Chain Reaction

Are You Sure You Want to Do This?

Like the parents of six who think back to the years when it was possible to lavish unlimited love and time on the first child, chain owners often cherish sepia-tinted memories of their start-up days. When they had just one location, they could easily have close relationships with, and keep tabs on, every employee. Having more locations means sacrificing some of that closeness.

But as no parents of six would voluntarily send away five of their kids just to recapture memories, neither would Jim Petr, 36, consider closing 16 of his 17 Milwaukee PC retail stores in Wisconsin to go back to the good old days when he was personally assembling custom-built computer systems for buyers in his single store.

"One of the biggest advantages to growing is credibility," Petr says. "Once we started opening more stores, it seemed as if overnight, customers and suppliers started looking at us as an established player, not some little ma and pa shop. The first thing people used to ask was, `Will you be in business next year when my computer needs service?' They don't ask that anymore."

Although various forces may push an entrepreneur to grow a chain, the major one cited by those who have built them is that there's strength in numbers. Petr says he realized a single store in Milwaukee would never last against the national computer chains. "Growth was the only way we could survive," he says.

The growth of companies that become chains also boosts visibility and purchasing power with vendors. "There are companies I wasn't important to 12 years ago that I'm an important client for now," says Bryan Collier, 43, who, in 24 years, has expanded Gardner-Collier Jewelry, a family-owned jewelry store in Kirksville, Missouri, into a four-store chain. That leverage, of course, makes for the kind of quality and prices that retail customers notice.

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This article was originally published in the August 1999 print edition of Entrepreneur with the headline: Chain Reaction.

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