlaughing
Date: 19 Mar 00 - 12:24 PM

Good points, all, BUT how about the vision?! This could become THE OFFICIAL MUDCAT OF THE WEST HQ!! Couldn't ya just see it...a bunch of 'Catters gathered round, doing a simulcast with Max on the East coast?

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: Gary T
Date: 19 Mar 00 - 02:27 PM

Well, maybe I'm the only one bothered by this $10 thing, but it still bothers me. Here's why:

IF the deal goes through, each participant is out $100, but for that $100 he got a CHANCE to win a business. Ya pays your money and takes your chances, that's cool.

But IF the deal does not go through, each participant has paid $10 for what? For eligibility to have gotten in the contest IF it had proceeded. With no contest, there was never any actual opportunity to gain anything.

Let's say 1,000 entries are received, coming in at a fairly steady pace over the 6 1/2 month period mentioned. That's $100,000 at the disposal of the owners, for an average of a little over 3 months. At a rate of 6% per annum, they stand to make $1,500 just on interest. And by keeping $10 from each entry, THEY MAKE $10,000 FOR NOT HAVING A CONTEST!

Now, we're told this business has a TOTAL worth of $100,000 to $150,00 (and I assume that really means total--assets, liabilities, goodwill, etc.). But the deal is off unless they get 2,000 entries, grossing at least $200,000 (sweet deal there). I have serious doubts they will get that many. By having what strikes me as a greedily high number of minimum entries required, they ensure that either they make a killing on the "sale", getting significantly more than they could on the open market, or they make thousands of dollars for offering, in effect, nothing. And the more artificially high that minimum number is, the more likely that they will never get enough entries to actually have a contest. I don't know these folks from Adam, and make no judgments as to their character, but can you think up a better scam? Set up a deal that garners $10 each from hundreds or thousands of folks in such a way that you're likely to have no commitment to do anything more than mail them a check for the unused 90% of their "entry" fee for a contest that doesn't happen?

No contest also means no judges, no contracts and lawyers, etc. The only significant expense could be advertising, depending upon how vigorously (and expensively) they promote it. While it might be reasonable for them to expect to cover promotional expenses, there's still the concern that the participants get nothing more than "the right to be allowed to enter", which would certainly be moot (and valueless) if there's no contest.

My view is largely colored by my impression that these types of deals generally fall through due to lack of enough entries. If the minimum were 1,000, or maybe even up to 1,500 @ $100 for this business, it wouldn't seem so bad. But how many people are there who will hear about this, and want to run their own business, in Boulder, dealing in musical instruments, etc., and are willing to gamble $100 on the strength of their essay? Not enough is my guess.

Now the vision of a Mudcast West HQ sounds cool, but keep in mind it still means running a business and living in Boulder. How many Mudcatters in Boulder? How many want to move there? How many have the skills to run a business of this size? Okay, just get 1,990 more entries and write a killer essay, and we got it.

Your friendly neighborhood curmudgeon and pessimist,
Gary T.

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: Mary in Kentucky
Date: 19 Mar 00 - 02:45 PM

Gary T.--Is there room in your neighborhood for another pessimist (me)? I'm curious about the advertising. Just how would you promote having to move to "somewhere" and run a business?

I may pass this on to my friends.

Mary

Subject: RE: BS: Music Store Yours-$100 & winning essay
From: katlaughing
Date: 19 Mar 00 - 03:12 PM

It is not in Boulder. It is in Nederland, a litle mountain town, higher up in the Colorado Rockies. Actually, last time I was there, a pretty cool little town. Colorado property is very desireable now, esp. mountain property within easy reach of skiing, etc.

They are going to advertise on the web and in print media, according to the article. I have no doubt that with all of the people, suckers included, who wish to live in Colorado, they will get the minimum number of entries. If one didn't want to risk it, I guess they could communicate with them, at the last minute & find out if they have close to enough entries, but then, everyone else may do that, too, and then there ya'd be..not enough entries, because nobody wanted to risk ten bucks at the least.

LEJ, where are you?? What do YOU think of this, living in and owning your own business in a small Colorado mountain town yerself?

BTW, not taking this too seriously, it is okay to have fun fantasizing about it, eh?