11/ 21/ 2005
by Emily McMackin
You can control a lot when it comes to your small business. But many obstacles on the horizon threaten your future—a changing economy, corporate competition or encroaching technology. Instead of being at the mercy of what you can’t control, take a lesson from these small-business owners. With some creativity and guts (traits you’ve likely drawn on before), you can reinvent your business into something better. By being innovative and adapting to change, these small businesses found new galaxies to conquer.
Dave Haness, president of Country Club Lanes in Sacramento, Calif., still remembers the Saturday night he walked out of his office at 9:30 to a harrowing sight––a quiet, empty bowling alley. Bowling leagues, the lifeblood of the business, had been on a steady decline since Haness entered the industry in the late ’70s. Businesses around him had resorted to price cutting and dirty tactics to attract the diminishing group.
Haness had always been able to keep his 48 lanes filled. But as work commutes increased and league bowlers aged, fewer were willing to practice at later time slots. The business was headed for the gutter. “I was absolutely sick,” he says. “I threw up my hands and said, ‘This is it. I have to figure out a new direction for this facility.’ ”
Gazing at his empty lanes, he had an epiphany: Why not cater to recreational bowlers? “People had the attitude that if they were good at bowling they could do it, but if they were bad at it, they weren’t allowed to,” Haness says. “When we took the sport out of bowling and put the social aspects back in, it brought in a new wave of people.”
He started by targeting occasional bowlers in every demographic with commercials. “When you make a total change in your business, you can’t just live by word of mouth,” he says. “We wanted to say ‘Hey, this is for you, not just league bowlers.’ ” Haness then borrowed almost $1 million to renovate the facility with vibrant colors and an automatic scoring system, invested in bumpers––inflatable aids in gutters to help children knock pins down––and banished all “bowling alley” references in favor of “family entertainment center.” “A ‘bowling alley’ reminds people of Fred Flintstone or Al Bundy and their cronies,” Haness says. “It has a dingy, dark sound.”
When glow-in-the-dark bowling set to strobe lights, fog machines and music evolved, Haness knew it was “right up my alley and what I was going after.” He bought lights and a sound system and hired a deejay. He took his biggest risk yet when he sent a 24-team league packing to open lanes on Friday nights for the more profitable glow-in-the-dark bowling.
Going in such a drastically different direction was scary, Haness says. “There are never any guarantees. But you just have to sit down and use common sense and understand what’s happening in your industry,” says Haness, who looked to national trends as he made changes to Country Club Lanes. “And then you have to have inner strength and believe in what you’re doing—and you’ve got to stick with it.”
Other risks paid off, too. Haness turned an unused meeting room for leagues into a prize arcade for children and traded his full-service kitchen for a snack bar and a laser tag facility for birthday parties and corporate functions. With so many diversions to compete with, Haness knows his biggest commodity is selling fun, original entertainment at his 77,000-square-foot facility.
Changing a business that had been around 46 years was scary for employees, too. “I’ve got 80 employees, some who’ve been here since the business opened. Their futures were definitely something I worried about in the evenings.” But instead of holding back, Haness implemented policies unheard of at other bowling centers, such as charging bowlers for time spent in lanes instead of the number of games they rolled. Haness offers unlimited pizza and drinks for parties, but unlike other bowling outfits, he refuses to discount admission because that would “teach customers that the value of bowling is nothing.”
While neighboring bowling alleys have shut down, Country Club Lanes exceeds its revenues each year. Haness even paid off the 10-year bank loan almost a year-and-a-half early. He says he owes it all to his leap of faith. “If you’re too scared or indecisive about the right plan of action, maybe you should rethink things. But if it makes sense, and you can’t wait to do it, it’s time to try.”
Merging the Old and the New
When Gary Parks began selling document storage and retrieval systems in 1973, business forecasters were already predicting his demise: They envisioned a paperless society by 1980. Wanting to stay ahead of the curve, Parks jumped on the technological bandwagon in the late ’70s, adding mini-computer hardware and software to his stock. He soon realized his mistake.
“It was a painful experience,” says Parks, owner of ASR Systems Group in Liverpool, N.Y. “We ventured into an area where we didn’t have the expertise.” The software required continuous tweaking to fit customers’ needs, and Parks ended up with a backlog of requests that cost more time and money than he’d anticipated. As profits shrunk, he gradually backed out of the venture and shifted his focus back to his core business––selling folder systems and movable horizontal and vertical shelving. “Diving into high technology can be expensive,” Parks says. “You shouldn’t do it because it seems like the thing to do or because everyone else is doing it; you should do it because it’s right for your business.”
Fast-forward 30 years. Today, electronic document management is becoming a staple at hospitals, insurance agencies, banks and other industries that used to rely on paper files. To push his company forward, Parks knew he needed to revisit the idea of selling a technology solution. So when a document-imaging software manufacturer approached Parks three years ago about representing its product, he was interested––but cautious. His past experience with technology made him wary.
Parks ultimately decided to add an electronic systems division because he wanted to offer his customers more options. Lessons he learned from his past venture helped him avoid the same mistakes this time. With the software manufacturer providing technical support and a sales rep with computer expertise on his staff, Parks didn’t have to worry about the hang-ups he dealt with before.
Moving into the electronic realm took some adjustment, even for a business with years of document-management expertise. He learned that installing software required more planning, modification and follow-up than putting in an automated system. “If you haven’t done it before, it’s a little scary because you don’t know how long it’s going to take,” Parks says. “You make an estimate, give a base quote of a certain number of hours and hope to be able to make it all work.”
Parks attributes his success this go-around to starting small and merging the technology with traditional storage and retrieval solutions to give customers the best possible package. He also continues to seek new markets for the traditional products on which he the foundation of his business and his profits still depend.
“We’re still in the investment stage (of electronic document management),” Parks says. “It hasn’t been particularly profitable for us yet, but we’re sticking with it because we know for sure that it will be an important part of our future.”
Recipe for Success
Two tickets to a fancy, New York food show. It seemed like just a trade show at the time, but Steve Ehlers didn’t know then that his willingness to embrace new ideas––like those he discovered at the show––would mean the survival of his family’s neighborhood market in Brown Deer, Wis.
Steve and his father, Larry, sampled delicacies like brie and green peppercorns on the trip and picked up ideas that would help them hold their own against the supermarkets that eventually came to town. Turning their corner grocery store into a gourmet food market ensured their success for 15 years––until high-end supermarkets and whole food stores took over. “You come to the realization that you don’t have the money or space to compete, so you have to do something different,” Ehlers says.
While Ehlers still sells fine food products at Larry’s Market, the bulk of his business now comes from corporate catering, gourmet gift baskets, a specialty cheese counter and a full-service deli. “We’ve always had that aspect of service,” Ehlers says. “You can sell a lot of different kinds of products to customers if you’re offering the same quality of service. I learned that from my father.”
When Larry Ehlers bought the store in 1971, it was still the traditional grocery he’d started working at in the ’40s with an affluent clientele from Milwaukee’s north shore. “The customers who used our service had maids and butlers, but as their kids grew up, they wanted to shop for themselves,” says Steve Ehlers, who grew up making deliveries for his dad.
In the late ’70s, supermarkets emerged. About 10,000 square feet bigger, these super stores could fit the corner grocery into one of its aisles. Business was stagnant.“You see the writing on the wall,” Ehlers says. “That’s where the business started to change and grow into different things.”
He and his father decided to fill their stock with the gourmet products they’d sampled at the food show years before. They set up venues where customers could taste croissants, French bread and imported cheeses and preserves. The venture didn’t come without risk, especially for Larry who worried about abandoning customers he’d grown up serving. Some were disappointed, and a few workers who weren’t willing to make the switch left.
By the time Steve took over the business in the early ’90s, Larry’s Market had established itself as a store that carried products no one else had, from Perrier mineral water to Carr’s table water crackers. But the boom faded as specialty food distributors pervaded the market. Once again, Larry’s Market had to adapt. “All of the sudden, products we sold that were special weren’t so special anymore,” Ehlers says. “We had to ask ourselves what we could do to keep moving forward.”
He found the answer in an unlikely place––the past. Instead of delivering groceries like he once did, Ehlers decided to cater to customers by catering meals. He expanded the kitchen, hired chefs and offered them an unlimited pantry. Now when products don’t sell well off the shelf, “we have creative chefs who can do something with them,” he says.
His best ideas come from listening to customers. Ehlers searches for exotic products they request and replicates dishes they remember from their travels. He sells brown bag lunches and sets up a grill every Friday to draw employees from a nearby office park.
Ehlers boils his success down to flexibility and making changes at the right time as well as “having an open mind and a plan of where you want to go."And never missing a food show. “We get out and look around to see what others are doing and where we could have the edge in Milwaukee,” Ehlers says.
