Monday, September 22, 2008

Strategies for growth in a slowing economy

Yikes, what a mess! The havoc in the stock and financial markets made it really challenging to stay focused on my work last week. I spent 14 years of my life at Lehman Bros., so it's not only the pain of seeing the place I called "home" crumble after such a long and rich history, but through the years I also accumulated company stock, which is now, well... worthless. Ouch. Big ouch. Just the thought of opening up my account to see how much I've lost sends chills up my spine.

It still remains to be seen how the economy will be affected by the ongoing saga in the financial sector, but if history is an any indication the market has always found a way to bounce back up from past meltdowns. However, it's the negative perception that stays on consumer's minds and affects their behavior and their wallets. So how will small businesses weather the current maelstorm? Well that was the topic of a blogger's roundtable luncheon I was invited to recently. The host was Steve Strauss, small business expert and "Ask The Expert" columnist for USA Today. Other fellow bloggers included Yvonne DeVita who pens the Lipsticking blog, Jay Heyman of Porte Advertising, Peter Piazza who writes about printers and scanners for, Bob Phibbs who wrote this post about the event, and Gene Marks who writes for and

One success story I was able to share with the group is about The Bridal Garden, a non profit boutique that sells designer wedding gowns at 75% off retail prices. My long time friend Geraldine Brower (that's her on the right), who is the shop's Director tells me that her business has grown exponentially in the past two years as more people hear about it and tell their friends. The store started out twelve years ago as way to make extra money for Sheltering Arms, a non profit organization whose mission was to help disadvantaged children and their families in the NY area. "The concept at the beginning was to get New York City girls to donate their dresses after they got married, so we stockpiled gowns for a year to have enough to open the store," explains Geraldine. But they soon had to find other ways to get inventory, so they branched out and called on stores and designers to get them to donate dresses. "Back then the Bridal Garden wasn't the only way that Sheltering Arms raised funds so I didn't take a lot of chances. We wanted to build the business slowly and steadily so it wouldn't falter," she adds.

Since then the store has changed hands and it now benefits the Brooklyn Charter School. They no longer have the backing from an umbrella organization and need to be self-supporting. That has forced them to put all their efforts into making enough money to cover the costs. "Before it was just a sideline. I was director of development and I was doing a lot of other things; now I'm dedicated to the shop full time, and we've built a strong business. We were up 20% last year and another 20% the year before," says Geraldine.

When I asked her how she did it she says it's been a combination of things:

Keep your costs down
"Our expenses are really low. For every 3 dollars that comes in, one dollar is pure profit. That's the result of growing slowly. If you have the time to invest in a business and don't want to risk money, you can do it on a shoestring."

Step up the media appearances
"Recently we were interviewed on Eyewitness News and they put us in the backs of taxicabs in NY City for two weeks. The segment we were in played over and over and was seen by 1.1 mill people, according to the networks stats. That was about 3 months ago and since then our sales are up 35%. I pitched the show a few different ideas and they ultimately liked this one, which had a "weddings on a budget" theme. We had been written up in Newsweek magazine and often TV follows print so that helped us get recognition with this story."

Embrace the internet
"The internet has been the most effective marketing tool for us because people in the marriage demographic use the internet for everything. Whenever anyone calls for an appointment we ask them how they heard about us and it's usually one of two ways: they either do a search and we come up, or they read about us in blogs where brides communicate with each other.

I made sure we had a very good site with a lot of keywords in it (like discount, wedding dresses, charity, resale store) so it comes up high in the rankings. We've also appeared in many blogs, like Wedding Bee, Junebug Weddings,, Citysearch, and more opportunities arise as new new sites pop up. Brides write in and start a dialogue. Brides are telling their friends about us and more designers are coming onboard. We now have name recognition and people know who we are - we're very mainstream now. It helps to have a really good product at an inexpensive price and to provide good service. Shoppers can also feel good about knowing that by buying our gowns they are helping children and contributing to a good cause."

Do you have any small business success stories or tactics to share? Please do!

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Wednesday, September 10, 2008

The Makings of a Media Mogul

I recently met Tom Schlobohm at Digital Wednesdays, a weekly gathering for media professionals at an outdoor lounge called ONO that's in Manhattan's still trendy meatpacking district but feels more like being in South Beach. After chatting for a little bit he started telling me about the house he was looking to buy with 3 friends near the beach in San Diego so he could live there one or two weeks out of the month and then the rest here in New York. Now at first blush Tom doesn't look like a trust fund baby or a Hollywood movie star (though he could fit right into Entourage), so I asked this very young-looking 28-year-old what he did to be able to afford such a jet-set lifestyle. Well it turns out Tom caught the entrepreneurial bug early in middle school, first washing cars in the summer to get his first bike, then shoveling snow to score his first computer. At 13 he ran a direct mailer where he mailed out coupons 3 times a year, during his breaks. After 3 years he made enough cash to buy a pair of skis and spend a whole summer in France.

This mogul-in-the-making started his first online business in high school, promoting search engines and online offers (meanwhile at that age I was busy trying to figure out what lip gloss would match best with what pair of jeans...). He acted as an affiliate and helped companies with their search marketing campaigns. His take? $130Gs...enough to pay for college! By 18 Tom was already living "the life" - he bought a Jeep Grand Cherokee, went glacier skiing in New Zealand and then island hopping in Fiji.

From there he started a co-location hosting company and had a couple hundred servers throughout the country. One year out of college Tom had enough to buy an apartment and a rental condo, the latter because he wanted to learn about the real estate market.
About 6 months ago Tom started his newest venture, LiveGrad, which focuses on education leads. "We generate leads and get qualified applicants and send them to the schools that hire us. We focus on adult education, like continuing ed or MBAs or doctorates. Our target is people that are already set in their careers but don't have a bachelor's or associate degree, or want a Master or an MBA. Or maybe they want to go back to school to switch careers. It's generally people that already have jobs and are in the workforce," explains Tom.

It's quite a big market. Today the U.S. Census Bureau estimates that only 28% of Americans hold college degrees, and they're execpting that percentage to climb. According to the U.S. Department of Education, between 2005 and 2015, postsecondary enrollment is expected to increase 11% for those under 25 and 18% for those 25 years of age and older.

LiveGrad fends off competition by doing the groundwork. "The big thing is lead quality, so we have a call center that helps us firm up the person's interest and make sure they're in fact a qualified applicant. We've been able to find a niche and continue to grow. We're good at pay-per-click and organic search in Google, MSN and Yahoo!," adds Tom.

Using Facebook Ads
In addition to search engine advertising, Tom occasionally uses Facebook ads. This past summer he was looking to hire an intern and went with Facebook because they allow you to do a highly targeted ads, more so than other ad networks. He wanted to recruit a technology programming student from 4 specific schools, so he ran the ad and found someone from Cornell in just 3 days - for just $47. "I was able to target only current students in the schools I wanted and also only juniors and seniors. Facebook has a big student population and the information is very accurate because it's user generated. People fill out the information themselves. You can specify location, state, city, keywords or what university or schools they're in because all that information appears on their profile," says the native New Yorker.

For his business he mostly advertises through Google, MSN and Yahoo! but says that if you have a product or service for a very targeted group, Facebook works well. You can search by keyword or by company name so can you can target people that have worked at a certain company or that have a certain interest, or even alumni. Tom points out that it's expensive but it works well if you're looking to reach a very specific target market, like at a company or a specific school.

Tom says he'd like to build LiveGrad up and sell it in a few years, but beyond that he can't say. My guess? I see him featured in Entrepreneur or Inc. magazine pretty soon - but you read about him on the Mogulette Blog first!

If you have you any thoughts or comments on using Facebook ads, please share...we'd love to hear from you.

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