language

What Would You Do If You Lost Your Job?

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Bargaineering recently asked: What Would You Do If You Lost Your Job? from Blueprint for Financial Prosperity

Indeed ’tis a knotty problem for most people. But for me, it’s not so difficult. You see, I have my own business, so if I lost my own job, then I’d have to fire myself. At one point, though, I was considering not hiring myself: I was costing too much for the company.

To explain, our business is a small language school in Taipei. We’ve been around for about 7 years in several guises, but since September 2006 we have experienced a sudden slowdown in our business, due to larger numbers of students exiting the program at the older age levels. Naturally, this wasn’t unexpected, but there was weakness in several other segments that didn’t make up for the exit of so many students.

Result: an unhappy proposition as our expenses remained static, but our income dropped by about 10~15% y-on-y (enough to wipe out our profit margin!). Since then, we’ve acted to minimize our cost structure as much as possible by cutting out everything that wasn’t ESSENTIAL to the operation of the business. Out went food subsidies which was cut to 0%, then we cut out non-essential refunds, and so on; but, eventually, though we had to re-organize our staffing structure. Three staff members were either terminated, asked to reconsider their job with us, or reassigned duties. In fact, we had expected two of them to take their job more seriously or take on a new set of duties than they had, but they chose to quit instead.

At one point, though, I was considering firing myself, because my contribution to the business couldn’t be financially rewarded. I thought this would be a good way to offset the expenses, but I was persuaded out of it, as I was a revenue generator for the school.

Throughout the whole period, it was quite unsettling, but I’m glad that we went through it. I don’t know longer term if our business will survive, but we have learner or relearned the importance of financial goals, as well as professional and business goals. Before that, we weren’t as focused on managing our financial assets as we were on the teaching side of things. Now looking back, all of the partners are aware of how much money we frittered away on non-essentials. Kinds of makes us a little queasy.

But then valuable lessons never come cheap.

The Four Sins of Running Our Business

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I’ve been reading the 10 stupid mistakes made by newly self-employed. It’s a good list that all business people should look at! I think our business has made several of them at least recently.

There are four that are worth looking at in my context. Click on them to read about them in context at Steve’s website.

1. Selling to the wrong people.
2. Spending too much money.
5. Assuming a signed contract will be honored.
9. Failing to focus on value creation.

We’ve had over the years some very troublesome customers, yes, even customers who we treated very generously, with free samples, free materials (a considerable expense to a language school), easy payment terms, and generous price reductions. However, these self-same customers have on occasion thrown them straight back in our face. We found out that we had been selling to the wrong people, and we had spent considerable time and money selling to them.

We’ve also spent quite a bit of money on the wrong things. Our first mistake was to hire too many people to work for us. Our increased use of staff led to bigger budget requirements, in staff and in taxes, for us. This would have been alright. We thought that the staff hiring would help us, but in some respects, it has actually hurt us much more because it impacted the nature of our marketing. People had heard we were good, so they came to us for their schooling. However, they often came looking for a particular teacher partner. Perhaps the staff didn’t have quite the same attention to their kids as they had expected, so they left disappointed in some ways.

Unfortunately, when we hired staff, we also found problems in number five. Our staff failed to understand that they were continually expected to be responsible for themselves, show up for work promptly, work hard, whatever. Staff however are human, and they display some of the quirks for laziness, gossiping, tardiness, etc. We failed our staff and ourselves by not recognizing the problems earlier and dealing with them. Moreover, I think we failed to manage some members of our staff due to language barriers.

We have been trying to create value on our product, language teaching, but I think our biggest failing has been not getting the message out there that our teaching works, that our students do get results, and that it is good value for money. All of these are challenges in themselves.

Kenneth

Running Our Business

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We’ve been running a business (a language school) for over 6 years, and it’s grown from a very small base into a much larger concern than originally it was. Naturally, in business life, there are the ups and downs of the operation and the cycle of business. We’ve become aware of this.

Yesterday, though we noticed that the number of our enrolments had dropped in September, so we are still trying to analyze the situation. But anyway our moods at school have been dropping this past few weeks because of the antics of one of our staff members. So this just added icing to that cake. We are currently not profitable as the business goes right now, which feels like a real slap in our face.

I recently took back more or less complete financial control, but the hard part of our business is predicting future income (as I guess any) so to discover enrolments are down was quite a shock to me. This will naturally make the next few months more difficult than they would otherwise be.

We were planning to do so many things, but now we need to focus on our core essentials, and we need to develop our marketing skills. So I have decided to dedicate this website to my search for business and financial success. I’m hoping that its successes and failures will encourage other readers to try.
Kenneth