04/ 02/ 2007
by Lena Basha
Don't just sit back and celebrate when a competitor folds. Cash in on all they left behind.
Mark Bright believes that one man's trash is another man's treasure--especially when it comes to competitors' phone numbers.
The owner of Tacoma, Wash.-based Northwest Auto Services has found a gold mine of new business by purchasing phone numbers of closed competitors--and recycling their old customers.
Bright came up with the idea almost two years ago when he heard that a rival had closed its doors after more than 20 years in business.
"Traditional advertising just wasn't doing anything for us," Bright says. "We weren't even regaining the cost of the ads. The phone number seemed like a good alternative--especially since the business had such good exposure. I didn't know if it would work, but I knew I had to try it."
A few phone calls later--one to the former business owner who offered the line for free and one to the telephone company to reroute it--calls from unsuspecting customers were pouring in.
"The line had been dead for almost two months, but we still got 10 calls the first day," he says. "After that, the leads just started coming in. The jobs were small, but it was definitely enough to justify the $14 a month charge from the phone company."
Bright says it's important to keep your ears open to the buzz in the community, which is how he landed his second phone number a few months ago. "I overheard somewhere that another automotive repair shop was closing after four years in business, so I looked in the phone book and saw that the company had a full-page ad," he explains. "Talk about some leads."
Bright approached the owner and made an offer he couldn't refuse: In exchange for the business' phone number, he offered to take over payment of the ad.
"He immediately said yes," Bright says. "I pay $550 for the ad each month, but I make that back in a week with the new jobs we're getting."
To turn a folding business into a business opportunity, you have to be on good terms with the business you're looking to cash in on, says Kevin Stirtz, a Minneapolis-based business consultant and author of Marketing for Smart People (Kaplan Business, 2006).
The way you handle the new customers is also important. Bright drafted a script for his receptionist to use when calls come in from his new lines. "The first thing we do is introduce ourselves and ask who they're trying to reach," he says. "If it's one of the other businesses, we explain the situation and let them know we can offer the same services. At that point, there's no confusion. It's seamless."
In fact, business is so good that Bright plans to hire new technicians this year to keep up. "I've been very lucky," he says. "I always say that if it looks like a great idea, then try it. Don't be afraid to try something--or you never know what you'll miss."
Scoop It Up
A phone number isn't the only commodity available when a business closes its doors, says Kevin Stirtz. You can find great customer leads--and great deals--on much more.
Customer lists: Expect to pay a premium price for these gold mines of customer leads.
Equipment: Buying used is cheaper than buying new, and it could help increase your business output.
Location: Looking to move or expand? Consider taking over the lease of a business that's closing shop.
Inventory: Get a good deal on a closing business' inventory, especially if the owner wants to dissolve quickly.
Employees: They're looking for jobs, so if you're ready to hire, search this already-qualified workforce first.
NFIB.com
Find more unconventional ways to expand your business in "Strategic Planning" in the "Managing Growth" section at www.NFIB.com/toolsandtips.
