How To Start A Small Business With Less Overhead Costs | Ep #112
So you want to start a small business, but you are nervous about the overhead of opening a physical space. Hold tight because host and Career Transition Coach Shannon Russell is breaking down the differences between mobile-based businesses and brick and mortar storefront businesses on Episode #112 of the Second Act Success Career Podcast. Listen in for examples of different types of small businesses, as well as pros and cons to having a physical location versus operating a mobile business.
Shannon also shares a recent experience she encountered with her brick and mortar business which caused her to pivot and now she operates two mobile-based businesses. It’s all on Episode #112 of the Second Act Success Career Podcast.
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Second Act Success Career Podcast
Season 1 - Start A Small Business With Less Overhead Costs | Ep #112
Episode - #112
Host: Shannon Russell
Transcription (*created by Descript and may not be perfectly accurate)
33 million, 185,550. 550. This is the number of small businesses in the United States alone in 2023.
If you have ever thought about opening your own business. Then listen in
today's topic is all about how you can open a business without the overhead of a brick and mortar building.
today's topic is all about how you can open a business [00:01:00] without the overhead of a brick and mortar building.
That's right. We will be discussing mobile businesses. And why this just might be the idea that you have been looking for when it comes to creating a second act career that fits easily into your current lifestyle. When we think about business. We often think about big corporations, the nine to five grind, having no autonomy and long, long hours.
Yet with a small business, we often think about it being a mom and pop type of business. With the flexible schedule, plenty of autonomy
and still long hours.
Too many small business owners, myself included. It's really a realm where commerce meets convenience, meets creativity, and it's all at our fingertips. We are in charge of what this business looks like. And no one can tell us any different.
However, there are a few options to think about when it comes to launching your own small business. So, if you are sifting through all of the choices that you have in front of you [00:02:00] right now, and you're thinking that the entrepreneur route may be it, this episode is really designed just for you.
I will be laying out what exactly a small business is,
how you can run a small business, that's brick and mortar with an actual storefront and how you can set up a small business that's mobile only. And what exactly that means.
One scenario of small business is a brick and mortar storefront location. This is where you choose the type of business that you want. You rent it, or you buy the space for the retail side of your business and customers come to you. You have an established physical address to run your business or your services? Some examples might be a clothing store, a restaurant, a salon. , anything that you can go to and physically buy something or buy a service of some type.
The other scenario is a mobile based business where you have no physical location, but instead you either work solely [00:03:00] online from your home or you bring your business, your goods or your services to other locations. Let me explain, because a lot of people think that mobile means your driving a truck.
You have an ice cream truck, you have a food truck. That is not exactly what mobile means. That is one type of a mobile business.
There are many others and that's what we're going to get into. The type of mobile business that I am referring to merely means that your business is mobile. So you can work from home or you can work in other locations where you bring your materials, you bring your products, you bring your services. In some cases you might run space at other locations, or you might bring your materials to a craft fair or a community event, or maybe you go into schools and offer your services, you go to other locations, bringing your business.
Some examples of mobile based businesses are simply online shops, right?
You're working from home. You have a website, you are selling [00:04:00] things mobily From your website.
Other examples are financial advisors who can work from home, marketing services is another example, cLeaning services, where people go into homes or businesses and clean. That is their service. That is their business. They don't need a physical address because they are bringing their services out into the community. You can also think about event planning.
You are bringing your services of planning the event to locations. Photographers, some photographers work merely out in the community at different locations. Maybe they are shooting outside at a park at a beach. Or they're coming into someone else's home.
To take photographs or even home health care is a really large mobile based business where you are going into homes To help people on a daily basis with their health and their home healthcare situation. Basically you establish your business online, you offer your goods, your products, or your [00:05:00] services online, or at another location. Makes sense. Okay. So we set up the two options that you can have when you're thinking about starting a small business.
There are definitely pros and cons to each of these different business styles. But before we get into that, My reason for wanting to make this episode of the podcast is to really share an experience that I had recently with one of my businesses.
This is what sparked me wanting to create this episode for you. And I just really feel like it could be a valuable lesson that, I just want to share with you.
, so to get into my story.
When I left my job as a television producer, that was my career for almost 20 years. And
I chose entrepreneurship as my second act career. I have spoken about this on the podcast many times, but for those of you who might be new here, I want to give you a brief rundown.
I opened a small business in [00:06:00] 2016 called snap apology. It is a franchise and it's a mobile based business.
This was a perfect scenario for me coming out of working in television and wanting to get into entrepreneurship, but never having. Really had the business side experience other than working in corporations and for studios and big budgets in the entertainment industry. I really had never worked in small business day to day, me being in charge of it all. So I wanted to ease into business and I also had a one-year-old and a four-year-old at home.
Which is another reason why I was transitioning out of television
because I wanted to have the flexibility of owning my own business and being home for my family.
This business is all about teaching children, stem education through robotics and Lego building. . So I would work from home and do the business, the admin, the marketing work all from the comfort of my home, with my children. And then my [00:07:00] team and I would go into schools and community locations. And teach kids our classes.
So I had no overhead. And the business really worked well because it was flexible with my home life. Now cut to a few years later when I decide that I want to grow the business more . And I want to open a storefront location. At that time, we were so busy teaching in the community. And I loved it. Everything was going great, , but I wanted to have a destination for my customers to come to
and do classes and have parties.
I really wanted to grow the business. So I wanted to have the community mobile aspect, and I also wanted the brick and mortar aspect as well.
It was really like running two different businesses at the same time, but it was working. The business was growing.
. I had a large team of employees, so we were able to really do both well and business really boomed even more.
I realized that, okay, this is going so well. I'm going to start another [00:08:00] business.
that is when I launched my Second Act Success Career Coaching business. And of course this podcast that you're listening to now.
. This business was also a mobile business because I can work with my clients virtually anywhere. I have clients in different countries. I have clients all over the United States. And I'm able to run that business from the comfort of my home office.
It's another example of a mobile business where you don't need a whole lot, other than an internet connection. To really serve your business. You're on the computer most of the day, but again, it's mobile and flexible.
now cut to a few months ago, all is going well, both businesses are doing amazing. We're really thriving. And here is when my aha moment comes in and the lesson that I really want to share with you. about a year ago, I began lease renewal negotiations with the landlord for my snap ology business. This storefront location I [00:09:00] told you about is in a strip mall. It's surrounded by other big stores. So the landlord is really just a large corporation, running things.
There's not one person that I go to for problems. . And that's how it's been for over five years. I really kept to myself, paid my rent and all was well. I Realized that my lease was coming up and I needed to start negotiations. I got someone on the phone from the big, bad corporation landlord and started talking about. When my lease is up, what the increase in rent would be per month, et cetera.
I agreed to it.
Everything was great.
We said that we would speak again and sign everything. When I near the end of my term.
Well, a few months ago, like literally two months ago at this point I began to get a little nervous when all of my calls were going unanswered
When I finally got someone on the phone from this company,
I was told that they refused to renew my lease [00:10:00] because they wanted this space for, and I quote a large national chain that would pay a lot more money. It came out of nowhere. I was so shocked. I was so confused because wait, this is my store. I paid thousands and thousands and thousands of dollars to build it out, to decorate it, to set it up to market it.
The whole nine yards. It was my business. Right. not really. I quickly realized that big corporations do not care about small business. I don't know if that shocks you. It probably doesn't, but oh my goodness. That was such a rude awakening the whole fear that big business takes over the world and it was coming really close to home for me.
Now I try to explain, Hey, I'm a mom of two kids. We serve children and families in the community. Please, what can you do? I pay my rent on time. Nope. They did not care at all. I swear. It was a 20 something [00:11:00] guy reading a script verbatim. That he was just given from his higher ups and he just kept reading it and saying the same thing over and over again, he kept saying, I appreciate what you're going through, but you'll have to find a new location.
I'm telling you, I said to him, You do not appreciate. Where I'm coming from. So please do not say that. You are kicking me out of my place of business.
Once I got past this outrage, I was overwhelmed with so many ways of emotion that I don't even want to get into here on the podcast. But I say this as a lesson and just a small, little friendly warning to you. What I've learned is that you can build a business of your dreams, but if you don't own it, 100% of it, the big, bad men of business can come and take it away.
And that's really what happened to me. As I record this last week, . I moved out of my store. I moved out with my family and my fabulous team. . It was a very stressful. Month or so I definitely had to [00:12:00] take a step back from this business that I love so much to really focus on that business so that it didn't break so that it didn't fall apart completely.
But I can say now that the bright side is that my snap ology business had been mobile.
Remember it was mobile. We were going out into the community.
We kept that part of the business intact and operating, even when we had our storefront location.
And because of that. We are 100% still in business And I really feel that that decision to keep that mobile side of the business was everything
to save us and to keep us still operating. I have a team of employees. I have people who depend on their work with me. Despite the fact that I depend on the money that I make from that business to feed my family,
as the owner, I am helping to feed. Other families. By employing people to work in that business. So the fact that it's still [00:13:00] operating, we are still in business. Really means the world to me.
We moved all of our materials into a storage unit, and I can proudly say that. the outpouring from the community from our customers has been. Just so overwhelmingly. Amazing. And it's just been so heartwarming to know that. People really do rally around small business. That was just everything I needed to keep me going,
Because it really would have been easy to just shut down shop and just say, okay, We were defeated. Let's close this down instead we said, no, this isn't that much of a change.
We just won't have a physical location for people to come to. And because we maintained that other mobile aspect of the business. We were really saved.
Now my customers will ask. Oh, are you going to open a new location? Are you going to move to somewhere else? And honestly, no, I will not be doing that because I realized that unless I can [00:14:00] actually buy a space, have a mortgage on a physical location
Then I will always have a lease.
I will always have rents and you know what someone else will always be in charge. I will never fully 100%. Own what I am doing and that. Scared me. Mobile business is. How I am running both of my businesses
and I feel fully in control now. And that makes me more confident as a business owner.
So I wanted to make this episode really to share the ups and downs of what I've been through recently with my other business, and I want to be transparent and show you. All the different sides of small business, because that is what you need in order to make the decision for your future in the best possible way.
So let's dive into it. I want to give you the pros and cons to both. Uh, mobile base, small business and a storefront physical brick and mortar location, small business.
All right. You're thinking about a small business. Let's talk about pros of a mobile based business.
Fewer overhead costs, right? You're going to have no rents. You're going to have no mortgage.
You may also have several tax deductions from working from home. If you set up a home office.
So really it's no overhead costs that can lead to a significant savings.
You also have the option to sell products or services locally or internationally? Where, if you have a physical location, Sometimes you're just selling to your community. having a mobile based business really means that the world. Is yours. It's really your oyster and you can sell as local as you want. And as far away, internationally, as you would like.
. The next pro and probably the biggest for all of us is flexibility.
You will establish a flexible work life balance. That works for you.
, You [00:16:00] make your own schedule. You decide how much you want to work. This is a really ideal scenario for a parents. Or for someone who's a retiree and just wants some extra income and, and something to do
. That flexibility that we all crave.
ANother pro for mobile business is that you get to know your customers through working. Out in the community, if that's where you choose or even interacting online more one-on-one. .
You get to interact more, if you have Maybe a chat feature or your just really hands-on and wanting that feedback and wanting to get reviews and making sure that your customers online are truly happy. but you also get to go out into the community. If you're out cleaning someone's home, or if you're, doing financial or marketing services online with people you're working with them. One-on-one you're really getting to know them. In a closer way more longterm. Same as if you're out [00:17:00] and about selling your goods or your products. .
You're still getting that interaction. Face-to-face whether it's in-person or online again, it's just that flexibility of building it the way that you want.
Let's get to the cons of mobile business. You might be working from home and you may need to convert space in your home to be an office. You might need space at home for your equipment or your materials. .
And it can definitely be a challenge in disrupting your family life.
It's figuring out what works best for your family, at what stage of your business. Now a storage unit is always great. And I definitely suggest that because the rent of a storage unit is so much cheaper. Than the rent that you would be paying to open your own store.
However, that is still a cost that, especially when you're starting a business, you may not have the money for those costs right.
In the beginning. So you just have to figure out. Where you will be producing your goods and where you will [00:18:00] be storing them.
And you also have to comply with regulations that pertain to a physical building, you might have to get certain licenses or permits, even though you're a mobile business.
You still have to set up your business in the same way, whether you're mobile or a physical location. So do not forget that step. That's very, very important when starting your business and really looking into all the legal. Accounting Tax side of things. When it comes to setting up your mobile business, it's very much still a business. So just keep that in mind when you're setting everything up the first time.
One other con that I do want to touch upon because I've had a lot of entrepreneur, friends of mine. Bring this up as something that they struggle with as a mobile-based entrepreneur. And that is the loneliness that you can feel when you work from home. if you are someone who really enjoys being around people and you like the comradery of being in an office, and being around [00:19:00] coworkers, then. That may get a little lonely and feel isolating for you.
Just something to keep in mind. As you build out your business, you want to make sure that you find ways to socialize with other people or to get that one-on-one personal contact from whether it's your customers, your clients, or just other people in your industry. That's a plus for social media that you really can find groups of like-minded business owners that you can connect with online and you can share your struggles. And what you're going through
That's just a way to, to flip that loneliness side of being a solo preneur. And hopefully that makes a difference.
All right. Let's get to the pros and cons of a brick and mortar business. PRo number one, customers still prefer to buy in store.
. Back in 2018, the us department of commerce estimated that only 14.3% of total retail sales. Occurred online, which [00:20:00] is really drastically low, if you think about it.
e-commerce sales have really been growing each and every year, especially since the pandemic where we were all forced to buy online, there's still such a demand for people to get out and purchase. In store, especially. So that is a huge pro for a physical location. . The next fact is that if you are selling physical products, you're selling in-person and it's a lot less crowded.
Whereas if you are on Amazon , you have a lot of competitors right in front of your face. So you might see an item and then right next to it as another item for slightly less. And you might just take that item instead. If you're in person, what you see is what you get.
And that is really good for your bottom line. So selling in person is less crowded. Also, there is something to be said about a physical location that brings that brand awareness and that legitimacy. You walk into a store and you say, okay, this place [00:21:00] is legit. I see what they have to offer. I'm talking to the sales person. I know what I'm getting when I walk in here. So that is definitely a pro when it comes to having a physical space. Next it's that face-to-face customer engagement, you are on Amazon and you are searching for a sweater. You might see that sweater and you might look down at the reviews to see what other people are saying about that sweater, but when you are face to face in a local boutique, You are getting to feel that sweater, you're getting to speak with the salesperson about how you can wear it or what colors it comes in.
And you're having more engagement. You're going to purchase something from someone that you're speaking to. Because of that rapport.
And that will show at the end of the year and European ML. . you have driven more and more sales from your face-to-face customer engagement.
All right, let's go to a few cons for the brick and mortar location, small business.[00:22:00] Of course it's the cost. Right? We talked about it earlier, the overhead. Setting up shop at a physical location. Costs a lot of money
and that is over and above your rent. . That's an architect. That's a contractor that's painters that might be a designer
Not to mention furniture, equipment
signage for the interior and the exterior of your store. . And then of course you have your utilities, oNe other significant con as well. Is that. You can have this physical space, . But guess what? You still need to have a very active online presence.
You may have people who look online to see your website before they step into your door. you want to not only have your online website, you need to have your social media. And that is sometimes another business in itself to really manage and take care of in addition to your physical space and taking care of the actual location that you're in.[00:23:00]
One other thing I want to mention too, is being present. Really makes your business succeed. Many of us don't have a big team, especially when we are starting out. So if you open your doors, you are most likely going to be the person who spends open to close at your location because you are setting up the processes for your team. And then when you kind of work out those systems, you can teach those to your employees, of course, and hopefully step back.
But in the beginning you will be spending a lot of time there.
That interim buildup is going to need your attention fully. Just another thing to think about when it comes to building out a physical space for your small business.
Okay. I hope that listening, a few of these pros and cons really helps you to see all sides of these two forms of small business. And honestly Having been part of both sides, I can sincerely say that both are wonderful in their own rights. And I'm a big supporter of [00:24:00] small business, no matter what it is.
I feel like there are pluses and minuses that all add up to one thing when it comes to starting a small business, and that is independent success.
If you want to be out on your own, I say, go for it. I'm telling you, It's not always easy, but it's all you. you decide what you sell, you decide what services you offer.
You decide how fast your business scales. You decide at all? . It's your business for me, I was looking for flexibility after years at a hectic, fast paced career in the entertainment industry. And building a small business is what I needed. I knew that I could take what I learned in my past. To build out my future.
I also saw where I was in my life as a mom of young kids. And what I could handle. On a day-to-day basis with all of that information, I chose my path. [00:25:00] But my friend, the bottom line is that you'll either work long hours for someone else making them money following their rules, or you can work long hours for yourself, making a living for yourself and following your own rules. It's your choice.
I want to leave you with one last thought. You don't have to make a decision now. . Please know that you hold the answer that you are searching for. You have the experience From the career you are in now from the jobs of your past. You hold that experience.
And you can bring it with you. To the next. It's really just a matter of taking a moment to sit in silence with yourself, to ask yourself what you really want
and what you want your future to look like for you.
Thank you for letting me share my story and my experience. I hope it shed some light for you
as you figure out your path to second act [00:26:00] success. I'll talk to you next time. Make it a great day. My friend.