The Red Hot Chili Peppers song, "Give it Away" could have been an anthem for my business when I first started. Lately, the tune has made a re-entry into my brain & business.
I started laying the foundation for my baby planning business in 2004, during a pretty strong economy. It was in 2006, during a really strong economy, that I finally made the full-time leap into baby planning. Most of 2007 proved to be bang-up as well.
Something you should know is that I'm surrounded by economic & financial gurus. All of whom told me, "You're starting a business in the worst possible time." But did I listen? What could they be talking about? The market was booming. The unemployment rate was super low (which, I quickly found out is not a plus for a new business). As I walked away, I could faintly hear them say, "We're slated for a recession end of 2007." Recession Shmession! Bring on the new biz.
Here's what happened. In order for a new concept to work, you have to prove out and perfect that concept. To do this, I had to give quite a bit away and/or work for peanuts. I hustled taking on any work I could get in order to perfect the Peekaboo process and build a strong portfolio. It paid off! Not only did I build a great portfolio and process, I received valuable feedback.
By the middle of 2007, I was able to establish my value and build a semi-appropriate pricing model. After 3 years of building the business, I was finally starting to see the potential for a return on my investment.
Now, I was leery of what was to come because the market in the fall of '07 was at the highest it had been in history. Un-employment was at the lowest it had been in decades. From my experience, what goes up must come down. But, my calendar was booked through the spring of 2008 so, I decided to start looking for potential employees. [Insert screeching brake noise here].
Almost immediately after I held a recruiting meeting for new talent, the talk of "Depression" was haphazardly thrown about. I say haphazardly because my experience as a small business owner is that small business owners have a finger right on the pulse of the American consumer. Every time a politician got up to talk about how dire our situation was, I received a cancellation. I started talking to my other vendors and they were experiencing the same phenomenon. This was before the market & employment really started to tank. And, to say that I'm furious with politicians who create more of a crisis than exists for political gain, is an understatement. But, let's move on.
The rest of 2008 was a volleying match. I followed restaurant trends. All of the middle priced restaurants were starting to go under. Fast food and high end restaurants were still above water. Because my services are too time extensive to cater to the lower wage earners, I focused high. Suddenly, the more expensive restaurants started sinking. I was still targeting the correct market; it just meant that the majority of my market's pocket books had closed! If they weren't willing to shell out a descent amount for a nice dinner, they weren't about to hire me for an over-the-top baby experience.
2009 started different than any other year. Most years, I'm optimistic and excited. This year I was pissed and in defense mode. I've worked hard to build a great concept and I wasn't going to let it slip through the market's fingers.
When a market turns, the natural reaction in business is to re-evaluate your profit centers and try to create new ones. Instead of selling convenient packages, I started piecing out my services, selling ala carte. This meant working harder for less.
In addition, I realized it is a good time to build up my brand. To do this, I decided to launch a revolutionary new marketing concept. One that will be fully unveiled soon! The kicker is...the combination of the weak economy and my new marketing has got me right back where I started, "Giving it Away."
Bottom Line: There are economists who spend their whole lives evaluating our economy and tracking, pretty accurately, when we will climb and when we will fall. If I had listened to those around me, I would have started my business in an economy like the current one with low rent, available labor and a great idea. Then, as the economy climbs back, I'm positioned for a longer period of success and will hopefully be stronger when the next dip occurs. As it is, I started in a sprint, got to cruise in good economy mode for a couple of months and then was forced right back into the sprint of survival. A person fresh into the race could really give business owners like me a run for their money.
Best of luck!
Please note the thoughts and opinions expressed in this blog are based on the experiences of the author. The information contained in this blog is in no way meant to take the place of professional advice. It is only meant as insight into the world of a small business owner. As always, thank you for visiting and feel free to share your own experiences or conerns by leaving a comment