...then I came across an intriguing listing: Family owned home video rentals business; near major North Wilmington intersection and shopping center. Partial owner financing available. Sellers very motivated. Call Business Brokers…
The ad intrigued me first of all because video rentals sounded like a fun business; secondly, I lived in North Wilmington so I tried to guess what business might this ad be describing—there were only so many major intersections, major shopping centers, and video stores in North Wilmington.
In actuality, there weren’t that many video stores around anywhere. Video rentals were a fairly new phenomenon. In 1985, the landscape was scattered with those courageous entrepreneurs who chose to jump in early to a fledgling home video industry. It was a niche business at this point because very few people owned VCR’s. This fascinating technology that enabled an individual to watch a movie whenever they wanted to in the privacy of their home, with total control to be able to pause the movie for snacks, a bathroom break, or whatever, had not caught on yet because VCR’s were very expensive. I had paid $650 for a VCR about a year prior; I was an ideal target consumer because I was typically an early adopter of gadgets, and I loved movies almost as much as I loved music.
I had been enthralled with the notion of owning a video store since they first started popping up in the previous couple of years. Home video reminded me a lot of record stores, which I had experience with from when I owned Serious Sounds jointly with Syd, and would enable me to satisfy both my tech leanings and enjoyment of movies. However, I lacked the start-up funds needed and besides, I allowed myself to get so caught up in the little bit of trappings of corporate success I was experiencing that I deferred my dream of entrepreneurship...
...by late 1985 the best video store locations were already taken and I was left to lament that it was a wave I had missed. The reality was that many of those early video storeowners had gotten in too soon. Now a couple of years in, some of those who jumped on the video store gold rush were already trying to get out. The market had not taken off like they had anticipated, and they were not capitalized enough to wait until the price of VCR’s was more in line with the compelling idea of being able to view anything, anytime in the privacy of home.
Though I missed out on the early wave, I was still very bullish on the home video business because I fully expected the price of VCR’s to descend to mass-market levels. The VCR I paid $650 for a year ago could now be had for half that, and I strongly believed that in the Christmas sales that were about to blanket the market, prices would come down a lot more. So, I felt the pioneers that were in the business already--and who were able to hold on during the the lean times of this fledgling industry--were well positioned to make a lot of money.
By process of elimination, I was able to quickly identify the likely candidate for the video store in the classified ad. To satisfy my curiosity I called Business Brokers and asked for the name of the business. While they would not voluntarily divulge who the business was I offered up a name and they confirmed it. It turns out that it was one of the several stores I already rented tapes from. Less than two miles from my house, the store was called Video Biz. It was owned by a married couple whom I would see from time-to-time when I stopped by the store although it generally was staffed by a couple of pleasant teenaged girls. The store was small but clean and bright, and was in a great location with ample parking, high traffic and good visibility. The gentleman from Business Brokers would not tell me the price, purchase terms, rent, or reason the owners were selling but indicated he would share all of that if I came in.
Initially I intended to visit the offices of Business Brokers only to satisfy my nosiness about the price, and maybe pick up some gossip about why a store I frequented was up for sale. I had no intention of trying to buy the business despite how appealing the notion of owning a video store had seemed to me a couple of years earlier. For one thing, whatever the price was I knew that I could not afford it; only a couple of years earlier Dorey and I had purchased our first house and that drained every available dollar we had. Besides, I had a career to get back to, and oh by the way, I was in a perpetual crappy mood and looked like walking death...
... I had an instinct, reinforced by things that I saw on television and read about in the newspaper, that VCR’s were about to arrive in American homes in a big way, beginning as soon as the upcoming holiday season. Entrepreneurs perceive or create an opportunity, and then marshal the resources to pursue it. I perceived an opportunity.
The reason I thought VCR’s might take off in holiday season 1985 is that, as with toys (remember Teddy Ruxpin), each holiday season there always seemed to be one item that is promoted vigorously and manages to capture the attention of the American public. Innovative consumer products that transition from niche, premium priced, to mass market as was the case previously with microwave ovens, stereo systems, color television, cordless phones, video game consoles. Was this going to be the year for VCR’s to become accessible to the masses? There were indications that it might be; of all the possible hot items I could not think of a better product to be this holiday season's must have.
My visit to Business Brokers marked the first time I was outside my house since returning to Wilmington, other than trips back to New York for medical appointments. It also was the first time I drove. I went to the meeting during the day while Dorey was at work. Driving for the first time since the operation felt awkward...
When I walked into the office of Business Brokers I noticed the double takes of the two gentlemen, Ray and Dennis that I was there to see as I strode in with my cane. I am sure I did not look like a prime candidate for a “people” business like a video store. In response to an inquiry from one of them, I said, “no, I was not in a car accident...” The next several weeks, I had a number of visits to Business Brokers, Video Biz, competing video stores, and conferred with an attorney...
...about a week and a half before Christmas, I stormed into the Business Brokers office (well, as fast as I could storm!) I had ditched the cane the day I returned to DuPont, and now was moving at close to full speed. Assuming my best corporate Type A persona, I jabbed in the air with my finger as I said to Ray and Dennis, “we have to close this fucking deal before Christmas or it is not going to happen.”
They were happy to hear that I was a committed buyer and encouraged me to make an offer, but they were perplexed about why I was so emphatic about closing before Christmas.
“Because after Christmas the owners are going to be making so much money that they will change their minds about wanting to sell,” I replied.
On December 22nd, I purchased Video Biz...
...the first sign that my hunch was correct, that my decision to buy the business was timely came Christmas morning even though the store was closed for the day. As on every Christmas, my parents (even though mom and Bunyan were long divorced), and some of my brothers were visiting us in Delaware. I drove them the five minutes to the store to proudly show off my new baby. Even before we got to the store I could tell that my parents were pleased and relieved that my spirits were up and that I was hopeful and happy about something. The last six months they had seen nothing but misery and mournfulness from me.
Once we arrived at the store, it is difficult to say what brought me more joy: seeing my baby again that I had just seen only hours earlier, or seeing the pride on everyone’s face as they toured the clean, brightly lit, well-organized store.
Perhaps too brightly lit. When you turned on the lights inside it also turned on a flashing marquee sign in the window. My family and I were inside for about a half-hour, and during that time, there was a non-stop procession of people who banged on the door, pleading for me to allow them to rent a video. I did not let anyone in, but thanked them for their patronage, and kindly asked them to come back the next day.
On the ride home I was all smiles--soaking up all the accolades and compliments from the passengers in the car, and musing about what Video Biz’s business was going to be like in the morning.
I was right. The home video business exploded just as I decided to jump in. We made more money in the week between Christmas and New Years 1985 than Video Biz had earned in any full month during the previous year that it had been open. On New Year Eve, we rented out practically every videotape that we stocked. (It was funny watching people jostle over documentaries.)
Dr. Paul Thornton is currently a university administrator. In the past he has been a professor, small business owner, and corporate executive.