Many people must cope with financial hardships, health problems, personal tragedies, and so on. Small-business owners are no exception.
In fact, when these types of challenges occur, entrepreneurs often bear an even bigger burden than others do at work, because they’re responsible for everything yet have limited resources to help shoulder the load. However, that doesn’t mean they can’t get through it — or even emerge from the difficult circumstances stronger than ever.
Take Juice It Up, for instance. The company, which has 14 employees in its corporate office, was hit hard by the recent recession. Conditions went from bad to worse in 2008, especially in states like Arizona and Nevada, where some franchisees not only struggled to attract customers, but also lost their homes in the mortgage crisis. Juice It Up closed 79 stores from 2008 to 2010. “It was just a very bad situation,” CEO Frank Easterbrook says.
Yet Easterbrook says he stayed positive and worked to ensure the company would pull through, largely because he knew that his employees and franchisees — some of whom had invested their life savings in opening their stores — were counting on him. “We didn’t want to give up. We didn’t want to let them down,” he says.
Today, Juice It Up has 81 franchises and four corporate-owned stores, down from 189 total stores at its peak. The commitment to surviving the downturn appears to be paying off: the company expects to launch two new franchises in the next month, and is on track to have 100 stores operating by the end of the year.
The Intuit Small Business Blog recently asked Easterbrook for his advice to fellow entrepreneurs about how to survive tough times. Here are his top six tips.
1. Be passionate about your business. “Anyone who goes into a tough time needs to really believe in their product and what they’re doing,” Easterbrook says. “You really have to have a passion. In good times or bad, you really have to like — you have to love — the product or the service that you’re offering and believe in it.” That belief will go a long way toward sustaining you when things seem to be at their worst. Otherwise, it’s too easy to quit and go do something else.
2. Surround yourself with good people. “If you don’t have good people who are committed to you and who share your passion, it’s going to be very difficult when you’re going through bad times,” Easterbrook says. He believes that the way to find and keep those people is to treat employees with dignity and respect and to adhere to a set of core values. “As the owner of the company, I’m going to do everything in my power to take care of them.”
3. Squirrel away some cash. Some of the Juice It Up stores that closed during the recession did so because they lacked sufficient capital reserves — the business version of a rainy-day fund. Easterbrook says he has reinvested his own money several times into the corporate operation to sustain it. When business is going well, don’t assume it will stay that way, he advises. Plan for rough patches, and think creatively when they occur. In Easterbrook’s case, that meant temporarily reducing or eliminating royalties and fees for his franchisees, helping them to renegotiate their commercial leases, and pressing forward with marketing efforts.
4. Be willing to change. The ability to survive hardships is often tied to the ability to change. “If you’re a good business operator and have a passion for what you do, you’re constantly trying to create something that differentiates you from your competition,” Easterbrook says. “We’re always looking to reinvent ourselves.” One of Juice It Up’s recent initiatives, for example, was to replace the ubiquitous foam cup with eco-friendly paper products. “It’s small, but it’s very important,” he says.
5. If at first you don’t succeed… You know the rest. Timing is huge for entrepreneurs. Easterbrook points out that a good idea can sometimes simply be a victim of bad luck or timing. Juice It Up introduced raw juice blends when everyone went ga-ga for smoothies. “I didn’t give up on it — persistence is a hallmark of a successful entrepreneur,” Easterbrook says. The company has since capitalized on new consumer interest in the raw foods movement.
6. Seek out the silver lining. Shutting down half of its stores wasn’t anything to celebrate, but Easterbrook says Juice It Up streamlined its business as a result. The downturn weeded out the poorest performers, particularly those franchisees who bought their stores as an investment rather than a business. Another unforeseen benefit: The company has been able to reopen some of the shuttered locations with new owners for “cents on the dollar,” Easterbrook says, because the landlords had not found new tenants and left the stores fully intact. As a result, Juice It Up has been able to capitalize on lower start-up costs, lower rents, better economic conditions, and higher-caliber franchisees with stronger ties to their local communities.