When most people think of recession-busting businesses, those based at home and certainly those in the aviation industry probably aren’t the first ones that come to mind. If the mega carriers of the world are having serious financial problems because of higher fuel costs and a cutback on business travel, could a smaller, home-based aviation outfit possibly survive, let alone grow?
In the case of Exquisite Air Charter, the winner of the “Worldliest” category in the 2007 StartupNation Home-Based 100 competition, the answer is a resounding “yes.”
Learn about the StartupNation 2008 Home-Based 100 competition
Rena Davenport founded the company as a brokerage service that connects well-heeled clients with private jet operators. Business is thriving because Davenport has taken deliberate steps to combat common issues facing any business in her knocked around industry. So far this year, sales have grown at the Thousand Oaks, Calif.-based outfit by more than 60%, and the coming fourth quarter is usually the year’s busiest period, points out Davenport optimistically.
Yet, in today’s crazy economy, no business is immune to financial challenges. Hurdles abound, including soaring gas prices, higher food costs, loans at a torpor thanks to the credit crunch, and gun-shy customers, stalling and sometimes cancelling projected purchases from small businesses.
So what are America’s home-based business owners to do?
Following are tactics some of our 2007 Home-Based 100 winners have pursued to fight the recession’s impact and manage to grow in 2008.
Flight to the Web
In the case of Exquisite Air Charter, the firm was faced with the reality of volatile fuel prices that would sometimes leave owner Davenport with supplemental bills of up to $8,000 after arranging a deal between a client and an aircraft provider. Additionally, in the wake of corporate cutbacks in spending, some industries, like real estate, significantly reduced their reliance on corporate jet travel. And those who once treated themselves to a private jet for a vacation have started opting for first class on commercial airlines.
“It had a significant impact on our business,” Davenport says, citing an overall decline in the private aviation market of 15% this year.
So Davenport turned to the Internet for solutions. She credits a good portion of her recent success to optimizing her Web site, a task she started on her own late last year. While buying pay-per-click advertising, which Davenport experimented with to the tune of $4,000, “didn’t generate a penny in return,” in contrast, her search engine optimization efforts paid off big time.
In fact, Davenport has tweaked her site to be among the top five listings on search engines when people type in search terms that describe her business. In August alone, the amount of month-over-month unique visitors to her site shot up by just over 400%, she says. And somewhere in there she finds her next customers.
“Internet users are starting to understand the difference between paid search results and organic search results,” she points out.
Green Begets Green
Sweet Onion Creations, the winner in the 2007 StartupNation Home-Based 100 “Greenest” category, makes eco-friendly scaled models for architects and developers out of mostly recycled material. While developers and architects are getting hit by the subprime crash and the whiplash affecting the commercial real estate industry, Sweet Onion Creations found a way to grow their model business.
Husband and wife team Jake and Lee Cook leaned on their “greenness” to build their revenue even in a down market. Wherever you look, and especially in the real estate industry, large companies are touting their green initiatives. The environment is increasingly more important to the general population, and these firms want to capitalize on that as much as possible. Bozeman, Mont.-based Sweet Onion provides products and services that easily fit the mold perfectly, you might say.
Leveraging their timely concept, the Cooks have placed literature around town promoting their business. A simple flier printed on recycled paper with tear-off tabs in a Bozeman coffee shop yielded two contracts for a green-minded Palm Springs, Calif.-based architect who happened to be passing through Bozeman.
The Cooks also established a partnership with nonprofit “1% for the Planet” that led to the formation of a sustainable-design scholarship at the University of Montana. This further entrenched Sweet Onion in the community and increased their exposure and prospects.
Sweet Onion’s owners have also added green services without much additional overhead. They formed a Web design/computer animation team that they can plug in or out as needed offering architects and developers the option of virtually showing their models to clients.
And what have these initiatives meant to Sweet Onion? How about revenue growth of 550% over 2007. The Cooks must feel as if the “down economy” is some kind of hip terminology for a “cool” economy.
Focusing on Your Core
This downturn impacts every industry, even some of the top enterprises in our StartupNation Home-Based 100. Take a look at Write2Market, a Top Ten winner in last year’s “Best Financial Performer” category. This copy-writing shop provides content and copy-writing services to businesses, one of the first areas vulnerable to budget cuts at companies operating in tough times.
The firm, which is run by Lisa Calhoun and based in Atlanta, has maintained growth by focusing on its core business…and even culling certain services from its menu.
“We’re saying “no” to work we would have said yes to last year, knowing we need to reserve ourselves for work we do REALLY well, so we can keep satisfied, long term clients,” says Calhoun.
This has helped Write2Market better hire, and fire, suitable contractors. These times have also prompted Calhoun to get an even tighter grip on finances, tightly monitoring quarterly numbers and collecting promptly on accounts due. For her, while her growth numbers aren’t overwhelming, a forecasted increase in 2008 revenues of close to 7% is definitely bucking the trend. That’s a pretty impressive figure for a business that caters to companies whose mar-com budgets get finicky in tough times.
The Royal Treatment
One strategy that these home-based business owners touted universally was supreme customer service.
Davenport, whose aviation business caters to clients’ special requests, such as organic in-flight meals, stresses that business basics like customer service are especially important during a downturn.
“If one guy drinks a lot of sparkling water and one guy drinks a lot of still water, you have to remember those things,” she says. “In a flat economy, you can’t afford to lose a customer because the water’s flat.”
So, while your first instinct might be to slow down right along with the pace of the economy, seasoned, successful entrepreneurs know that that’s the last thing recession-busting businesses do. Instead of crawling deep into a cave to wait out the storm, it’s time to be resourceful and let your inner entrepreneur come out.