How One Small Business Made Money in Its First Year

(Editor's note: This is the final installment in our "Winning the Card Game" series. Dana Norman and Michele Rothberg acquired discount greeting card store Card$mart in June 2011. They agreed to let TheStreet follow them for one year as they experience the ups and downs of running a business. Based on advice from their accountant, the owners have declined to share revenue and profit figures.)

NEW YORK ( TheStreet) -- It's easy to assume that small businesses are beleaguered, but not all are having trouble. And while worries over the effects of higher taxes, federal-spending cuts and Obamacare are certainly no small potatoes, not every small business is expecting the worst in 2013.

Greeting card store Card$mart, located in Plainview, N.Y., is optimistic about the store's opportunities next year.

Since January 2012, "we have increased sales probably by 15%," co-owner Dana Norman says. And while Card$mart's year-end financials have not been tallied yet, she is confident the store made a profit.

Earlier this year, the partners were able to stop adding any of their own investments to the business and let growing sales take care of inventory and payroll, among other expenses, a huge relief, Norman says.

>>>Winning the Card Game: Month 1
>>>Winning the Card Game: Month 2
>>>Behind the Scenes at a Small Biz: March Means Mega Money
>>>Behind the Scenes at a Small Biz: In April, the Postman Rings

Card$mart licenses its name from Designer Greetings, which is also the vendor of the "50% off" line of cards the store sells. Yet the partners are not franchisees -- they do not pay franchise fees or royalties to Designer Greetings. Norman and co-owner Michele Rothberg are required to carry the Designer Greetings 50%-off card line, but can also sell other items and cards of their choice. Designer Greetings has declined to disclose how many independent retailers license the Card$mart name.

After struggling in November due to Hurricane Sandy, December was another good month. Preliminary sales rose between 10% and 20% over the prior December, Norman says.

"People like what they see and the reputation is changing. We really had a spectacular December," despite having an abundance of card inventory left over, she says.

"I prefer that, because it irked me when we didn't have enough" cards for last-minute customers, she adds.

This year they ordered a larger amount of card inventory, of which the leftovers they plan to keep for next year, while boxed cards will be on sale at significantly reduced prices.

Norman and Rothberg have been able to carve out a niche within the greeting-card industry. They have become known for their unique giftware and other non-card merchandise.

The pair is planning to keep that reputation. They have decided to attend The Atlanta Gift and Home Furnishings Market in January for the first time in hopes to meet new vendors and gain ideas on new merchandise.

Surfing the web for merchandise or finding unique merchandise locally is sometimes not enough. There's nothing more satisfying than when somebody comes back and wants to buy a second picture frame, either for their own enjoyment or as a gift, Norman says.

"That means what we're doing is working," she says.


>>>Behind the Scenes at a Small Biz: In May, A Record Sales Day
>>>Behind the Scenes at a Small Biz: June Profits From Thin Air
>>>Behind the Scenes at a Small Business: Summer Doldrums Not So Dull
>>> Bricks and Mortar Stores Thrive in Internet World
>>> Behind the Scenes of a Small Business: Lessons From Sandy

Attending a trade show is a big deal for the two between travel expenses as well as finding staff to fill in at the store while they are away, Norman says.

"You have to spend money on inventory," says Norman, noting that they decided to try a new trade show (and one that's not located in New York) to separate their store merchandise from other local competitors.

"We're looking forward to going to that show to get some new merchandise," she says.

"Our goal is always to have new products in," Norman says. "We don't sell the same the stuff as the drugstore. We're not the drugstore. We can't compete with the drugstore prices."

They also plan to continue to tailor merchandise toward the affluent Jewish families in their area.

"Ironically we sold much more Hanukkah business than last year," and in comparison to Christmas giftware, she says.

That said, the store's sales were also bumped up from holiday gifts for teachers. "We had the right price point and we wrap," Norman says. "People want to be catered to. Our customer base is growing."

One area that Norman admits she is struggling with is the relevance of social media.

Norman wonders if her clientele is looking for the store on social media and how the business could benefit from having several different accounts. "I'm still trying to figure that out," she says.

"I set up a Facebook ( FB) page, but I have been too busy to maintain it. I also set up an Instagram account. I just feel like social media takes a lot of time and I'm not as savvy as I would like to be on it," she says.

But she's putting it on her New Year's resolution list.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

>To submit a news tip, email: tips@thestreet.com.

RELATED STORIES:



Follow TheStreet on Twitter and become a fan on Facebook.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Personal Finance

Summer Travel: The Best Places to Visit in the U.S.

Summer Travel: The Best Places to Visit in the U.S.

9 Best Investment Books for Beginners

9 Best Investment Books for Beginners

How to Calculate Your Net Worth and Pin Down Your Financial Health

How to Calculate Your Net Worth and Pin Down Your Financial Health

The Best States for Millennials' Money and Health

The Best States for Millennials' Money and Health

U.S. Banks Urged to Make Small Loans In Competition With Payday Lenders

U.S. Banks Urged to Make Small Loans In Competition With Payday Lenders