How the economy hurt my business and what I've done about it
of hurricanes, loss of income, and power outages
I've been in business for fifteen years. By myself, I own and run a small bed and breakfast in Louisville, Kentucky. There's a lot of work involved, but I'm a workaholic (why else would I sign up for the Hub challenge?) and I love the the whole idea of bed and breakfasts. My first year in business I only had a 17 % occupancy rate, not bad when you consider nobody knew I was here. Rooms sold per year divided by Rooms available per year = Occupancy Rate.
When I finally got listed in the phone book, got written up in a few travel books and cookbooks, and coerced the local newspaper into doing a story on me, my business started to increase. By the time the first year was over, I was up to 32%. Then I learned how to write HTML code, got a domain name, and constructed and published a website. I joined a couple of B&B associations, and got listed on as many accommodation sites as I could. By the end of the second year my occupancy rate was up to 48%.
My business continued to
flourish and peaked at around 68% occupancy rate, which is very good
even for a large, established hotel. I managed to stay on top of things
for 14 years, and then all of a sudden the economy turned bad and my
business started to fall off. There had been some ups and downs over
the years, but it all managed to level out by the end of the year.This time it was different.
2007 was the worst year I ever had. We had no bookings in
December where previously, although slow around holidays, we had at
least had 20-28. But this last December we had absolutely nothing.
People weren't traveling. It was just after the election, and they
weren't sure what was going to happen. In January, except for a
week-long power outage during an ice storm which didn't affect us, we
had a couple of bookings and that's about it. The week of the ice storm
saved us. People had no electricity and were looking for places to stay.
All of this came on the heels of a devastating $11,000 loss in September due to Hurricane Ike. Although it had hit the south hard, Ike was not through reeking havoc as it traveled northeast. It barreled into our city with a vengeance, toppling down beautiful old Magnolia trees struggling against 80 mile an hour winds, pulling down huge limbs from stately Walnut trees, and devastating everything in its path. It stripped us of roof shingles, wooden fence slats, and worst of all our electricity. We had a power outage across the city, in random areas, that lasted for three weeks. Because New Orleans was having such a tough time, Louisville had sent all its electricians and equipment south to help out. There was only a skeleton crew left to try and light up our city again.
The Ryder Cup golf competition was in town in September and all of the hotels, motels, and bed and breakfasts were filled. We had waited all year for this week. We raised our rates, as we did with all major events, insuring the necessary extra income we needed to make it through the year. All of my rooms were rented. Things looked good, until alas, It turned out that my B&B was in an area in town that lost its power. Not only did I have to find rooms for my potential guests and lose that income, but I would have to refund their deposits. In addition, all the food in my refrigerator and freezers spoiled, my roof was damaged, and half of my backyard fence was blown down. The crowning blow was having to live with candle light for an entire week. I couldn't read, and my computer and TV wouldn't work. Fortunately I have a gas stove, so I could cook.
This, coupled with the Hurricane Ike debacle, left me with a situation unlike any other I'd experienced since being in business. I now had to focus on coming up with some creative ideas to keep from going under. I was getting very little business, which meant no cash flow, no salaries. I was without a job and on the verge of losing my business. But calling on a resilience and a tenacity I have, which comes from I don't know where, I sustained my self by concentrating on "getting out of this mess" . Following are ten strategies I employed to try and save myself:
1. Cut back on employees. 2. Cut back on the amount of food I served, simplified the dishes, and made everything from scratch. 3. Dipped into my savings. 4. Cashed in an annuity. 5. Gave up having my hair done, pedicures and massages, and put my health club membership on hold. 6. Took advantage of a policy I didn't use often: took deposits ahead of time (for cash flow). 7. Came up with some new marketing strategies: travel packages, two nights for the price of one, and emails to my repeat customers with ideas about cheap get-aways. 8. Designed and executed a new website. 9. Concentrated on SEO. 10. conferred with colleagues about what they were doing. What I did not do was lower my rates, except for the special packages and offers. I didn't give up. I didn't panic. I used the extrra time to develop positive ways to deal with this adversity. And it seemed to have worked.
Things are a little better now. I still am somewhat behind financially, but I have a positive outlook and I know I'm on the right track.
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