There were many reasons we decided to settle into a house without wheels for a while, but one was to get serious about my small business. For the past three years I’ve juggled work and travel, and it has worked, but I often felt that if I spent more time concentrating on the business, I’d be able to come up with ways to make it run better. Parking ourselves in a house would yield bonus time that was formerly spent driving and dealing with other overhead associated with travel.
The economic recession has only spurred the need for me to really concentrate on the business. Niche magazine publishing is not a great way to get wealthy even in the best of times. With a worldwide economic crisis coupled with a recession in the RV industry, my little magazine is in the crosshairs.
We’ve already been pummeled a bit in 2007. While people keep subscribing to Airstream Life at the same rate as the previous year, several advertisers have abandoned most or all of their advertising program. (Talk about a self-defeating strategy. People are still traveling and using their Airstreams — check any state park or campground for proof.) Panic is never pretty, and it’s never the right choice.
I’m writing very frankly about this because I think there need to be a few voices to counter the constant negative bombardment in the popular media. People are getting too caught up in what happened on Wall Street this morning, and forgetting to see the bigger picture. There are opportunities in a downturn. In times of war, promotions happen fast. You can sit on the sidelines and wait for it all to be over or you can get in the game. However you say it, adopting a position of passive fear or active retrenchment is not going to advance your cause.
The RV industry slowdown has been apparent since the beginning of 2007, so we’ve been working to mitigate the damage all year. To get the message out, Brett has posted some essays about the value of advertising in a downturn, and privately he’s been counseling our advertisers on ways to intelligently respond to market conditions. A few have listened, and they seem to be surviving very well. The companies that understand the value of marketing intelligently when others are running scared will have long-term advantage over their competitors.
Of course, when you sell ads to people, those ads had better work. So we’ve offered free ad re-designs to our clients, to improve the results they get from their ads. Those who have taken advantage of that service are reporting great results. We’ve also been seeking out small businesses with relatively recession-proof business models, as new clients, and we opened up a new — inexpensive — advertising section just for them. We’ve also offered creative ways for our advertisers to be able to afford their ads, including accepting credit cards and product or service trades.
But in the last few weeks, it has become obvious to everyone (even the Commander-in-Chief, the Secretary of the Treasury, and Alan Greenspan, apparently the last three people to figure it out) that the financial crisis is deeper and will last longer than at first expected. That means my efforts have to go far beyond just shoring up the current clients and seeking new ones. It’s time to look for efficiencies and cuts that can help sustain us for a long time.
Now, all this might seem enormously depressing. I admit that at first I was dismayed as well, but then I realized that finding efficiencies in my business could actually be fun. Like selling, it’s a task that can be a rewarding game. The trick to stretching a recipe is to make the end result taste the same, and that requires creativity, which is the fun part.
So every few days I try to come up with another idea to either save money or increase revenue. The ideas can range anywhere from sweeping changes to little tiny ones. It doesn’t matter how big the savings are, just that I keep coming up with new ideas. I figure that if I keep up the challenge long enough, eventually I’ll find ways to secure Airstream Life against the storm.
For example, a week ago I talked to the guys at the Verizon store and discovered that by combining our two cellular phones (one on Sprint, the other on Verizon) into a single “Family Share” plan, I could cut monthly expense by $50. That’s a no-brainer, so we did it. Two weeks ago, we finalized two new products that we can sell through our online web store for the holiday shopping season, so they are on order and should be available by Nov 1. (We’ll have a cute little Airstream model and some improved aluminum tumblers.)
Other ideas: We’re reducing complimentary copies sent to advertisers, to cut waste. We’re using a slightly lighter paper on the magazine cover. I switched my Amex card from a Gold card with $100 annual fee, to a no-fee card that gives 5% back on fuel purchases. We’re offering discounts to advertisers who pay for their ads early. I’m cutting back on travel mileage and rallies (but still planning at least five months of travel in 2009). We’re promoting back issue sales a little more aggressively. It all helps.
Some ideas actually increase our expenses but will pay off in the long run. For example, we switched web hosting providers. The new web host costs $500 per year (compared to $99 per year for the old one). But the magazine will save money and time overall, because the new host is much more reliable and I won’t have to pay a tech $1,000 per year to fix the problems caused by the cheap-o service we used to use.
I’ve also looked at the long term, and used the “what-if” scenarios to develop strategies to ensure that we’ll be a survivor no matter what happens. That means having a plan for emergencies, building up savings, reviewing and sometimes renegotiating contracts, etc. That’s good too.
In the past few months of thinking about this, I’ve come up with literally dozens of small changes that have made the business more profitable. Some of them are big ideas that will take months or even years to implement. A lot of them are penny-ante things. But even if they don’t add up to a lot of financial difference, it has been worth the exercise simply for the improvement in efficiency. Because I’ve been forced by economic conditions to re-evaluate everything, the business has been improved — tempered by fire, in a sense.
So I am glad for the challenge. The slump, downturn, recession, or whatever you care to call it, has been a good thing. Once in a while a little bump is good to shake you out of your complacency. Our advertisers will get better service from us, the business will be stronger, and you’ll keep getting Airstream Life magazine.
So never mind what’s happening on Wall Street this week. Don’t get paranoid and start stocking up on beans, Band-Aids, and bullets. Plan to thrive on the downturn and you’ll be one of the first folks to smile when things turn around.