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 About.com, Bob Phibbs who wrote this post about the event, and Gene Marks who writes for Forbes.com and Businessweek.com.

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, Yelp.com, 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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1 comment:

Darryl Adie - &IT said...

Sell to existing customers, it's always more cost effective than trying to acquire new ones, people are more reluctant to engage with new suppliers when things get tough.

 
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