The im­por­tance of fin­ish­ing what you start

You don’t need to try, try again. Just fin­ish what you started

Inc. (USA) - - DEPARTMENTS | CONTENTS - Norm Brod­sky

THERE’S A COM­MON MIS­TAKE many en­trepreneurs make once they’ve had their ini­tial taste of suc­cess. Long be­fore they’ve ex­hausted the growth pos­si­bil­i­ties of their first com­pany, they de­cide to start an­other one in a to­tally un­re­lated busi­ness they know noth­ing about, and they end up spend­ing time and money on it that should be put into build­ing their orig­i­nal busi­ness in­stead. The risk is that they’ll end up fail­ing at both.

Let me tell you about Craig Howe, a young mu­si­cian I know who started the Wil­liams­burg School of Mu­sic in New York City’s bor­ough of Brooklyn about four years ago. He put to­gether a fac­ulty of pro­fes­sional mu­si­cians who give in­stru­ment and voice lessons to chil­dren and adults.

The school has had a promis­ing start. Craig told me he has about 400 reg­u­lar clients, fairly evenly split be­tween adults and chil­dren. A sin­gle half-hour ses­sion costs $60, but al­most ev­ery­one buys a pack­age of lessons—five at $45 per ses­sion or 15 at $40 per ses­sion. The teach­ers, who work part time and have out­side mu­si­cal ca­reers, earn about $30 an hour.

Growth is driven mainly by word of mouth, although many peo­ple learn about the school when they pass its store­front lo­ca­tion on Bed­ford Av­enue, one of the busiest streets in Brooklyn. It also has Groupon and Liv­ingSo­cial deals that bring in prospects, about 70 per­cent of whom later buy pack­ages of lessons. In ad­di­tion, Craig has or­ga­nized work­shops in lo­cal el­e­men­tary schools and met with par­ent groups to en­cour­age more sign-ups.

Once clients sign up, they stick around—many have been stu­dents at the school since it opened, and chil­dren of­ten stay in mu­sic school un­til they go to col­lege. Adults, too, tend to re­main en­rolled for years, although some quit, for a va­ri­ety of rea­sons. “So what’s the prob­lem?” I asked.

Craig said he was both­ered by the amount of time that his premises weren’t be­ing used. He pays a rent of sev­eral thou­sand dol­lars per month—re­tail space in the neigh­bor­hood is among the prici­est in the coun­try. Be­cause the chil­dren come af­ter school and the adults af­ter work, mu­sic lessons hap­pen only from 2 to 10 p.m. “Know­ing how much I pay in rent,” he said, “it just kills me that no­body uses the place in the morn­ing.”

He had an idea to open up a preschool nurs­ery in the space. He knew I’d helped a cou­ple of women with a chil­dren’s play space in Brooklyn. He wanted to know if I would help him.

“How much do you know about start­ing and run­ning a nurs­ery?” I asked.

“Noth­ing,” he said.

“Well, I’ll be glad to tell you what I know,” I said, “but it’s the last thing I’d en­cour­age you to do. I mean, here you have a busi­ness where you know what you’re do­ing. It’s your pas­sion, and it’s grow­ing, and you re­ally haven’t had to go out look­ing for cus­tomers. They’ve come to you. Now you’re think­ing about start­ing a new busi­ness you know noth­ing about? A busi­ness, by the way, in which it’s very hard to make money. And with a nurs­ery, you have to get all new cus­tomers every two years or so. There’s also a ton of pa­per­work and li­censes you’ll need. Then, even if it’s vi­able, you won’t be cre­at­ing long-term value.” I im­pressed on him that value in a busi­ness de­pends on things like re­cur­ring in­come from cus­tomers who come back year af­ter year—in other words, ex­actly what he has at the mu­sic school, and what nurs­eries al­most never have.

He ob­vi­ously heard me. He left vow­ing to for­get about the nurs­ery and to fo­cus in­stead on hav­ing the best mu­sic school in the city. I promised to help him. And who knows? Maybe we’ll fig­ure out what to do with the un­used space along the way.

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