100 years after the Titanic, we have another naval disaster, Costa Concorida.  All my condolences to the family off the victims.

This blog is not to support the captain, as I don’t have all the details off the tragedy, and this is just the reason why I write this blogpost.   The media…. They also don’t have all the facts…. It’s difficult to find some serious information on the tragedy, the only thing we hear is ‘The Captain has left the ship’  and the people are furious.  He is a ‘Coward’…  Emotional.

My first reactions are ‘Strange he left the ship so early, did all his officers followed him?  Did a second in command left also, the third in command, the Mate etc?

The ship lies very close to the shore, impressive images, but the ship was not navigating so close.  It was after hitting the rock formation, the captain gave instructions to turn direction off the land.  I am sure this would have helped to save many lives.  Next to where the ship is lying, you will find an underwater  ravine (reason why already 2-3 times the rescue actions where stopped). In case the ships would have sunk over there, more people would have been death and it would be look more like the Titanic catastrophe.

Here’s an excerpt:

A San Francisco cable car holds 60 people. This blog was viewed about 3,000 times in 2011. If it were a cable car, it would take about 50 trips to carry that many people.

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But is is really good for your local business?
They say, it let people discover new places in town.
They say it is a social buying
They say, more customer, more profit

What is the reality?

About discovering new places in town, this is true, but that is it.  When I talked with our customers, it was clear that they did it for the 50% reduction, as this is the minimum we must offer) AND it is also true that our collegues/competitors also offer good services.  It would be stupid to think that my Spa is the only good one in Geneva.
After the clients used their offer, they are happy, but only come back if is convinant for them.     So on this part you loose. => No Customer Loyalty

Another point, which maybe small business don’t take care off enough, it is the cashflow.   Groupon and clones pays out the total amount of money at the end of the offer.
Example: When you make an offer for 200 coupons, valid for 4 months, Groupon pays out 50% of 50% afer a few days and the other 50% of 50% is paid after the 4 months.
This means during the 4 months you need to be sure you have enough other customers to pay the rent, the salaries, electricity, water, products etc.
For cashflow this can be hard. => Bad Cashflow destroys your company

If you noticed, i wrote 50% of 50%, this is correct, as you need to offer at least 50% reduction, from the other 50%, Groupon takes 50%.

Example:  when a treatment cost 150 euro, and you will get only 37,5 Euro.
Some clones they play with the percentage, like BuyClub in Switzerland they take ‘only’ 30%.
If you check this, you must work without profit.   for 37,5 you can’t give a perfect massage, using the quality products and paying a person for 1,5 hours.

An other calculation:
With groupon you will get more customers, true, the 200.  Probably you want get the 200 customers otherwhise.  But, you don’t need too, to reach the same turnover, with a higher profit margin, you need only 50 customers instead of 200. (50 x 150= 200 x 37,5)
=> Numbers of clients is not the most important thing of a good running company, CashFlow, Profit, etc are.
Groupon and Clones are killing free competition.
What is happening in Geneva right now.  Beauty Salon 1 is offering 50% on manicure and pedicure, a lot of people go there to ‘discover’.  Then the offer is finished, those people goes back to there orignal place.  Nobody is winning Beauty Salon 1 is not making big profit, they only work a lot.   Beauty Salon 2 losses customers.
Then Beauty Salon 3 is doing the offers, etc etc. => Only a few will survive, i hope you are one of them

Do the Loyalty test
When we took over the spa, the Spa was using a groupon a like.  So I asked the customer to enter the client file and I offered them 30% reduction if they come a second time for the same traitment.  Only 1 % used it.  On the contrary, all our existing customers, 60% is booking again after a traitment.   I don’t need to do another calculations to proof my point.

Conclusion
When working with Groupon and Clones, you put your company in a dangerous situation.  The customer is very happy, yes they get reduction and even if it is not good, they will get a reduction in another place.  In this story, where do we talk about you, your business?

Groupon and Clones can be good to promote a new service, when you are unique in the city, but be prepared not to gain money.  The cost is the same as doing ordinary publicity with 1 big difference.  With the offers, people try out the service which is the best selling point.  But due the high reduction, everday another one, customers don’t come back as promised by them, the custoers are buys discovering other places.

In my case, we stopped working with them, and we follow up our customers.  We have more profit and we have growing numbers every month of new customers,  so my conclusion is simple.  You don’t need them to make your company big if you take care of your customers,  they need us to make there business run.

Are you using Groupon or Clones for your business?  What is your opinion? Do you have good or bad stories?

PS I will write soon about alternatives and also some information how they sell you their contracts….. (the little lines not always nice)

First some calculations
To reach a turn over of 1 million a year, that is 83.333,33 a month, or 27.39,72 a day.   Huge numbers, knowing many people have to survive with only a few dollars, or euro,…
Average money spent in the spa by customer is around chf 100, a premium contract with yabbedoo is around 150. Meaning I need around 22 customers a day. Almost 1 customer an hour, 24 times a day.
Where am I? The good news is that the Yabbedoo SA has been created in Geneva and the Spa is running and I make profit.  Cashflow in the spa is good, updating the cashflow decission for Yabbedoo right now to guarantee that is keeps stable and growing in the following months, the statistics are all growing.
So a lot of good news, seems I have a success stroy……but we I am not reaching the foreseen turn over a month.     Thhis means that every month I am under the 83.333 I need to have a month that makes more turnover.  The longer I wait to reach the turnover by month, the more successfull the next months has to be.

What did I learn: It is clear that a simple calculation by month is not the right one.  If I would know I can do 83.333,33 a month for sure it wouldn’t be a challenge.  I started from ZERO.  So a more accurate graphic would be, first months slow, then growth growth and then reaching the goal.

I also learned that Cashflow is one of the most important keys to reach the goal.  I had many discussion in the Spa about cash flow,  the same discussions are going on with Yabbedoo.   Cashflow can make or destry your company, it is even more important than the profit.

Anyway, the following months I want to see changes, and you will changes too,  The previous month I was working hard on talking about our products and services to future clients.  VISIBILITY was the key word. The following 2 months I will concentrate on closing down contracts, attracting more customers,  lets call the new keyword  SALES

Will I reach my goal, to win the challenge?
I am still confident I am,  I have a great team, I have 2 companies set up, future clients are positive etc.   Looking to the numbers alone from the previous month you should become depressive, but knowing that reaching a goal is not realting on the past, it is also the present and having a realistic viey on the future

Anyone out there who want to enter the challenge?   I can set up a leatherboard, showing the world where we are etc?  Commom, don’t be afraid

Or maybe I can ask you a favor….. How can you help me to reach my goal?  Any ideas, any recommendations, any collaborations?

Many books and high level schools write about how to be positive all the time about the company towards your staff.  I full agree. But last week the issue came up that my stafff was asking about the financial situation of the spa. 

The reason they came with those questions was simple. Before I took over the spa, they where a beauty salon, almost an industrial one. A lot of customers (as they gave big reduction to attract people)  etc.   We took over the spa for the interior, the location and the rent contract, not for the customers and staff.  So we changed the whole staff (except one)  and we changed the way we offer services to our clients.
Today, everyone is relaxed, the staff and customers. We build in free slots in the agenda, so the staff can eat and rest etc.  But we also have less crowded spa.  Anyway big changes and there no Mister, staff is talking between them, about before and now.

So the question came up that it seems we have less customers, so we must have less profit etc.
I knew this wasn’t true, yes in number we have less customers, but the average money spent by person doubled in less then 3 months.
Yes it seems we have less customers because we have more private traitments then manicure and pedicures (which are in an open space).

Next to all this, as running 2 businesses, I am a man of the numbers, of statistics and graphics.  Cash-flow, profit, numbers of clients, average spending etc.   So every time I start up a company I quickly install those statistics in a way I have access to it anywhere, everywhere.  So this happened also in the spa.

I made a decision to show this part to the staff, not by giving them access, just showing.   I didn’t know what the reaction would be.  Those girls are not used to see financial graphics, numbers way above there salary etc. And sharing financial information is still a table.  Ask you entreprenial friends how much cash flow they make

Surprisingly, the reaction was very positive.  I think for several reasons.
- the numbers where not that bad
- I explained them some numbers, they have now a different view on the spa and what I am doing behind my tablet and pc,  I took the staff seriously, I involve them.  This time I was only showing the numbers, but later I will create some graphics they can see by themselves.
To push them to get to the next goal, like a game.

Personally I think it is good to talk about the financial situation onto a certain level. Let them feel the company is growing, or on some parts not doing well.   Make it a game, they know I am following up and I made goals, I get them involved in the goals, the spa becomes partly of them.  

The next goal is for a bottle of champagne for the staff, if we reach a certain 3 zero turn over number a day.  

I can tell you, it is working…. and I will have even better statistics to show in the future

Website: http://www.FloatSpa.ch

One day, several years ago, I had a dream, a project.  I wanted to proof that I can become a famous entrepreneur.  Selling was easy no, you just talked to the people and take the cash.  I was around 9 years. It worked like this.  I sold the overstock of garden furniture of my father in 3 days.
Can you imagine how proud I was.  Those 3 days are the start of my dream, to become a famous rich entrepreneur.

Meanwhile many things happened, I started companies, sold companies and started new once.  Am I rich and famous ? Not yet

I was on the right road, but one day, a friend (not anymore)  broke my dream by stealing money from the company account, with a fake signature.  I had to start whole over again, from 0. I didn’t worry, as I did it before, why not again?

For the moment I run 2 companies, a spa/beauty center and a B2B company for the travel industry.  The spa is a local business in Geneva (http://floatspa.ch) and the other is international internet business (http://business.yabbedoo.com)

The nice thing about running this 2 companies is to switch from local selling, where you meet the people and talk to people, to the international selling with Yabbedoo, where I most of the cases don’t know who is buying or using my services.

The following blogposts will talk about my experience while running the 2 businesses, sometimes I will talk what happened in the past, not to much as I always concentrate on the future.
As with many blogs and articles about entrepreneurship, this blog is also 1 story of the millions others.  But I was learning from the other stories as well, so why not tell my story.

The title is I had a dream…. well the fact is I still have that dream.  As long as I dream I will stay entrepreneur.

Enjoy the reading…..

I am also surprised to see that the Petroleum Industry has there own Major Industry Number.

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Tesco Homeplus Virtual Subway Store in South Korea

Yes, the challenge is started, this is day 1.  Not a good day to start on a saturday,  but making a company with 0 turn over to a company with 1 million turn over in 365 days doesn’t seem to be easy neither  Good I like a challenge.

The company exist, we have set up a SA in Geneva and the main platform/services is created.  The fact is this was the easy part, setting up a company in Switzerland is straight forward, SA, sarl, independent etc, it doesn’t matter.it is easy.

Making the service/product also as it was in my mind.  But what I see in a lot of startups is the issue of selling, to marketeer, to generate cash flow.  This is the main reason why I started this challenge as also for me it is difficult (looking at my previous experience of starting up companies).

About the company.  The name is Yabbedoo , based in Geneva, Switzerland (I live also in Carouge/Geneva) Yabbedoo connects the hospitality businesses with the digital world, doing everything it takes to provide faster, cheaper and friendlier services.
Building a successful relationship between yourbusiness and travellers!

You have to see Yabbedoo as a cost sharing vehicle, our members can use our tools for free.  One of our ‘killer’ selling point is a Concierge APP for the industry (iPhone, Blackberry, Android, Windows7) for only 150 CHF  and the App is  completely branded for the member (even the name in the APP stores will be the name of the member)

So please enjoy with me this challenge, I even hope someone tries to beat me, competition is a good stimulator) , follow me on this blog or Twitter: @frederik_vl or Google+

Let the games begin!