No, this photo was not taken in a trendy café. It is a Flooring America store where customers are treated to courtesy, respect and maybe a pastry or two.

Hundreds of full service retail floor covering stores provide their managers and employees with an excellent income, health insurance, retirement and other benefits while building substantial equity for their owners. Most successful dealers own their properties and their futures are assured. I have been invited to many $1 million-plus homes owned by these flooring retailers and have witnessed firsthand their success. Businesses with an earnings history are worth three to 15 times their most recent annual earnings, any equity plus 100 percent of the value of inventory, furnishings and fixtures.

In stark contrast, there are thousands of retailers barely breaking even and struggling to hold on to the business and employees. If they are lucky enough to stay afloat until retirement, their businesses typically have little or no real equity or earnings history. As such, there are nearly impossible to sell. Even more depressing, any tangible assets such as fixtures and inventory will probably bring no more than ten cents on the dollar. During the exact time they should be enjoying their life to the fullest; many dealers can't even afford to retire. Some will be forced to close the business. It's a grim picture. Dramatic proof comes when we do a mailing to retailers. Many are returned with a "no longer at this address" stamped on the envelope. How painful it must be just to open the doors every day under these conditions.

What is the difference between the few hundred successful retailers and the thousands barely making it? We study successful businesspeople in all industries and the more we study them the more it becomes apparent that even the extraordinarily successful entrepreneurs aren't much different than the rest of us. They are no smarter, more educated or better looking. In fact, an article in one business magazine stated, as a group, they are of average intelligence, average education (high school plus 1.2 years of college). Seldom does their physical appearance set them apart from the general population.

My experience has taught me that, yes, some work harder and some are more driven, but the most common reason for their success is their level of retail and personal skills. This is understandable when you think about how retailers learn the business. There are few if any institutions where you can truly study retailing. Family businesses usually aren't very helpful unless the previous generations have experienced success. More than likely the only things passed on are bad habits.

The emergence of retail groups have made an impact on the professionalism of the industry, but getting the members to make full use of the professional services offered can be like pulling teeth. Dealers who join a retail group generally are at a higher level than the non-aligned dealers, but many are still woefully lacking in critical skills. My frustration lies in the fact that our retailers absolutely make the choice whether to be successful or mediocre. I would place the skill level in this industry on a scale of one to 10 at a solid 1.5! The average flooring store generates just over a million dollars in annual sales and at a lowly 30 percent gross margin. More than a few stores have sales figures in the tens of millions and a few do over 100 million at considerably higher margins.

What are the factors that fuel retail success? Everyone has heard the old saying: "Location, location, location!" So, where is the best location for a retail store? As close to the "professional" retailers as possible. Many a sharp flooring dealer has opened a store near "The Depot" because they know the demographic studies have already been done. They may be near the competition but they know they are in an area that draws customers.

Location may attract customers, but when they come through the door, you need people with the skills to make them comfortable. You want them to make a purchasing decision "first time in." Incredibly, very few stores have regular in-store sales education. This is critical if you hope to compete with the big stores. Sales training in the average store is having the rookie tag along with a veteran at the store. This only perpetuates bad selling habits through the generations. In my stores we rarely hired people with flooring sales experience. It took too long to rid new hires of their bad habits.

The average home furnishings salesperson produces only about $400,000 in annual sales. Virtually no retailer knows how much it costs to bring a customer into their store. If they did, they wouldn't put up with such poor sales performance. The figure can range from $75 to $225 per customer. If retailers saw each customer as a cash investment, something would be done.

Most times, that $400,000 salesperson loses more customers than he gains. Ask any retailer what their closing ratio is and they will likely claim it is four out of five. This is pure fantasy. The real number is less than two out of five. Even so, with no legitimate way to track this crucial ratio, it remains unknown. A store without history is just spinning its wheels. You have to know where you've been before you can plan or strategize where you want to go.

My belief is most small retailers (in any industry) leave 90 percent of their potential on the table. This column doesn't have the space to provide a complete retail education, but a little expertise in just a few areas can produce wonders:

Sales Education: Nothing will produce a greater return than effective in-store sales education. I'd say fewer than 5 percent of flooring stores have regular sales education programs. Maybe $1 Million producers are common in successful stores with many salespeople producing several times that, but smaller retail stores keep salespeople on the floor who sell no more than $300,000 annually. To put the price issue to rest, generally stores with the highest sales sell at the highest margins while the stores with the lowest sales sell at the lowest margins. The same holds true with individual salespeople.

Buying: Retailers love to buy, but the only way to make money is to sell. Most retailers don't even understand the buying function and its relationship to advertising. Almost every small retailer believes he is a good buyer. The fact is: It's the activity where they are most lacking in expertise.

Advertising: Advertising should be planned at least six months in advance-preferably a year. Intelligent buying can't be accomplished without a complete advertising program. Advertising money should come without strings or co-op. The vast majority of retailers couldn't name one of the dozen or so proven consumer buying periods, nor can they identify the dog days when consumers never buy. The least qualified people to produce effective ads are the people selling the ad space and suppliers with a vested interest in promoting their brand. But who ends up making the ads? Ad sellers and suppliers. This is just a waste of funds.

Store hours and staffing: Retailers have to be open when consumers aren't working, but what are most common store hours? The exact hours consumers are working. A simple logic would enable retailers to open more hours with fewer people.

Motivation and management: Motivated employees are three to five times more productive than their non-motivated peers. But often motivation, leadership, vision, creativity and the attitudes of success play no sizeable role in the operations of the average retail store?

Service: One sales trainer actually advises retailers not to let customers abuse their employees. Small retailers often tell me they don't have to put up with difficult customers. It seems that Wal-Mart and The Depot with their billions can't afford to alienate even the most difficult customers, yet small retailers lacking two nickels to rub together feel they can? Whatever happened to "people skills"? Yet whenever I ask an audience of retailers what business they are in, the answer is always, "Service!" Wal-Mart isn't killing small retailers. Small retailers are killing themselves.

Merchandising: Customers tell us exactly how they want flooring products displayed and yet not even the retail groups show flooring in the proper manner. They do, however, departmentalize, have excellent signage, labeling, visible pricing while displaying professional literature and other POP materials. Store layout is crucial to having a showroom that sells, yet this is another industry shortcoming.

Prospecting, networking, professional training, community involvement, publicity, recruiting, follow-up, installation, hiring and retaining great employees-the list goes on and on. All are areas that small retailers disregard or at best, fall short.

Something that baffles educators and speakers is this: Retailers and salespeople who are the most successful are those who attend conventions, seminars, markets and meetings, fully participate in group services, read trade journals and invest in education. The more you know, the more you realize you don't know. Those who really need the knowledge-smaller retailers and less successful salespeople-almost never attend industry functions or invest in education. They must believe they know everything. What does it take to open their eyes?