John and I have been busy running a chain of cell phone repair shops for the last 5+ years. During that time, we’ve developed relationships with companies and people in China who supply us with many of our parts and accessories for our stores.
Coming out of Chinese New Year, it was clear from every message we were getting from China that things weren’t normal over there. Factories delayed opening for a week, then until early March, and now until April 8 (still the current date when factories we are in touch with plan to reopen, although this could change at any time.)
It was clear by early February that there was going to be a significant shortage of parts in our industry. We stocked up on parts, buying through May, when we typically keep only a 1-2 week supply.
For a couple of weeks, I watched as the wholesale industry got decimated while consumers acted as if nothing was wrong. The stock market even went up! I knew it couldn’t last forever, but I’ve been burned before by calling recessions too early. I called the 2008 recession in 2006, and I called this most recent one in 2018.
I strongly believe this will turn into a recession. Even if China gets back online in April/May, this is a 9/11-style event for many businesses. I lived through 9/11, which happened while I was working at Sun Microsystems. Corporate travel restrictions meant that for several months, airline travel dipped dramatically.
Throughout this entire scenario, my motto has been Prepare, don’t panic. I urge you to adopt a similar strategy. To that end, I’m going to get you ahead of the news. What should you start thinking about now as a business owner?
First, especially if you live in a major city, it’s critical that you have a plan for what to do should you (and all your employees, if they live in the same area) be quarantined in your house for 14 days or more. I understand that right now this seems far-fetched. Unfortunately, Covid-19 does not seem like it will die out any time soon. It is different from SARS and MERS in that it has a long incubation period without people displaying any symptoms of being unwell.
China implemented what are currently seen as drastic measures, shutting entire cities down and forcing people to stay at home. However, as years pass, we will understand that without these drastic measures, Covid-19 would have spread much faster. Even now, experts say that Covid-19 is not really “stoppable”–the best we can hope for is to slow it down long enough that a vaccine comes into play. Quarantines will help slow the spread of the virus. That means: prepare for a quarantine.
Understanding Force Majeure: What Is It and How Does It Work?
Many of us have contracts, such as rental agreements, manufacturing contracts, and more. Should a quarantine come into play and materially affect your business, there is a clause in most contracts called force majeure. If you’re like most business owners, you probably haven’t really paid attention to this.
I strongly recommend you start reading those contracts now and understand what it means if your business is materially unable to continue for a few weeks (or longer.) For instance, you may be entitled to not pay rent for the duration of a quarantine event in your city.
Now, let me be clear: There is a lot of gray area in the above statement! Do not assume anything based on what I’ve said above. Instead, take the time to open up leases or other large contracts you may have and read the force majeure clause. One of the key components of many force majeure clauses is that you have to give the other party notice, for instance.
I’m writing about force majeure for two reasons: 1) You, as a business owner, should be aware that invoking force majeure is a possibility instead of potentially losing your business due to failure to pay rent or otherwise make good on a contract due to Covid-19; 2) You should be aware that in many cases, invoking force majeure requires notice.
Please consult an attorney with experience in force majeure before taking any actions in regard to the above. If not handled properly, you may be in breach of contract. I am not a lawyer and nothing I have written constitutes legal advice.
Check Your Liability Insurance
Now that we’ve covered force majeure, now is also the time to read the fine print in any commercial general liability insurance policy that you may have. Here again, you may be entitled to a payout if your business premises are forced to close due to a quarantine in your location.
Now would be a good time to buy anything you need before June 1, especially if parts or all of it are manufactured in China. Keep in mind that most packaging is made in China, too, so even if a manufacturer has a part, they may not have the package for it.
On the flip side of this, if you can wait on buying something until the end of the year, wait. I think we will see some good deals once production ramps back up and supply chain gaps have been filled, as business spending slows down and producers need revenue to continue financing their operations. Just keep in mind that if you wait, you may be waiting until next year.
Some Silver Lining in the Clouds
Out of every negative event comes some positive changes. The negatives are well-covered by the mass media, so here are some hopes I have for how the coronavirus will positively change our world:
More working from home. I bought some ZM (Zoom Video Communications) stock last week, as I think video conferencing is going to hugely benefit from Covid-19.
Reduce air travel, especially international travel and especially for business. Just like 9/11, I expect we will see a decline in air travel for quite a while. I list this as a positive since air travel is so terrible for our environment. I’d like to see businesses embrace more remote meetings as a way to reduce time wasted traveling and commuting.
Reduce unnecessary consumption. I hope Covid-19 will cause both consumers and businesses to take a second look at how much they are spending on unnecessary items. To be clear, I don’t wish food or basic necessity shortages on anyone! However, when throwaway, single-use, or otherwise “cheap” items become unavailable due to supply-chain shortages, I hope we will see some trends toward longer-lasting, higher-quality items instead. (Use the cups you already have, for instance!)
Better health practices. In the past few weeks, people have become aware of how many people die from the flu annually, and that most of us are not washing our hands correctly. I’d like to see better health practices across the board to make us healthier as a society.
Better sick leave practices in the U.S. Once we understand how much our current “must come to work, even if you’re sick” practices are costing us as a society, I hope we can get employers and government alike to understand that people need to take time off if they’re sick. That time off should be paid, up to a reasonable amount of days per year. As of this writing, too many employers do not offer any sort of paid sick leave at all.
Better healthcare in the United States. Putting on my rose-colored glasses for this last hope: I would like to see this as the catalyst for the U.S. to start serious adoption of a better healthcare system. I could spend an entire blog post and then some talking about how bad our current system is, but I’ll leave it at this: I would like to see us adopt something similar to Canada here. Maybe this is what it will take for more Americans to agree with this sentiment.
If you’ve found this blog post helpful, and/or would like to see me continue writing in this space, feel free to email me at erica AT erica DOT biz. I try to stay a few days or weeks ahead of the curve, and since I have direct contact with folks in China, I’m happy to continue writing from my perspective as a business owner who does significant business there. Remember: prepare, don’t panic!
For a year now, I’ve been systematically “replacing myself” at our repair shop business, 1Up Repairs.
1Up has been the most successful business I’ve ever owned. This year, it will do over $3 million in revenue!
For the past 4 1/2 years, I’ve been heads down, in the weeds, doing everything from marketing to answering the phone to running the front counter.
We have done something rare in this day of “online everything”–we’ve built a successful physical business. We have real estate leases, payroll, and customers walking through actual doors. Crazy, right!?
And we’ve done it thanks to John’s operations excellence, my Internet marketing skills, and the amazing team of 20+ people we’ve hired.
In the meantime, I’ve broken out of my introvert shell. Running the front counter and being on my feet all day has made me confident in having conversations with people.
Funny story: The other day I went to a local food trailer park for lunch. The guy running a popular food truck was complaining about his iPad being broken. If you’re not familiar with food trucks, they live off those iPads. It’s the way they accept payments and tips, and also their order taking system! So when that iPad breaks, it’s a big problem.
I identified the problem immediately: the battery in the iPad had swollen, and the screen was popping off. Yikes! I let the owner know that we fixed iPads, and that we worked with many food trailer owners in Austin. (We even have three repair trailers of our own!) And I dropped him a card.
He seemed surprised at first, but later, when I came back to pick up my food, he was stoked to see me again. With a big grin on his face, he said “I’ll be seeing you about that iPad!”
A few years ago, I would have never dreamed of this type of interaction. Now it’s something I do on a regular basis–and it’s given me more self-confidence.
What I Want To Do Next: Help You!
I genuinely enjoy helping other small business owners. Whether you have a physical business or an online business, your struggles are real! And sometimes, you just wish you had someone to talk to. Someone who’s “been there, done that.”
That’s why I’m opening up a limited handful of “Unstuck Sessions”. We’ll do a 1-hour session together. In that hour, I guarantee I’ll find you a shift in your business that you can implement to grow your revenue. That way the session will be a net positive revenue for you. Then, we’ll spend the rest of the hour brainstorming together on how you can implement that change.
I’ve done this for both my own businesses and others’. If you’ve ever wanted to do a 1:1 chat with someone who has made millions of dollars, both online and in the physical world, this is your chance.
I haven’t been writing as often on my blog lately. People often ask, “What happened?”
The truest answer I can give is that 1Up Repairs, our chain of repair shops, took off beyond our wildest imagination. We now have six stores and will do several million dollars in revenue this year.
Running repair shops is not what I expected I’d be doing with my life after running a funded software company previously. But honestly, it’s been really good for me. It’s been 3 1/2 years since we opened a single store in the middle of Austin, and what a ride it’s been.
It’s also been nearly a year since John and I committed to getting me out of the day-to-day aspects of our repair shops, and getting back into writing, shooting informational videos, and coaching. We’ve mostly succeeded at this point, which is why you’re starting to see new blog posts from me.
Shonda Rhimes and Her Train
I’ve been reading Shonda Rhimes’ book, “Year of Yes.” (If you don’t know who Shonda Rhimes is, she’s the creator of “Grey’s Anatomy” and several other top shows for ABC’s Thursday night lineup.)
In it, she talks about how she writes for several of her shows. Her shows, she says, are like a train:
“Every single writer I met likened writing for television to one thing—laying track for an oncoming speeding train. The story is the track and you gotta keep laying it down because of the train. That train is production. You keep writing, you keep laying track down, no matter what, because the train of production is coming toward you—no matter what.
Every eight days, the crew needs to begin to prepare a new episode—find locations, build sets, design costumes, find props, plan shots. And every eight days after that, the crew needs to film a new episode.
Every. Eight. Days. That train of production is a’coming. Every eight days that crew on that soundstage better have something to shoot. Because the worst thing you can do is halt or derail production and cost the studio hundreds of thousands of dollars while everyone waits. That is how you go from being a TV writer to being a failed TV writer.”
That train is her pressure. That’s how she performs every week. Is her writing always perfect? No, but it’s arguably always good, and even more importantly, it’s done on time.
Success Often Comes When Your Back Is To The Wall
I’ve read countless biographies of successful entrepreneurs. One concept that often comes up in the beginning, when they were just getting started, is a driving force–a motivation so deep that failure isn’t an option.
This is my chance to be contrarian: I don’t think for many people their initial motivation was a lofty goal of changing the world. Sure, it becomes that later. But for many people who are successful–including me–their initial driving force was to get out of a bad situation.
Howard Schultz, the self-made billionaire who built Starbucks into a global empire, says: “Growing up I always felt like I was living on the other side of the tracks. I knew the people on the other side had more resources, more money, happier families.
And for some reason, I don’t know why or how, I wanted to climb over that fence and achieve something beyond what people were saying was possible. I may have a suit and tie on now, but I know where I’m from and I know what it’s like.” (Howard Schultz interview)
When I started my hosting company, my primary motivation was not having to go back and live with my parents, which I saw as a failure. That motivation drove me–it kept me up late at night writing code, creating ads, and building our website. Six years later, I sold the company for $1.1 million.
With 1Up Repairs, we took on a lease in a highly-visible area. The landlord had me put my house up as collateral. You better believe that was a huge motivation for both of us. If we couldn’t make the store work, I was going to have to sell my house. Long story short, we smashed it out of the park and 1Up Repairs became my most successful business to date. It makes more revenue and profit than my hosting company did when I sold that.
Shonda Rhimes has her train. Howard Schultz desired more money and a happier family. I had my fear of failure, and then my fear of losing my house. These sorts of gut motivations may not always be pretty, or highly aspirational, but they’re what drive entrepreneurs to huge successes.
Most People Don’t Want The Uncomfortable Truth
Here’s another hard truth: If you live a relatively decent life now, and running a business won’t add much to your quality of life, you won’t start a business. Or you’ll start it and wonder why it’s not flourishing.
The answer? You don’t have your back against the wall. You don’t have a huge motivation to become something you’re not.
That’s hard to hear for a lot of people. “Well, I’m not risking my house/family/life!” I totally understand. Shonda Rhimes doesn’t have a fear of losing her house driving her. But she does have an entire crew depending on her. That creates the same pressure that squeezes out a successful business.
Your motivation can be negative (I’m going to lose something huge if this doesn’t work) or it can be positive (the world needs this, and I’m the person who can provide it.) It can be internal or external–Shonda Rhimes’ is external; people depend on her.
So how do you create this driving force or motivation? You have to decide for yourself that wherever you want to go with your business is so much better than where you are now that you’re willing to make huge sacrifices.
What Has To Motivate You
If you know that starting a business is what you want to do, you must internalize that it’s not going to be easy, but the result is going to be worth it. You must be able to continually make the decision to go outside your comfort zone. In order to be successful, you must be more driven by what’s possible than by what’s comfortable.
This is difficult. It’s why most people don’t succeed. They think, “What’s the harm of spending another 30 minutes on Facebook?”
They can’t hold themselves accountable. And they don’t have enough of a driving force, a burning fire, a motivation to make it work.
Make Better Choices
Every day, when you wake up, you have a choice of what to do. Just like you (probably) are, I’m addicted to social media. Social media sites like Facebook employ thousands of people whose job it is to capture our attention for as much of the day as possible. Like cigarettes or caffeine, Facebook taps into our brain and sucks our motivation away. All so it can show us ads and make about $12 a year off of us.
Nine years ago, I wrote about passionate disgust and how I use that to create businesses. I refuse to let staring at social media continue to suck hours out of my life. I’m ready to create instead of consume. That lights a fire in me.
Creating is harder. Building a business is harder. It’s easy and fun to post on social media and count your likes. But it’s an empty high.
If you’re really motivated to leave your mark on this world, or even just give yourself a better life, you have to move social media to the back burner and put the time in to create something real. Something more challenging than a quick, flippant post.
Take some time after reading this post and figure out what motivation looks like to you. You have my permission to make it totally personal if that’s what drives you. There’s nothing wrong with being driven to make your family’s situation better. It’s exactly how Howard Schultz got started.
What, exactly, is going to force you to close Facebook out and stop watching TV? What’s going to be so motivating that you will step out of your comfort zone on a regular basis? What does that really look like to you? Get detailed. Get personal.
That’s where your successful business lies–right in the middle of that burning pit in your stomach.
Many people make to-do lists or apps into a complicated slog. They write long blog posts or videos with detailed guides on setting up to-dos.
This isn’t that.
I find I end up not using complicated to-do lists or apps. I need to keep it simple–the simpler, the better.
I also needed a weekly to-do list that was accessible anywhere I go. I always have my phone with me, so I wanted something that would work on my phone.
And hey, it doesn’t hurt when it’s free to use!
Given those criteria, a few years ago, I set up a system using a free app called Trello. I keep it simple: Trello is available as an app on my phone (works on both Android and iPhone), at trello.com, and is also an app for both Mac and Windows.
Here’s a quick, 8-minute video of how I use Trello to create a weekly to do list:
In case you’re curious: Yes, I really do use Trello in this manner pretty much every working day.
I address this in the video, but just so it’s in writing as well: I didn’t get paid to make this video, and I don’t have any sort of financial relationship with Trello. In fact, I don’t pay for Trello either–I use the free version. I made the video because I’ve seen way too many people overcomplicate to-do lists, and I would love for you to see how easy and simple a weekly to-do list can really be.
On a personal note, I’ve cleared up a significant amount of time so I can start creating more blog posts and videos. If you’d like me to answer a business question you have, or share more about how I set up my “work life”, please feel free to email me (erica at erica dot biz) or ask in the comments! I do read every email and comment.
You may have wondered why I haven’t blogged in so long–until this week! The answer is pretty simple: 1Up Repairs exceeded all our expectations in terms of revenue and growth, and between that and learning how to be Mackenzie’s mom, I didn’t have time to really type out a blog post. We were running full-speed ahead just trying to keep up with unprecedented growth.
To give you some idea of how fast we grew, in 2013 we did $x in revenue, which was a solid “1-person business” number. In 2016, we did 20x our 2013 revenue!
By a large margin, 1Up Repairs is the most successful business I’ve ever bootstrapped, and I’m so proud to have helped breathe life into it and help it grow so quickly.
We have 9 fantastic employees now, 2 franchise investors (just signed our second one!), and we’re profitable. In 2017, we will turn a corner and start replicating what we have. All those systems we built over the last 2 years–now’s the time to put them into action and build more stores, hire more staff, etc.
My creative passion with growing businesses is in the first part–getting them off the ground. We decided together in November that with where 1Up Repairs was, and what I wanted to do, it didn’t make sense for me to continue full-time with 1Up. I’ll still help with getting more stores off the ground, but I really wanted to get back into marketing, blogging, and coaching full-time. With the business no longer needing as much of my specific skill set, I saw this as a good opportunity to step back into an owner/board member role instead of an active role running stores or building more stores.
All of this means that 2017 is the year of NEW for me. NEW is my #themeword for 2017 — a concept I came up with in 2008 and that has since gone viral. The goal is to come up with one word that you think will describe the next year for you–a “theme” for the year.
NEW means I get to work with other entrepreneurs and help them grow, transitioning from 2 straight years of building a bootstrapped business at a breakneck pace. John continues as the full-time CEO of 1Up Repairs, with new investors and new stores to build!
And as for me? I was surprised how much I missed coaching. I help people build scalable businesses. I can help with hiring employees, marketing/copywriting, conversion optimization (setting up a conversion funnel–something so many businesses need help with!) and deciding how to get capital to grow a business.
So many business owners think that what they need is capital, but often it’s about more effective allocation of resources. I learned a lot from John, who came from the restaurant industry, in this space. We went without some things that I’m not sure many businesses would dared to have done–like not spending a lot of money on storefront signs, for instance. That saved us about $6,000 at a time when we really needed it–and we poured that money into more accessories, more stock on phones so we always had parts to get most repairs done same day, etc. I consider myself frugal, but this was a whole new level!
But we made it without having to borrow very much money at all. Instead of sweating about paying off debt, we aggressively invested back in what was working. We tested conversions on marketing and shot down anything that didn’t make money, with the result that the marketing channels we do use are insanely profitable for us.
Making Marketing Work for You as a Business Owner
Many business owners will throw what I would term “feel-good money” at marketing–stuff that the people selling it would say benefits the community, or helps attract a certain demographic. We tested many of those marketing channels–ONCE. We tracked absolutely every call or customer that came in from those. (How? We had a few really good ways, I’ll say that!) If they didn’t pan out, when the salespeople called back, we’d give them the actual numbers and politely decline to continue to advertise. We left a trail of disappointed salespeople in our wake, but if I showed you our marketing spend vs. our sales, your eyes would probably bulge out of your head at how little we spend to make what we make.
That sort of tight, almost Scrooge-like mentality about spending made our stores profitable to the point where we had quite easy conversations with potential franchisees who wanted to come in. To be honest, it also resulted in some heated conversations about where our budget should go. John learned to relax a bit on small expenses, and to allocate more resources to test various marketing channels as revenue grew. I learned to make even tighter funnels and cross the boundary of being able to track conversions from multiple online and offline marketing channels, all the way through a diverse funnel (since we’re retail.) Considering the wide variety of ways people can find us and come in, the system we built does a pretty good job of tracking what works!
That’s what I’m most passionate about building for businesses. Whether your business is entirely online or a mix of online and retail like ours, most business owners are terrible at tracking where the money goes. And yet you have to be great at it, because it can be the difference between a business that barely stays afloat and one that throws off hundreds of thousands of dollars a year in profit to you!
In 2017, I’m ready to take some business owners with existing businesses and take them to new heights with their business. I’ll really dig in to find out what’s working and what’s most profitable for your business–and where you can put your dollars to maximize your revenue and profit. This is the #1 thing I wish I had as a business owner. I look back from where I am today, and how profitable this business is, and think “Wow, if I had this 13 years ago, I would have made an extra million dollars or three.” That is not hyperbole.
So many business owners are overwhelmed by options when it comes to marketing and sales. Facebook ads, Google ads, webinars, flyers, Facebook group posts…and to make matters worse, there are a million “gurus” out there that teach one of those methods as if it’s the holy grail. And it might be…for the person selling the program! But I see the need for business owners to have a marketing and growth coach to help you decide what’s most effective for your business, and then put a plan into place to track spending and verify what’s working through conversions. That’s where I come in.
Growing your business? I’m launching my coaching program under my freedom.biz domain name. I’m putting together an elite group of business owners who are interested in being part of a tight, supportive group of people committed to taking their businesses to the next level. If you’re interested, sign up here.
Just getting started? I’m also excited to recommend Ramit Sethi’s course on starting an online business. He helps you come up with the right idea and take your first steps to making money. I’ve known Ramit for many years and he practices what he preaches–these are the same techniques that helped him grow a multi-million dollar business. Sign up here for his free “Bucket List Challenge” and start building your own business!