Guest Post by SeaTurtle Sports Co-founder Allen Bell and Allison Goldman, Director of SeaTurtle Sports
Allen and Jeanne Bell launched SeaTurtle Sports in New Orleans, Louisiana, in 2003 to design and manufacture premium beach and backyard games. As its founders, we observed a lack of new ideas in the category and what we felt was an unhealthy shift away from traditional “offline” interaction among family and friends.
In 2011, with the success of our first product, Beach Bocce Ball, we moved from a hobby to operating as a full time business. Over the course of the last two years, we relocated our headquarters and warehouse from New Orleans (already a second or third tier market) to the even smaller town of Pass Christian, Mississippi. Pass Christian is a unique southern town, and much like New Orleans, remains fragile, still rebuilding after Hurricane Katrina leveled it in 2005. We knew the move would come with its challenges, but it has also provided our company with significant advantages and unexpected benefits.
Our experiences in post-Katrina New Orleans prepared us to look past the perceived obstacles to see new opportunities. Here, we’ve isolated what we found to be some of the distinct operating advantages that can be leveraged to grow your business in a small market.
The problem in small business
A recent article appearing in a national business publication described a rapidly growing craft brewery approaching $5 million in sales with 35 employees, but barely breaking even and the owner still unable to quit his day job. In 2006, Visa USA reported that small businesses account for nearly 30% ($4.7 trillion) of commercial spending in the U.S. The point of these references is, that while achieving profitability may be elusive and challenging, even operating out of a small town, there is a huge market for small business products and services. Keeping an eye on minimizing your operating costs from the outset will pay dividends as you grow your business and hopefully your profit margins as well.
The small town advantage
If we told you that you could reduce your business’s operating costs by 50% or more, would you consider our suggestion? We have seen a dramatic decrease in operating costs by moving our headquarters and storage facility to Pass Christian. We had assumed that we would be able to lower our monthly expenses, but we didn’t realize by how much and in so many functional areas of the business. As one example, we have been able to double our warehousing space while reducing the cost to half of what we paid in New Orleans.
Another example is the opportunity cost of operating a business out of a home versus in an office or house in an urban setting. Compared to either big city solution, using a second or third bedroom in a small town to operate a business represents a fraction of the housing expense versus a big city.
A third example is the use of virtual staffing in small towns. Often times there simply isn’t an expert with a specific skill set required to complete a project located in your small town. Virtual staffing is a way to reduce overhead costs, have multiple team members completing projects simultaneously, and decrease the cost of bundled services.
Smaller towns also have better, low-cost options to try out pop-up retailing for product-based companies. Towns often put on annual festivals meant to showcase products developed in their own towns and to share with the community and surrounding communities. Often at a cost of around $100 for a weekend of retailing, these small towns offer a chance for a company to get a lot of local exposure, support, and sales with virtually no additional costs. SeaTurtle Sports has leveraged these cross-market opportunities in the past with ROIs upwards of 500%.
Lower cost and flexible leases on retail space in town centers are another way to trial pop-up retailing without having to pay for the respective costs of retailing in larger centers. Both of these pop-up retailing options allow you to get close to you customer, request real-time customer feedback, and receive great word-of-mouth PR.
The larger benefit
With any business, no matter its location, challenges and hurdles come up unexpectedly. However, you may find, as we have, that your sense of connection in a small town will not only help your business meet these challenges, but can help it thrive. In turn, over time, your personal and professional investment in a small town can have exponential impact. The ultimate reward is developing a highly successful business that becomes one with the community it calls home.
Thanks to SeaTurtle Sports for this guest post and the accompanying photos.