No one sets out with a plan to fail, but so often, people let obstacles get in the way of their success. The ability to learn from setbacks and take steps to protect against future business threats sets successful entrepreneurs apart from the pack. Their experiences can teach you how the right business concept, building strong relationships, and diversifying revenue streams can help your business through adversity.
Find an established need
After a failed digital photography startup attempt and a brief stint working in high-tech, Greg Shepard was ready to chase his entrepreneurial dream. This time, he decided failing wasn't an option. Upon reflection and research, Shepard realized he had made a pivotal, and common, mistake with his first business: he assumed that to be successful, he needed an original idea--something that had never been done before. He now knows that when choosing a new venture, it's a good idea to serve an established need in the marketplace rather than trying to manufacture demand. Having competitors in the space simply proves there's a market for the business.
"There were hundreds of maid services in Dallas. That indicated there was plenty of business to go around," he says. He created Dallas Maids, a housecleaning service with an easy-to-use online booking site--a reflection of Shepard's technology background. The online booking tool also set his company apart by giving customers a convenient way to book maid services using the digital booking interface instead of having to call and make an appointment. Today, Dallas Maids is a million-dollar company. Shepard also started other maid services using the same system. The company benefits from high demand in the market and recurring customers, since most people book weekly or biweekly services.
To come up with a great business of your own, Shepard suggests keeping a running list of all your ideas. To assess the viability of a concept, look to data from industry associations and the U.S. Census Bureau. Research revenue for the category, locally and nationally, and consider consulting with a representative from your local Small Business Development Center (SBDC) or Chamber of Commerce.
Build strong relationships
During the aftermath of Hurricane Katrina, it was a tough time to run an event planning business. But that's exactly what Jeff O'Hara did. He moved out of the city and took a series of part-time jobs to supplement his income, but he was determined to wait it out. However, he continued to keep in touch with clients and suppliers regularly. "Any time I got a piece of positive news, I blasted it out to my client base," he says.
O'Hara moved back once the city restored the infrastructure needed to support the events industry. His challenge wasn't getting people to choose his events company, AlliedPRA New Orleans, over another--it was getting them to believe the city was even open for business. Images of devastation were still fresh in their minds. Just as the recovery was beginning, the Great Recession hit, slashing revenue for the events industry nationwide by as much as 75 percent, O'Hara says. Lucky for him, persistence has always been his strong point. "When the tide turned, there were only a few of us left, and we, at long last, reaped the benefits."
It wasn't just persistence that paid off. O'Hara credits success to his focus on building customer relationships in person, rather than "from behind a computer screen." Even during hard times, he did what it took to get in front of prospects, from "wining and dining" to attending relevant events. It was a six-year climb to build a healthy business again, but today AlliedPRA New Orleans is stronger than ever and on the Inc. 5000 list for the second year in a row.
Long-term, repeat customers essential for growth. Businesses can find such customers in a variety of ways, including sponsoring industry conferences, hosting events, and providing prospects with useful tools that help nurture relationships. "Local hotels are a good source of referrals for us, so last year I brought in an internationally-known sales trainer to lead a day of training for our hotel partners and sales team," explains O'Hara. Gestures like these help clients to see you as a valued resource rather.
Diversify your revenue streams, even if business is going well
From 2003 to 2008, Rafe Gomez was a bona fide celebrity. As host, DJ, and producer of "The Groove Boutique," a top-rated radio mix show that was syndicated across the U.S., he toured the country, produced music, and even hosted a show on QVC. During the Great Recession, Gomez lost the radio gig, and all the revenue streams that came with it.
Gomez struggled to find employment. The experience inspired him to create a career strategy audiobook about the interview process, What's In It for Me? He promoted the book himself with a successful media campaign, which led to him co-launching a multimedia PR company, VC Inc. Marketing.
At the peak of his DJ career, it seemed like he had no shortage of money-making opportunities, but they were all dependent on his hit radio show. Today, Gomez is mindful of diversifying his client base to prepare for negative disruption. "Should one of those engagements end, I have plenty of other active clients that will allow me to sustain the health of my business," he says.
To diversify your own business revenue streams, Gomez suggests securing clients in a variety of industries. It's also a good idea to expand your relationships with existing clients, wherever possible. For example, a PR firm might also offer social media consulting services.
These three small business owners all weathered setbacks and bounced back to run successful ventures. Through resilience and grit, they were able to overcome their challenges and emerge stronger than ever.