Guest blog by entrepreneur, broadcaster and trainer Joanne Sumner who runs a successful coaching, yoga and holistic therapy studio in West London.
When I decided to set up my first business, I had no experience whatsoever. I had worked in a university, the NHS and a wealthy charity and making money was never a requirement (I suspect those days may be gone now!) I decided to set up a business not because I had a brilliant plan, or had spotted a lucrative gap in the market; I had no miracle product. I started a business because I couldn’t see any other way to get the freedom I wanted to work on the projects I chose, with whom I chose, when I chose. I wanted to make a practical difference in people’s lives and to do it now!
I think most people would think that was staggeringly naïve, and in some ways I agree. A business after all, often requires us to put aside personal preference and look at what the numbers are telling us regarding customer take up, margins and the bottom line.
Nevertheless, here I am 7 years later, with three profitable businesses and a distinctly happier self.
Business #1: A Yoga and Coaching Studio (JoanneSummer.com)
Funding source: Savings (perhaps £3,000), a loan from family (£1,800), a part-time consultancy role (£1,000 a month), a partner (mortgage and bills).
Because I changed field dramatically I had retraining costs of approximately £5,000, which ate up all my savings and a loan from my family. I staged the training taking some of the shorter courses first so that I would have services I could bring online as soon as possible and I got a part-time consultancy role that provided experience and subsistence money until I could bring enough offerings out to create a ‘proper’ business.
For three years I reinvested everything I earned back into the business and this has paid off hugely. For example, I paid for the very best branding support I could afford and have not needed to change it since. I employed a coach and participated in masterminds to fast track my business strategy. I networked extensively to keep advertising and marketing costs low and focused on building a local reputation. Most of my marketing continues to be word of mouth from one customer to the next.
The benefits of this approach were the flexibility it gave for me to find my way with which therapies I wanted to offer and to test which products my ideal clients were interested in. I was able to respond quickly and creatively to changes in the market, and established a wide range of services very quickly. The main pitfall was that without my partner to pay the mortgage and bills I’d have been out of business in the first two years.
What I learnt? Don’t wait for your plan to be perfect. Create a vision of where you’re going and take the first step. You can adjust course as you go along. But get the best quality help you can as soon as possible.
Business #2: A network for female entrepreneurs (The Athena Network)
Funding source: A bank loan (£10,000), credit card (£2,000)
4.5 years in to being self employed, my husband was at risk of being made redundant. I needed to boost my income quickly and the opportunity arose to buy a franchise with a well-established network for women. It fit into my existing work because I was already running networking meetings for local entrepreneurs – and in fact it was a way to monetise something I was already devoting considerable time to for free.
It cost approximately £10,000 + VAT to purchase the franchise and I applied and received a bank loan for the core sum and put the rest on a 0% credit card. It helped to already know a local bank manager, because she knew and trusted me. We discussed the operation and expected figures of the franchise, supported by materials from the franchisee, and I was able to apply for a loan.
The process was in fact surprisingly easy and swift, requiring only a short application and a phone call. The factors that supported this were a pre-existing relationship with the bank manager; an existing profitable business; evidence of the franchise being successful in neighbouring areas, and that I kept my application in the smallest loan category and placed the balance on a credit card. Had I gone over the £10,000 mark a different application process would have been required and the money might not have been forthcoming.
The benefits of this approach were that I had the capital to buy a franchise which had proven systems and operating procedures. It also meant that a lot of the thinking had already been done and I could get stuck in to the ‘meat’ of the business straight away.
What I learnt? Don’t be afraid to talk to your bank manager! And if you don’t know them, that’s a priority. The process was smooth and simple because I was already considered a safe pair of hands, and it was just a question of whether the proposition stood up too.
Business #3: a network marketing company in the health and wellbeing industry (Arbonne)
Funding source: credit card (£1,500)
After 5 years, it became clear that my long term dream required considerably more funding than my existing businesses could provide. The franchise has a built-in cap on how much you can make simply by virtue of the business model (x number of groups, with y number of members, gives a known potential profit from memberships for example). The studio could be reformed to generate considerably more but the modelling I did would require a greater change in the way I provided the service – to take more of my work online – than I was happy with. So I looked for another opportunity that would synergise with the two existing businesses but be capable of generating unlimited income.
Enter Arbonne International – a prestigious network marketing company. Based on leveraging time by growing a network of consumers and distributors of exceptional quality products, I would be able to grow a business very part-time to whatever income my skill and effort would take me to. I met and trained with field leaders with million and multi-million dollar businesses, and thought if they can do it, I can do it too. The system exists, the industry is exploding, it’s been proven to take a 5 year plan to get to the top and the earnings there are only limited by my personal development, application and skillset. The start up costs of £1500 were negligible for a business in a box, and it was possible to put the entire start up cost on a credit card and pay it back well within the first year.
What I learnt? Don’t let naysayers get in your way. If you can see it, and there’s a business model that is being shown to work, then find a way to make the initial investment and get on and do it. However, be prepared to give it time and delay gratification. It is a business like any other, and it takes time to fully understand your industry, your products, how to speak about them and how to sell them. Learn from the very best people in your field that you can and learn as soon as you can – that way you don’t need to make all the same mistakes. If a system exists already, you don’t need to invent a new one. Focus on your strengths and grow them, and find ways to outsource those things that aren’t your strength or learn the skills to get better.
Above all know why you’re in business and what you are trying to achieve and use that as the benchmark against which every decision is measured. The rest you can learn along the way.
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