Rooting for a Cold Winter: A failed attempt to predict the weather

The Attempt

In 2009, I co-founded my first business, Go Green Energy Consulting, helping homeowners be more comfortable at home and lower their energy bills by making energy efficiency upgrades to the home. Winter was our best season because people are very conscious of drafts and high bills. Leading into winter 2011, with business going very well, we were braced for growth and excited to capitalize on a bitter Michigan winter. We borrowed $50,000, invested in additional equipment and personnel, and printed boxes full of pamphlets urging our potential customers to "Stay warm at home this winter!"

What Went Wrong

It never got cold! In fact, it was one of the warmest winters in recorded history. The shockingly warm winter rendered our marketing messaging (“Stay warm”) virtually useless, and instead of growing, our sales took a major hit. Worst of all, we were extremely hesitant to change our messaging, since little did we know, it would suddenly get cold in the middle of the winter. Needless to say, this was a completely unforeseen obstacle, and we spent a majority of the winter struggling to reshape our strategy.

Lessons Learned

We solved the problem by gritting our teeth and grinding it out. While it was an extremely unfortunate setback, it was not the end of the world, and we were able to get back on track by mid-Spring.

The two lessons I take away from this experience:

1. Be both optimistic and conservative: As an entrepreneur, it’s imperative to set ambitious goals. At the same time, you should always respect the worst-case scenario, calculate your risks, and plan accordingly.

2. Don’t be afraid to dive in: Getting started, or investing in growth, can be scary. The best advice I can give is to dive in head first and start swimming. Unforeseen obstacles are inevitable, and no amount of planning can prepare you for them.

Story By

jacob

Jacob Smith

Jacob Smith loves all things Detroit and entrepreneurship. He is the Director of Business Development at UpTo, an emerging social calendar platform. He co-founded his first business, Go Green Energy Consulting, as a senior at the Stephen M. Ross School of Business at the University of Michigan. In his spare time, he manages online content for world-renown humanitarian Dr. Rick Hodes and serves in an advisory role for United 2 Heal, a nonprofit organization in Ann Arbor.

When Do You Kill a Dying Business?

The Attempt

It seemed like the perfect plan. My business partner and I would open an art gallery to sell affordably-priced, original artwork. We would market it as cost-effective way for people to decorate their homes with original artwork, and it would be a huge hit. We purchased a large amount of wholesale, original artwork and rented a small storefront in an upscale plaza.

We put a considerable amount of time, energy, and money into getting our store ready to be unveiled to the public. Once everything was finally in place, we eagerly planned and marketed our grand-opening event in early June of 2011. Our hopes and spirits were high when the day of the grand-opening finally arrived. Everything seemed to be going as planned; we even had a reporter from a local newspaper there to cover the event. Everything was on track.

What Went Wrong

However, as the days wore on, it soon became apparent that everything was not going to be as simple as we had hoped for and carefully planned. After the initial grand-opening marketing push, business slowed. When I say slowed I mean died. Calling our footraffic a steady trickle would be a gross exaggeration. And, the customers who did come through the door did not buy the quantity we had anticipated in our business plan.

We tried many different marketing tactics and enticing specials in order to increase business. We even brought in some local artists to sell their "works of art" (yes we were desperate). Our efforts did help to increase business, but it was not enough to offset the building rent and numerous other fees which go into keeping any business alive. We were losing money. It finally came to the point where we realized we were fighting a losing battle. Despite the extensive planning and the seemingly good business plan, our endeavor was just not turning out to be successful.

After our art gallery had been open for little more than a year, we realized that the business was salvageable, if we wanted to invest a ton of time and money into it. But, it would also require me and/or my partner to walk away from successful careers in the hopes of making less money than we were already making. We came to the conclusion that we would close our doors.

This decision did not come overnight. It was a slow, gradual realization that what had seemed like a very marketable business idea to us, had not caught on with customers the way we had been confident it would. It was difficult to know when to pull the plug. But, as fees mounted and our cash decreased, we realized it was our only reasonable option. After a liquidation sale, where we sold off a majority of our inventory at bargain basement prices, we finally closed our doors to the public in late June of 2012.

Lessons Learned

No one ever goes into a business thinking it is going to fail.

Retail sales is much tougher than I thought. I really thought the art would sell itself. I love my services-based business.

There is no such thing as a passive business. Ownership needs to be involved at some level.

Being good at one business does not mean you will be good at another.

B2B business makes way more economic sense for a small business. Bigger sales typically mean bigger profits. You can only sell so much to an individual.

Killing a dying business is bittersweet, but the sweet significantly outweighs the bitter.

I made the final decision after I took a step back and essentially consulted myself. My advice to myself? "Great idea, poor execution, either dive in or kill it". I wish I talked to myself about the business six months sooner. :)

Story By

Ren Carlton

Ren Carlton

Ren Carlton’s, CPA and CSMC, mission is helping businesses and organizations operate at exceptional levels. Ren helps clients by pursuing bold goals, managing growth, and avoiding unnecessary risks. Whether you have a dysfunctional salesperson or an overly oppressive banking relationship, Ren can help. Ren combines financial savvy, entrepreneurial street-smarts, and unfiltered feedback to help organizations achieve their growth and profitability goals.

Fitness gone wrong

The Attempt

My goal was to open a fitness center where people would share camaraderie of working out together, sharing goals, and encouraging one another to overcome their personal fitness challenges. People often stated their fears regarding large workout facilities and lack of knowledge regarding weight training and use of free weights.

What Went Wrong

I opened a GYM. Due to my inexperience the facility was poorly arranged. My inability to manage and schedule properly, led to conflicts with classes and people working out on the circuit equipment. For instance, during yoga classes, weight lifters were slamming weights on the ground causing a disturbance. I never developed that friendship with my clients, and for as many that came through the doors, just as many walked out and never came back. A friend introduced me to the Power Plate ®, and after several training sessions I was convinced that training on the Plate was challenging, fun, and incredibly effective. Little did I know how beneficial the Power Plate® would be in achieving overall health and well- being.

Lessons Learned

The decision was clear-cut. I purchased three Power Plate® machines, downsized my facility, and transformed into a fitness studio catering to one-on-one personal training sessions specific to each client’s physical abilities. Our motto became “laughter is a must since humor is infectious.” I take working out seriously, but when laughter is shared, it binds people together and increases happiness. I pride myself on creating a fun, friendly, upbeat atmosphere where people enjoy transforming their well-being.

Story By

Casey Czuj

Casey is the founder of Vital Performance, the first authorized Power Plate® studio in Michigan. A certified Power Plate trainer, she is currently finishing her training to become the first Master Power Plate Trainer in the state of Michigan. You can follow her on Twitter at @caseyczuj.