Key idea #1: The Lightbulb. Use computers to streamline business functions.
You don't have to start a business from scratch. George spent so many years in big companies, he couldn't imagine trying to start a new business because it could take years to grow it to the point where he could benefit from scale. Not only did he look for an existing business to buy, he looked for a bargin and found one.

Q: What do you think? What are some of the advantages of size?

A: Purchasing power increases with size. You can negotiate the best pricing from vendors if you promise to buy in large volumes. Size can be an employee recruiting tool if you are known in the community as a good employer.

Any system you put in place can probably handle more capacity than a very small business could generate. The Art Store computer, for example, handles the point of sale inventory, cash managment, customer database and many other functions for all five stores. Adding another store will not increase the cost of computing significantly.

Some business experts believe when a company gets more than 100 employees it begins to be less efficient as a team and the gains achieved by size begin to diminish.

George was able to purchase The Art Store at a bargin price. Owned by a huge paint store chain, The Art Store had never been profitable. When George bought it, The Art Store had nine locations, all in California. After studying the numbers, George discovered that four of the nine locations were quite profitable and the other five were doing poorly. He sold the underachieving stores, invested all of his time and resources in the four good stores and began to make money.

The location of the store that you see on this videotape is actually his newest. Formally an owner-operated, this San Diego store is pulsing with new life and brings his store total to five.

Key idea #2: Dominate the market in 2 out of 3 categories: assortment, price, service.

Q: What example did George give of a retail store that is dominent in all 3 categories?

A: Home Depot. They have a huge assortment of products, low prices and excellent service.

Key idea #3: You can reinvent a business. George brought all of his merchandising experience to The Art Store and sales are on the upswing.

Q: What are the changes George has made since he became owner?

A: The stores have new floors, new ceilings, new lighting, wider aisles, new signage, point of sale inventory controls and a new approach to displaying products. For example, he is now hanging the paper in customer view rather than keeping it in drawers. By seeing all of the choices, the customer can more easily visualize how to use an assortment of special paper rather than simply look in the drawers to find what they intended to purchase.

Key idea #4: Not knowing about a specific business can be an advantage

Q: Why has George been so successful with a product line he never handled? What does George have in his business to make up for his lack of experience?

Possible Answer: Being naive -- a fresh set of eyes and an open attitude -- sometimes helps you solve problems in new ways. Also, in general the art supply business is behind other retail sectors in their application of technology and new business practices; George is able to introduce processes and practices which have proven to be successful in other retail environments and he often sees an immediate, enthusiastic response. George sees himself as the creator of a delivery system that bridges the gap between the manufacturer and the customer. With this vision, he could be selling any product.

Employees who are artists themselves know the art materials business. George is the generalist looking at the big picture while his people are the experts on the specific products. Here, the staff is taught to ask a question rather than simply give the customer what they ask for. The reason is customers might not know what products are available and The Art Store employees ask what the artist is trying to achieve then recommend products. This results in happy customers who go out with the right product; they achieve their desired result; they come back to shop again; and they often tell, and sometimes bring, their friends.

Q: We grow up learning the basic comparative analysis -- good, better, best -- but what is the best? Can anything ever be perfect?

A:Even though nothing is totally-and-in-every way perfect, we all still know it can can always be better. This is a subject near and dear to the heart of our executive producer, Bruce Camber. He has made a study of the physics and theology of perfected states for over 25 years. He found that throughout all of science and all religions, each in some manner shares the three conditions that define the continuum of perfection. This is what he has found:

• The most simple perfection is order; here there are continuity conditions.
• A higher perfection is defined by a relation and here that relation is experienced as a symmetry.
• A transformative perfection is within real time; it is a dynamic moment that is experienced as harmony.

Along that continuum, the possibilities approach infinity for higher or transformative perfections. Or as your Mom always said, "There is always room for improvement."

Key idea #5: Communicate with your customers and it will increase sales .
Before George bought The Art Store there was no use of direct mail. Today, with a database of 100,000 customers, George is frequently mailing to some segment of that list and to the general list nearly monthly.

Topic for discussion: What does segmenting mean?

A: Rather than mailing the same print piece to all 100,000 on the list, he will mail print pieces with more specific messages then only mail to those who are interested in those messages. For example, he'll develop a print piece about oil paint and offer a sale price on certain oil paints and only mail that piece to people who have purchased oil paints. The purpose is to improve the response to the mailing. Segmenting will increase the return on the investment required to do the mailing.

Key idea #6: No business sells a product.
George says he does not sell paint, paper, pens and ink. He sells self-expression, creativity, good feelings, relaxation, and pleasure.

Topic for discussion: Think about the last time you brought something, what were you buying?

Possible answers: Pleasure, comfort, contentment, convenience, safety, survival? If you buy an IBM computer, you are probably buying reliability.

Key idea #7: Only the people really matter . When George was asked to give advice to a person who wants to start a business, he said, "Find good employees, focus on your customers, and form strong relationship with your vendors."

Three separate pieces of advice; they all are about people.