Small Business Thread

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SagerXX's picture
SagerXX
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Small Business Thread

Hey all --

I wanted to start a thread for people who own (or work at) a small business -- to share status reports, advice, coping strategies, etc.  As a small business owner (with my wife), we are and have been scrambling like mad to keep ahead of things as they develop and not only would it be useful to hear tell from other small business owners about how things are, what strategies they're using to deal with the downturn, and to commiserate over difficulties and so forth.  

I guess an ideal (first) post would be:  1.  describe your biz;  2.  give a status report on how you're going;  3.  dish any strategies or ideas you've been using to cope with the hard times; and 4. (if needed) solicit advice from other members of the CM community.

We'll see where this goes!

Viva -- Sager

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SagerXX
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Re: Small Business Thread

Righty-o, I'll go first:

1.  My wife and I own 2 Pilates & massage therapy studios, one in affluent Westchester county N of NYC, and one based in our home in Ulster County NY (1/2way from NYC to Albany).  

2.  Status:  we were booming (busier than we'd ever been) right up until end-of-year '08.  Then things began to waft down.  We went from about 65 sessions/week and are now in the mid-forties.  Break-even is 35, give or take.  So as I've posted previously, we still have meat'n'veggies but there's no gravy.  We're fortunate in that our business carries no inventory since we offer a service.  Our only overhead is rent, utilities and paychecks.  We're also fortunate in that clients pay in advance for 5 or 10-session packages (for Pilates) or as-they-go (for massage).  So we're not on a net-30 (which these days I bet is more like net-60) thing, and we don't have to chase clients for payment since they come to us between 1-3 times a week.

3.  Strategies:  our biggest action so far was to relocate our Ulster County studio from a storefront to our home, which cut our overhead by about 20%.  It's also increased my wife's quality of life as she works at that studio 3 days a week so there's no shuttling back and forth in the car and all her downtime is at home instead of at the studio space.  We have also added a new category of service on the Pilates end -- a "trio" session.  (We do not offer group classes, i.e., "Mat Pilates".)  We have in the past offered 1-on-1 (Private) sessions and 2-clients-1-instructor (Semi-Private) sessions.  So, the trio as you can guess is a 3-1 session with a price point that is competitive for those shy dollars.  (Price structure is 1-1=$85/hour, 2-1=$50/hour [per client], 3-1=$37.50/hour.)  We've found people are moving from privates into semis, and from semis into trios.  While in the short run that costs us money, we're finding that we can slot new clients into open slots in semi/trio sessions so if we can get the total number of sessions up we'll be better of on an earnings-per-hour basis.  A schedule with a lot of semis/trios in it is also more robust from the point of view that if you have a single client scheduled and they cancel you get nothing.  With a semi or trio, if one person cancels you still make some $.  

We've thought about lowering our prices or adding some kind of "recession buster" special but ultimately decided that we're just taking money off the table and raising rates down the road could be difficult/impossible.

So far our strategy seems okay.  Like I said above, we're still making it, just not as nicely as we were 9 months ago...

4.  Advice -- if anybody out there is in the high-end personal services biz, I'm all ears as to how you're doing and what steps you're taking in this economy.

Thanks in advance.

Viva -- Sager

nb:  edited for spelling errors

EndGamePlayer's picture
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Added Value Services

My first suggestion - Add Valuable Services to the list. . . expand!

things like - dietary consulting (See The Beautiful Truth for my rendition of diet needs) or group sessions for viewing the movie or even private viewing sessions to help answer questions. Encourage your present clients to bring a friend to hear about how they can make their life healthier (through your great services).

Enhance the idea of well being in every avenue possible . . Mini-Diet Groups, Back to Health Groups, . . Be all about the Mind, Body, Spirit wellness through food and activity and relaxation.

My thinking - many people are not going to these places any more because of luxury, they are going for their health in stressful times. The conventional medicine is making people sick with drugs and fear and barbaric practices. Be about Whole Health.

I just ran into a guy from NV who said he could help me build my business by getting rid of all my competition and cornering the market and that's what we are doing, but with you it's a "draw your clients in" more than the competition.  Still - find out what your differences are and exploit them so people know what you do exactly.

And you are not the only business seeing the cliff. every one I have talked to from people who sell advertizing to zebras is slower than they have been in years. . . and it could get slower before it gets better....

That's just my thoughts.

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Re: Small Business Thread

Sager,

Thanks for starting this thread.  I'm interested to see how others are dealing with the current environment, and I may be able to offer some advice.

Most of you may know me as Chris' technical adviser and the person responsible for this website.  My primary job is running a small business called the Shimshock Group.  The purpose of our business is fairly straightforward -- we help small to mid-size business owners achieve success.  I have 15+ years experience in professional consulting, and the services we offer range from sales and marketing strategies, to operations plans and website development.

The current economy has offered both challenges and benefits for us.  Some larger clients have scaled back, but on the flip side there are more people approaching me everyday wanting advice on how to start a business.  As I wrote in this blog post, in some ways now is the perfect time to consider an entrepreneurial venture.  I know many people who have had fantastic business ideas and never acted on them for one reason or another.  The current economic situation can serve as the spark they need to get started.  Maybe they have been laid off and at are a crossroads in their career.  Or maybe they want a greater sense of self-sufficiency.  Or maybe yet, they feel as though what they do for a living is not their true passion, and these chaotic times are bringing that to clarity.  Whatever the reason may be, I try to encourage people to take advantage of those moments in life for the positive.

Just like any other small business, our strategies for success are approached from multiple directions.  First, we offer an introductory business coaching service.  A prospective client can sign up for a complimentary one-hour coaching session, or can try one of our 4-hour, 8-hour or 24-hour packages at a reduced cost.  This is a one-time offer, and only available to those who have not worked with us previously.  Second, we have an electronic newsletter sent out to clients and prospects.  This helps them to keep us on their minds, and possibly forwarding our posts to others.  Third, I am occasionally giving presentations at small business forums and meetings to bring about greater awareness of our business and services.  There are other strategies that we use beyond this, but gives you an idea of how the approach is multi-faceted.

As for advice, I think it's very important that you do not lower your rates.  This can give the perception of being a "discount" provider, when really what you want to do is just the opposite.  You may want to take a cue from what we've done and offer a special introductory offer, where people can try your service at a discounted rate.  This allows people to experience what you have to offer without the normal expense.  One question I have for you is what is the profile of a typical customer?  You mentioned geographical location which provides some ideas, but really understanding your customer is one of the best things you can do to formulate a strategy.

Feel free to respond or send me a PM to discuss more.

Ron

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Re: Added Value Services

EndGamePlayer wrote:

My first suggestion - Add Valuable Services to the list. . . expand!

things like - dietary consulting (See The Beautiful Truth for my rendition of diet needs) or group sessions for viewing the movie or even private viewing sessions to help answer questions. Encourage your present clients to bring a friend to hear about how they can make their life healthier (through your great services).

Enhance the idea of well being in every avenue possible . . Mini-Diet Groups, Back to Health Groups, . . Be all about the Mind, Body, Spirit wellness through food and activity and relaxation.

Yes, agreed... the idea of making it more health-oriented rather than luxury is a possibility.  It really comes down to the customer profile, and their wants and desires.

Also while I do think there are probably some great opportunities for value-added services, this needs to be done with caution.  I have seen many times where it is easy for someone to get spread much too thin attempting to support too many options.  They key is to identify those opportunities which are going to have the biggest return on investment.

Ron

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Re: Small Business Thread

Wow - I'm looking forward to a consult.

We were doing six-figures in '07 and saw a big drop in sales last year but managed ok. This June is hitting our company hard now. When our internet company is under economic survival measures (and we have been there before) there are a few things we do different during jobless times and lower revenue. One is send out free articles of interest to places like magazines and newspapers to keep interest in our product going which I just started doing again. Another is try to find local people who want to do sales & installation.

And reading through my response above, sometimes I think I should follow my own advice and expand the products we offer but then I hit a mental wall. So . . I'm looking forward to the consult.  EGP

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Re: Small Business Thread

1. I'm a full time blacksmith  http://mtforge.com/

2. I've been in business for 12years, the last 6 full time and this has been my best year so far.  I'm having a hard time keeping up.

3. I sell retail (at reenactments, mail order, from our catalog, etc) and wholesale. I try to have 20% of each years sales be new items.

Mark

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Re: Added Value Services

EndGamePlayer wrote:

My first suggestion - Add Valuable Services to the list. . . expand!

Well, without obtaining a new (expensive and time-consuming) certification of some sort (buddy of mine did a Nutrition degree a while back), our product mix is going to stay where it is.  Adding retail items (supplements, etc.) has been tried previously and while it is a net money-maker, the amount of extra income was not sufficient to justify the time & effort required (probably 20% additional effort for 5% additional income -- and we already work upwards of 60 hours/week.  I already have a second job:  prepping for SHTF .).

EndGamePlayer wrote:

My thinking - many people are not going to these places any more because of luxury, they are going for their health in stressful times. The conventional medicine is making people sick with drugs and fear and barbaric practices. Be about Whole Health.

Oh absolutely:  18 months ago women would come in looking for "Bar Mitzvah Arms" (trans:  they want to wear a sleeveless dress to their best friend's son's Bar Mitzvah and their triceps are saggy/flappy and can we give them Madonna Muscles in 6 weeks?).  Now it's all about "My head is going to explode if I don't get my Pilates (or massage)!"  We do give general advice (with the additional advice to Consult Your Medical Professional where appropriate) vis-a-vis diet, insomnia, etc.  We steer folks to acupuncture, herbal remedies that work for us (Valerian for relaxation/sleep for instance) and so forth.  One client's daughter has had intestinal/elimination issues for 2 months and nobody (amongst literally dozens of doctor/hospital visits) had suggested colon hydrotherapy until we brought it up.  Egad!  The solution thus far has been to have the girl using the same stuff they give you before a colonoscopy.  

People definitely appreciate that we're knowledgeable about these topics -- and at the same time urge them to consult true experts as needed -- and ironically often take our advice more seriously because we're not making a buck off it (directly).  But to the extent they see it as a value-adding part of what we offer, then it does help at least to provide security to our existing inflows.

Thanks!

Viva -- Sager

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Re: Small Business Thread

Ron Shimshock wrote:

You may want to take a cue from what we've done and offer a special introductory offer, where people can try your service at a discounted rate.  This allows people to experience what you have to offer without the normal expense. 

Oh, fer sure:  we offer an introductory package of 3 private sessions at about 40% off, so they can check us out w/out making a big financial commitment.

Ron Shimshock wrote:
One question I have for you is what is the profile of a typical customer?  You mentioned geographical location which provides some ideas, but really understanding your customer is one of the best things you can do to formulate a strategy.

Typical customer is a 35-60 year old woman, college-educated, married (or divorced) w/children with one of three goals:  stay in the best shape possible, get back into the best shape possible (w/a companion goal of weight loss etc.), or addressing some physical issue (back pain/spinal issues [bulging or herniated discs etc.], poor posture, shoulder/neck issues, osteopenia/porosis, bad hips/bad knees, or general decrepitude).

We have done advertising of various sorts in the past and have spent thousands of bucks to develop basically no new clients.  Word of mouth (clients who refer a new client get 20% off their next package) and "I saw your sign" are pretty much the ways we get new people.  (We also donate 3-session packages to charity auctions, etc., and have had some success with that.)

Thanks for your input!

Viva -- Sager

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Re: Small Business Thread

EndGamePlayer wrote:

When our internet company is under economic survival measures (and we have been there before) there are a few things we do different during jobless times and lower revenue. One is send out free articles of interest to places like magazines and newspapers to keep interest in our product going which I just started doing again. Another is try to find local people who want to do sales & installation. 

We're collecting client e-mail addies and will soon be sending a monthly "newsletter" with exercises/stretches o'the month, diet/wellness tips, recipes, product recommendations (or warnings!) and so forth.  The hope is that aside from making people appreciate us even more, clients will forward our newsletters to friends.  As I said above word of mouth is our best friend, new-biz-wise, so we can extend the word-of-mouth to e-mail and perhaps prosper that way.

Viva -- Sager

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Small Biz Check In

Hey all --

For the small business owners/independent contractors/consultants/small biz employees out there, I thought I'd bump this thread up and do a check in on where our business world is at.

I'd love to hear back from people who own/run small businesses to see how the late June-to-mid-August period has been for you -- a just-the-facts check-in to judge for myself what the climate's like for small bizzes near and far.

We're about to go away on vacay, and since we'll have vast hours of free time, I expect -- in addition to time at the beach, time reading, daily siesta (I love me some siesta...) -- to spend some of them prepping our e-mail newsletter (which debuts Labor Day week).  I'll be culling interesting fitness news bits/diet & nutrition tips/how-tos and so forth.  I figure I have enough material to put a couple hundred of them aside so they're ready to decant (maybe a half-dozen a month) into the newsletter.  My wife & I will also be entering everybody's e-mail into a list, toying with the format and so forth.

The 2nd half of the summer has been brutal.  We've cut costs about as far as we can (only step left is to dismiss those who work for us and do those sessions ourselves -- but unlike most businesses, we actually care about our peeps and letting them go is the *last* cost-cutting measure) and so we've been treading water (juuuust barely breaking even) for the last 6-8 weeks or so and will be making a big push come Labor Day.  

(Mid-Sept. is traditionally a big "get new clients" month for us [in the Pilates biz] -- Moms get their kids off to school and then say 'Hey, it's time I finally [got in shape / addressed my posture / relieved my back pain / {insert other reason here}]...)

At our peak about 9 months ago, we were doing about 50 sessions a week.  Now were in the 30-35 range.  30 is break-even under current conditions.  Sweating bullets each week to break even (in a business that's about to have its 5-year anniversary) is not my idea of rock'n'roll.  If we're at 40 per week, all's well, so our goal will be to add 10-15 seshes between Labor Day and Halloween.

Don't even get me started on what could happen if there's a swine flu lockdown.  

That's us.  I've been toying with ideas such as monthly All-You-Can-Pilates-for-X-Dollars (as opposed to the current per-session fee structure), letting our subcontractors go, and trying to break our lease (and find cheaper digs in this depressed real estate market), but right now they all for various reasons rub me the wrong way.

Thanks for reading -- I'd dig hearing what other folks have to say about their situations.

Viva -- Sager

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Re: Small Business Thread

Hiya Sager;

With my husband's contracting business, things have been steady, though not without periodic adjustments in his business model over the past couple of years.  Two + years ago, it was all residential building . . .  He made the transition to remodelling (and a little commercial) about 1.75 years ago, and that has hummed along nicely . . . He's accumulated a number of sources of steady jobs, that are happy with his work, and loyal to him.  Occasionally, to fill in the gaps, he's done atypical work, using the skills and equipment that he's acquired, such as landscape construction and demolition.  He keeps no full time employees, and subs whatever he can't do himself within the allotted time frame.  All-in-all, he's had to be more flexible, and our income is down a bit, but there hasn't [yet] been a serious threat to our steady cash flow. 

Oddly, one of the projects that he's got in the pipeline is building a strip mall.  (Go figger!)  Needless to say, the contract will have biweekly payouts, or "no go".  The same goes for a 13,000 sq ft mansion on prime land that's also in his pipeline . . . Since it's a private party, rather than bank payouts, the client will have to agree to biweekly payouts.  In other words, we're not working as far out ahead of payday as we used to.  Likewise for materials . . . Clients are paying for those up front, with rare exceptions for trusted, long time clients.

I don't know whether this gives you any of the sort of information you were looking for, but there it is  . . .

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Let's check in on Small Biz

Hey all --

I started this thread about a year ago as a way of taking the temperature of any small business owners here at CM.  I figured it would be worthwhile to hear from people about what the economic climate is for small businesses across the country/world.

So --

My wife & I run two small Pilates/massage therapy studios.  One is in affluent Westchester County just N of NYC.  The other's near our home in New Paltz, NY (about 100 mi N of NYC). 

All last Fall and into late Winter biz was *brutal*.  We were hanging in there but each month was a fight.  Along about March/April things perked up a good bit.  Gross receipts popped up about 20% or so.  We had our usual Summer dropoff (when many clients go away for extended periods of time -- sure, it's nice to have wealthy people as clients in a downturn, but the rub is that -- in addition to being able to afford your services, they are also still able to afford plenty of vacation time), but we're still doing better than we were a year ago. 

September is traditionally a time when our biz picks back up a good bit.  Everybody's back from vacay, and we get new clients in mid/late September (it's a time when people say, "Okay, kids back in school, now I'm going to doing something for myself and get in shape", etc.).  We're about to bump our rates up (we do that every 2 years to keep up with cost increases).  I certainly hope folks can handle that -- and I certainly hope we'll see a little bump up in # of clients, too.

I'd appreciate hearing from other small business owners about what you've been experiencing in the last 3-6-12 months.

Viva -- Sager

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Re: Small Business Thread

Hi Sager,

glad you bumped this up ... I have a hard time keeping up with stuff unless it's on the first page ... my loss, but it's all the time I have.

We own a small business in Southern California - dh refinishes furniture. The past 3 months have been very busy - we have work again for an independent contractor who assists dh. A year ago that was not the case.

Our work is usually 50/50 commercial/residential. What is interesting about this upswing is that it's probably 90% commercial work. This means furniture that's been damaged during delivery to businesses or upgrades in buildings (doors, walls, staircases, etc.) The residential work (that is not coming in) are things like kitchen cabinet or front door refinishing.

All our work is word of mouth and since we've been around for almost 20 years, our client base is pretty loyal. However, one could consider this a "luxury" service. If times are tough you just live with the scratches in your dining table or kitchen cabinets. Commercial clients still need to keep *their* customers happy, so as long as they are selling and delivering furniture, we will have some work there. But when they slow down (which happened to the point of almost no work for several months last year) we are out of luck. 

About the only thing we can think of to expand is to use dh's specialty to make furniture look beautiful. He recently found some pieces that had been put on the curb because they were broken. With a little sweat equity and materials we already had, we are the proud owners of a fancy accent chair, secretary desk and a round table that dh had fun with and turned into a high end chess board. Something like this would easily sell for $2,000 in the right storefront. The problem is we don't own a storefront and don't know much about retail sales. The other problem is space - we have literally none so we have to get rid of what he's repaired before he can bring in new stuff to work on. 

At any rate,  we are in a busy period, but since I immerse myself in (what my kids call) we'reallscrewed.com sites, I keep alert for signs that current customers with outstanding invoices are having difficulties. Unlike you, we are not paid in advance and some clients take 60 days or longer. Our current *big* job is a bank ... wish us luck. Maybe I should check to see if its on that list of troubled banks  ;-)

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Re: Small Business Thread

I am trying to keep my eyes open for a small business opportunity  that will be a need around here when times get worse .    And  buy the supplies as we will be going through some deflationary time for a while .   Something people who could do it for themselves but has the money and would rather pay someone else something that many can not do for themselves and have to pay someone else .

Got any ideas ? 

one that came to my mind is  cutting and selling wood  .  Right now gas is cheap .. supply and demand is at work . Later when price of fuel is high  they will be looking for ways to stay warm .   Many may not even know one good wood from another . a few chainsaws , very little gas , and truck .    Skid Loader would be a bonus !   Later on Could just use the horses to haul the wood.     Oh and my son -in -law is practicing his horse training skills if we ever get that far out of oil .

 The other being raising a few milk cows or goats .  When the big boys crash those with no debt will be in demand . 

Each community is going to have different needs.  I just started to look around our area .  

Let me know what you have tried that is working and what  might not work .    Is the wood stove market saturated ?

FM

Ps .right now something in the economy must be selling .  The trains have picked up considerably in the last couple of months .

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Re: Small Business Thread

My elderst son moved here to South Carolina because the business climate is not good for residential remodelling down on the FL Space Coast. He is starting a business here. He jsut finished his first big job and has another one lined up. However, his younger brother is starting abusiness in the same comoutity - a lot like yours, Sager.

I will be watching this thread with great interest.

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Re: Small Business Thread

Well, rental properties are self explanatory. I have developed a good reputation with my tenants by being both proactive for repairs and maintenance and very quick to fix any issues they might bring up. I try to have a problem fixed within 24 hours.

My other business is a retail shipping store that does everything from private mail boxes and office supplies to shipping with the big three at discount rates and on off t shirts, mugs, wedding invitations and stationary as well as bulk commercial mailers and advertising posters, and photo enhancement and reproduction. Wide variety and I have not touched on everything we do.

We purchased the business in Feb of 09 and compared to the previous owners numbers, were very frightened we had purchased a train wreck.

We settled down and regrouped, trying several marketing strategies, biz to biz sales of bulk products to radio advertising. The biggest bang for the buck has been the local Chamber of Commerce.

The biggest bang for anything has been old fashioned customer service. I want my employees to know something about our customers. I admonish them that the second time they see someone come through the doors, it's a trend. We better be able to greet that person  by name if possible.

This combined with the best possible service, including recommending competitors when it is more cost efficient for the customer, has resulted in a 30% year over year increase per month of gross profits. Internal efficiencies have increased net an average 900% per month YOY.

I have done this without slashing payroll or cutting employees. We have also implemented a quarterly meeting with all of the employees where we tell them exactly where the business stands, and what to expect in the coming quarter. We have allowed our employees to innovate and take ideas to the next level with minimal oversight, and that has done a great deal for productivity. It has also done a great deal for the sense of value and accomplishment our employees feel when they are allowed to produce and follow ideas to their conclusion.

What I am doing now is slowly upgrading equipment. One of the things we are trying to prioritze is alternative energy sources, as we are expecting energy prices to rise drastically.

We have operated solely on cash since we purchased the company, and continue to do so. That means that equipment is phased in (or out) as cash on hand dictates. We have prioritized our debt obligations (business purchase debt) and have yet to take a paycheck.

Once we have upgraded our equipment I feel the efficiecy will increased to the point of being able to reach out to other business online. We currently manage confidential information flow for a large multi national corporation who has permanent headhunters afield worldwide, and would like to expand into this a bit more and see where it leads.

If anyone has any experience i the retail shipping, commercial mail or information security fields I would love to hear your experiences. Heck, if your a small business owner, I want to pick your brain...as I am sure most of us are wired to learn and apply lessons continuously.

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Re: Small Business Thread

[sweeping 16 months of dust off this thread...>cough!<...>wheeze<]

Hey all --

Wanted to check in with the small biz owners (or those that work at one) vis-a-vis how things are going.

A recap of our small business'...uh, business since the current miasma descended:

Sept '08:  biz at an all-time high (53 sessions/week).  

Sept-Dec '08:  unchanged.

Jan '09:  the air begins to leak out of our balloon.  Over the next 15 months, business slowly declines about 35-40%, right down to survival level, give or take (low 30s sessions/week).

June '10:  as we usually do (but didn't in '09), we get a seasonal summertime pickup with new clients coming on board (we own 2 small Pilates & massage therapy studios -- our generally well-to-do clientele send their kids off to summer camp in mid/late June and then their moms [our biz is 80% women] think "Now I have some time to take care of myself").  By the end of August we're in a comfortable place (just over 40 sessions/week).

September '10:  Damnit!  Husbands (many in FIRE & related businesses [hey, this IS Westchester County, just north of NYC]) must be coming home and telling wives that the rumor is bonuses are going to be slender -- clients cut back or bail -- we're back down to the mid-30s.

January '11:  largely unchanged.  I hear conflicting stories from clients:  it was a good year, bonus-wise, or it was a shock to find out there was no bonus (bear in mind, this information is always about someone else ["my best friend's husband didn't get a bonus this year!"], our clients rarely discuss their own finances directly).  So, either we're a leading indicator (those that were going to drop because of money concerns already have) or a lagging indicator (clients buy 10-session packages -- so if they are 2x/week, they turn over roughly every 5 weeks, or every 2-1/2 months if they're 1x/week).  If it's the latter, we're going to have a very unpleasant mid/late February.

So our biz is holding is own, although it's a saga every time payroll or the rent comes up.  We've used up our cash reserves surviving '09-'10.  But we've been developing other income sources (I'm working occasionally w/a friend doing construction/remodeling [nothing like shoveling out a trench for a gas line in somebody's back yard to re-acqaint oneself with the value of a buck], and pursuing three additional possibilities [no joy yet]) and so for now we're doing juuuust okay.  

Unrelated to my personal story:  

1.  Businesses in our area seem to be also doing okay.  A bunch have folded but the slaughter seems to be over for now;  if a biz has made it this far, looks like they can survive for now (until another crunch of some sort).  

2.  I went to LA to visit my mother over Xmas.  She lives about 40 minutes south of LAX.  The drive from the airport takes you down Pacific Coast Highway about a half-hour.  This is a hyper-developed commercial strip with businesses of every sort.  Little professional office buildings, restaurants, shopping malls both large and strip-mall-types, car dealerships, small independent shops, etc.  Since I first lived in LA in '78, this strip has done nothing but thrive.  Older buildings/malls were regularly torn down and rebuilt bigger/spiffier.  Never a sign of vacancy or blight.  But the trip from the airport to mom's place this year was quite different.  Egad, perhaps a quarter of the space was vacant, "FOR RENT", "AVAILABLE FOR LEASE", or had the streetside windows soaped over.  And from the look of the signs, etc. in the window, they'd been there quite awhile (bleached by the sun, etc.).  Just one more data point, FWIW.

I'd be interested in other folks' info and/or anecdotal reports from far and wide.

Viva -- Sager

nb:  edited to add missing quotation-mark

Jager06's picture
Jager06
Status: Gold Member (Offline)
Joined: Dec 2 2009
Posts: 395
Re: Small Business Thread

Sager, I hope you are right about businesses who have made it this far.

Our retail shipping/ mail services has increased 17% YOY gross. Margins have increased as well, but due to more streamlining and reducing the full time employees to part time. It sucks, but we have stiff competition and if we are going to be the last ones standing, then we have to get slim every way possible. We have also lowered prices twice this year, in an effort to undercut the competitors and drive more business into our store.

We are considering selling the residential rental properties, just to get away from the increasingly unemployed and drug contaminated applicants.

We have been working on our food storage, and started with a MLM that is new and paying quite well thank you....and offering free food for taste tests.

You can review that here: http://www.pthree.myefoods.com/

I know, the ususal pyramid crap comes to mind. But they are still shipping food, unlike Mountain House. MLM is also one of Robert Kyosaki's recommendations for those of us who will never star in a movie, write a book or invent the next mega hit software.

All in all things are going well, but we are all cash and PMs right now. All debt not related to mortgage or business is completely paid. The business debt is expected to be extinguished in another year or two, if we can maintain at the current ratios.

From there it is going to be time to look at expanding into our competitors storefronts. Or resetting into a localized form of courier/ mail services to merge with the lack of oil based energy.

We hope to be an all solar, battery based system by summer.

Okay....enough for now.

Best wishes,

Jager06

thatchmo's picture
thatchmo
Status: Gold Member (Online)
Joined: Dec 14 2008
Posts: 264
Re: Small Business Thread

It's interesting how a small businessperson's life can be so dominated by the tenor of how the business is doing at the current time.  I am the owner of a small- 5 employee, $1.3M/yr- business.  Been at it for 25 years.  Kauai Marine & Mower sells boating accessories, outboards, generators, chainsaws, lawnmowers, etc.  Service department as well.  I'm a better mechanic than business manager, so I just turn the books over to the CPA and judge the state of things by the checkbook balance and what's in my head- I know, "lame", but it's worked for 25 years and we're still here.....I mainly concentrate on taking care of customers day at a time and figger if I do that well the rest will fall into place.  It always has.....

Business slowed some in '09.  And was slow in '10 as well.  Probably down about 15-20%.  Cash reserves are about half of what I usually like to have available.  Business usually starts to pick up in January after a slow 4th quarter.  We'll see.  What causes me grief these days is related to the timing and posibility of future events and their relation to my business decisions.  Should I order a years worth of stuff now while the price is still stable and the stuff is available, or order small quantities in case TSHTF tomorrow, and no one will be able to afford to buy it anyway.  Much of what we sell is "tool-type" stuff so would probably continue to we valuable no matter what the economic condition- as long as fuel is available.  I've many times wondered if gas was rationed, would people spend their allotment on driving a few miles in their 4X4, or mowing the lawn, cutting firewood, or tilling the garden with the rototiller....

I've thought several times about starting a new niche within the business- carrying some "preparedness" stuff and more basic quality tools and such.  So much stuff is available on line and with "magic brown truck" delivery though, I don't know if it would be worth it.  I'm sometimes amazed a the number of customers that seem to be cognizant of the pending "interesting times"- often people I wouldn't think would be the "type" to be knowledgeable about such as we discuss here- my bias,,,,,,but heartening. 

I'm 58 and when I'm in my dream state I like to think about retiring some time soon-ish, but economics dictate that I'll probably finally leave the shop feet first (not soon, hopefully)....In some ways I think that may not be so bad- being a established businessperson with a decent reputation hopefully will have value in the coming interesting times.  It does seem to have certain benefits now.  It's nice to get to know everybody....

That being said, I do think that Kauai may be a somewhat unique place.  Local population I think has been very financially conservative- a positive remnant of the plantaion days.  There is a certain % of the population that is extremely wealthy and pump in a certain amount of $$ into the economy to maintain their estates....Largest military base in the world (sq. miles, I think- mainly underwater) means steady employment for many.  Let's not forget the GMO seed companies that operate on the south side....don't get me started....

All-in-all, I'm still counting my blessings.  After all, my sweetheart still adores me (go figger...)  Aloha, Steve.

Saffron's picture
Saffron
Status: Silver Member (Offline)
Joined: Aug 29 2009
Posts: 238
Re: Small Business Thread

thatchmo wrote:

What causes me grief these days is related to the timing and posibility of future events and their relation to my business decisions.  Should I order a years worth of stuff now while the price is still stable and the stuff is available, or order small quantities in case TSHTF tomorrow, and no one will be able to afford to buy it anyway.  

We have the same concerns, Steve. In '09 many of our vendors started adding an "oil surcharge" when gas went up ... interestingly I don't think those surcharges ever went away.  My husband has to store many things that in a SHTF situation would have little to no use ... wood stripper and finish, shelves of cans of different color stain. We have to weigh storing it (and paying for storage) against making frequent small (and more expensive) orders. 

thatchmo wrote:

I've thought several times about starting a new niche within the business- carrying some "preparedness" stuff and more basic quality tools and such.  So much stuff is available on line and with "magic brown truck" delivery though, I don't know if it would be worth it.  I'm sometimes amazed a the number of customers that seem to be cognizant of the pending "interesting times"- often people I wouldn't think would be the "type" to be knowledgeable about such as we discuss here- my bias,,,,,,but heartening. 

Along these lines, I've been thinking lately about the saying that the rich have their assets work for them. As long as our money is still worth *something* it would be nice to come up with a list of assets that could be money makers in our coming economy. Rental housing is the most obvious though here in Southern Cal. prices still haven't gone down enough to make that worthwhile. Plus, my brother, like Jager06, can testify to renter problems ... I think this is an area where you'd want to have plenty of experience with weeding out applicants and knowing renter vs landlord rights.

I'd love to hear ideas for assets that could generate income ... here are a couple to start the list, but I'm kinda stumped beyond this:

- vending machines

- storage units 

Neither of these are ones I am interested in ... I don't purchase from vending machines myself, so I don't see mcuh value in them. And while the storage unit business is booming here (likely from people needing to store stuff as they downsize) it's a bigger investment of time and money than we have. But am interested if anyone can think of others. 

~ s

earthwise's picture
earthwise
Status: Platinum Member (Offline)
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Posts: 824
Re: Small Business Thread

Saffron wrote:

I'd love to hear ideas for assets that could generate income ... here are a couple to start the list, but I'm kinda stumped beyond this:

- vending machines

- storage units 

Neither of these are ones I am interested in ... I don't purchase from vending machines myself, so I don't see mcuh value in them. And while the storage unit business is booming here (likely from people needing to store stuff as they downsize) it's a bigger investment of time and money than we have. But am interested if anyone can think of others. 

~ s

I've got a buddy who bought a small vending machine route for his wife to run. It brought a pretty good return for the investment of time/money so he started expanding. It takes a knack to scout out new locations, but he picks up used machines on the cheap and in a couple of years he's tripled the size of his biz. She fills the machines and collects the money three times a week, takes about three to four hours each run. They love it.

Another buddy (I have lots of friends) owns two self-storage properties. One is across the street from the Lawrence Welk Resort outside Escondido. It's always full with pretty regular payers. The other is in a not so nice area and is much more problematic-higher vacancy rate and chronic late payers. He's really happy with the one. The other? Not so much. It all depends on the property.

Saffron's picture
Saffron
Status: Silver Member (Offline)
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Posts: 238
Re: Small Business Thread

earthwise wrote:

Another buddy (I have lots of friends) owns two self-storage properties. One is across the street from the Lawrence Welk Resort outside Escondido. It's always full with pretty regular payers. The other is in a not so nice area and is much more problematic-higher vacancy rate and chronic late payers. He's really happy with the one. The other? Not so much. It all depends on the property.

I would have thought with the economy prices would be going down ... we have a small storage unit due to our business and have been wanting to expand to get more of the business stuff out of our garage. But prices are holding steady since there are so few vacancies!

osb272646's picture
osb272646
Status: Silver Member (Offline)
Joined: Mar 14 2010
Posts: 120
Re: Small Business Thread

A few months ago, someone posted information on an aquaponics type business (with links, I think) on one of the business related threads.

I've been trying to find that post, and since I cannot find "forum search", I'm hoping somebody can point me in the right direction.

Thanks to all for the great information on these forums.

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1267
Re: Small Business Thread

osb272646 wrote:
A few months ago, someone posted information on an aquaponics type business (with links, I think) on one of the business related threads.

It sounds like you are looking for the Farmer Brown "What Should I Do?" article.  Under the "Stay Current" menu at the top of the page, pull down to "What should I do?", then go back through the user written articles.  There are only a couple pages of them so you should find it really quickly.

Nate's picture
Nate
Status: Gold Member (Offline)
Joined: May 6 2009
Posts: 460
Re: Small Business Thread

Here in California's central valley  we are surrounded by farms.  Most farming operations are capital intensive on two fronts:  land and  equipment.  The only individuals that perform both tasks have either inherited the land or married into it. 

From the investors perspective, many purchase the land and the old home that comes with it.   Our area has lots of individuals who are blessed with both equimment and knowledge, and they will farm this land.  The owner of the land pays for the taxes and water (very cheap here) and the farmer provides all the equipment, chemicals, and processing.  Typical splits are 70% (farmer) and landowner (30%).  The owner gets the tax benefits.  The only headache is renting the old farmhouse.  All my interactions with "my" farmer are based on a handshake - wouldn't have it any other way.  They (2 brothers and 1 son) farm many parcels and have the ability to do nuts (almonds and walnuts), beans, corn, and oats.

We double crop on our parcel - mixed grain (basically oats for hay) for cattle / horses in the winter and dried beans in the summer.  I sold my 30% share of the beans last week.  I can take delivery of my portion or simply sell it.  Two tons of beans is too much for the pantry.

I view land as "stationary gold."  It doesn't pay much NOW.  I would rather have land than gold, but getting the right parcel (location, soil quality, neighbors, farmers) takes several years.   I'm 2.5 years into looking for another parcel, bid (and lost) one and am seriously considering a foreclosure down the street. 

I too am racking my brain in ways to generate a cash flow for the future.  Beef animals or bee hives (almonds are bee pollinated, walnuts wind pollinated) are also local considerations.  Firewood (I hauled a bunch this weekend) is for the young.   I am "farmer smart", but a mechanical moron.  Not the total package.  Remember community - few true renaissance types out there.

I think Sager has started a great thread that needs much more input from this community.  Not many of us will sit out the trouble ahead eating stored food.  We are doers and thinkers and want to make a difference. 

Nate

sevenmmm's picture
sevenmmm
Status: Silver Member (Offline)
Joined: Jan 19 2011
Posts: 108
Re: Small Business Thread

Interesting knowing some background on those posting. 

I have started a half dozen or so business' over the years. Most of them quickly petered out, like retailing fishing plugs on Ebay (grossed maybe 30 grand in 2+ years, handle is still there whitefishtackleco),  as a partner in an expanded polystyrene manufacturer (I never did know how much it made, but I sure worked hard at it), hauling frieght with 5 semi tractors and van trailers (grossed 250 - 350 grand a year for 4 years), and I even tried out as a professional walleye fisherman (won about 10 grand after spending 30!). There were other smaller deals, my not wanting to mention them if you know what I mean.

My longest standing profitable business has been a service that collects discarded tires and tires on wheels from tire retailers and salvage yards. We have an average of 15 employees and sort and sell the still useable tires and salvage the metal from the wheels. Started it in 1990. Something worth mentioning is when the economy was really humming along in the 1990's. profits were slim and everyone I did business with had me by the throat in the deal making. But the worm has turned, entry into the marketplace is stiffer with tougher environmental rules and higher equipment costs. Now, scrap metal prices are very high and the market for used tires is voracious. The best part; it is all cash business. Like I like to say (to the retail shops I service), I have good used tires, I want goood money. Matter-of-fact, I broke a deal just this morning that will increase revenue substantially. We are in the "sample" phase with this new supplier and I need some luck to make it a routine.

Then finally, the business I have had all my heart in is a business that installs solar domestic water heaters, solar thermal water heaters, and solar air heaters. This business has been a loser from day one, having to start it out from scratch. I put in 3.5 years of promoting at shows and directing the business until we had our 100th installation, at which time, I totally burned out. The largest installation was a 60 collector domestic heater on a dorm building for the university system (really, all of the installs are interesting).

Of course, my tire business was starting to suffer at the same time, so last August I stopped dead working on the solar biz and after about 3 months of recuperating, have slowly worked back into the tire biz. The solar side is floundering, but they have 3 more larger jobs before push will turn into shove. It is seemingly a miracle that the tire biz is now humming along again, and soon I will be needed back at the solar. But my interest (in solar), and strength, is still very soft. 

My next best business idea is to reverse the Henry Ford assembly-line idea. The cost of the shredding machines and all the supporting equipment is getting close to the cost of labor with hand tools. I have 3 of the hardest components in place; the handling of tires, the plastic and fuff, and have my tire salesguy is out making contact with the small car haulers in the state. 

Planting of my ass on this chair and typing my thoughts to total strangers is a form of therapy and relaxation, someday soon I will have recharged, to fully apply myself again. We'll see.

Nate's picture
Nate
Status: Gold Member (Offline)
Joined: May 6 2009
Posts: 460
Re: Small Business Thread

Sevenmmm,

Thanks for taking the time and energy to post. 

Nate

kvkent's picture
kvkent
Status: Member (Offline)
Joined: Jul 1 2012
Posts: 1
I started my first business when I was 13 years old - need help

Greetings! I entered the world of business at age 13 years old in high school and built my business to KVK ENTERPRISES LTD. I also am priviledged to have founded a Youth Gospel ministry - Dare 2 Be Different International

Search them online

They have been going real well, but as you know, CAPITAL and ACCESS TO CAPITAL to expand like you want to is hard to find.

I am looking for business investors/donors to support my initiatives.

Read more on kvktalks.com

If you are interested in St. Kitts - Nevis (Caribbean) Real Estate, feel free to contact me to.

Email: mobile (at) kvkenterprises.net or BlackBerry Pin: 220067D8

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