Social Recreational Dance Business Operations

Small business must "sell" it's way out of trouble

A small business, such as most social recreational dance businesses, can only sell it's way out of trouble. 

Yes, some costs can perhaps be cut.  But often/usually cutting the cost also means cutting the revenue or cutting the revenue potential.

In small business, since they normally operate fairly lean with little fat, cutting costs means cutting meat; and thereby reducing the health of the business instead of improving it.

A small business trying to cut costs to get out of the hole is almost always just digging the hole deeper.

Cutting costs is not growth or success

"Getting out of trouble by cutting costs" is not the same as "growth".

Selling, not saving, is necessary for growth.  And growth is necessary for success, and usually even for survival.

This is of course "obvious".  But many businesses, small and large, sort of deny the obviousness of it because they have not found a way to adequately do it. The need for growth is a monster problem.

But then what?

But then of course, after the big business has done its cutting, it must get back to doing what is required for growth: selling.

Cutting costs is generally simply an interim move in preparing for new selling strategies.

Big business can "save" it's way out of trouble

Ford, General Motors, ... and many more:  You see it in the news frequently:  a large company is going to reduce expenses; by reducing overhead:  facilities, personnel, products, projects, promotion, ....

A large business can cut costs and save it's way out of trouble.

What to do when you get in trouble

It's a rare business that does not get into trouble some time.  No one wants to, but it does happen.

When it happens, the key question is, "What to do now?"

There are many different sorts of answers to that question. I address a couple at this time:

• Save your way out of trouble
• Sell your way out of trouble

Competition does matter

All social recreational dance enterprises, even if it is the only one in town, have competition.

Consider dance-lessons business, for example:

Place-competition & Teacher-competition:  If someone is not taking dance lessons from you or your place, who/what are the alternative teachers/places they could consider?

Activity/time-competition:  If someone is not taking dance lessons at all, what are the alternative activities and time-uses they are doing and thinking of doing?

Expenditure/budget-competition:  If someone is not spending money on dance lessons, what are the alternative uses for the money they are spending and thinking of spending?

Growth depends on sales

"Growth" means revenue growth; and that means more sales.

Exceptions to the rule

There are of course exceptions; as there to every rule.

We all know of businesses, such as small, old eating places, drinking places, retail stores, even some dance businesses, that have been surviving for a long time without growing.

To understand how they do that, look at their expenses; especially those that tend to be the most difficult to cover:  facilities, personnel, advertising, living expenses of the owner, and other fixed-cost overhead. 

Do these surviving places pay rent or a mortgage; or is the property paid off?  Do these places pay employees or contractors; or is it family labor?  Do these places pay for advertising; or do they rely on other methods to bring in business?  Does the owner need to cover living expenses from the business; or are they covered by other income sources? 

Businesses which have low or declining expenses do not require growth for survival.

But most social recreational dance businesses have expenses that, for one reason or another, grow over time, and thus, in order to even survive, their revenues must also grow.

Survival depends on growth

In saying that "success is about growth" I'm also saying that "success depends on growth".  "Success" means not ending up in the same condition as you started.  Success means "no gain, no success"; or "no gain, big pain"; if there is no growth we can't really call it a success.

But the even greater importance of growth is that survival depends on it.  Not only does success depend on growth, but also "survival depends on growth".

Success is about growth

Old joke:  Do you know how to end up with $1 million?  Start with $10 million.

But of course that is not success.

Success is to end with more than you start with.

Unfortunately in a social recreational dance business it is sometimes easier, and at times more common, to end with less than one starts with.