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Small Business Thread

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  • Fri, Jun 26, 2009 - 05:08pm

    #1

    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

  • Fri, Jun 26, 2009 - 05:23pm

    #2
    Peak Prosperity Admin

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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

  • Fri, Jun 26, 2009 - 06:15pm

    #3
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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.

  • Fri, Jun 26, 2009 - 07:01pm

    #4
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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

  • Fri, Jun 26, 2009 - 07:06pm

    #5
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    Re: Added Value Services

[quote=EndGamePlayer]

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.

[/quote]

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

  • Fri, Jun 26, 2009 - 10:08pm

    #6
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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

 

  • Sat, Jun 27, 2009 - 02:11am

    #7
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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

  • Sat, Jun 27, 2009 - 07:21pm

    #8
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    Re: Added Value Services

[quote=EndGamePlayer]

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

[/quote]

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 .).

[quote=EndGamePlayer]

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.

[/quote]

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

 

  • Sat, Jun 27, 2009 - 07:30pm

    #9
    Peak Prosperity Admin

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    Re: Small Business Thread

[quote=Ron Shimshock]

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. 

[/quote]

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.

[quote=Ron Shimshock]

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.

[/quote]

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

  • Sat, Jun 27, 2009 - 07:33pm

    #10
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    Re: Small Business Thread

[quote=EndGamePlayer]

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. 

[/quote]

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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