Hello. I’m Jane Pfeiffer, founder and president of Fieldtrip and welcome to Mission Multiplier. This is where we offer practical advice to help nonprofit organization and purpose driven companies close the gap between the people that they support and those that they need support and funding from. Close that gap, and you have a mission multiplier. Well, today the world is talking about inflation and recession, and it seems like a certainty that it’s headed our way. In the last recession, the Great Recession of 2008, I was in a different position, an even scarier position.
I had left my career of 17 years in media and decided to start not one, two, but four different business entities. The first was a real estate holding company that would own the property where the second business, a retail service provider direct to consumer (B2C) would lease and operate. Third was a nonprofit event with a multi-year history. And fourth was an advertising agency. The one that I knew a little something about. The first two organizations, the real estate and the retail, required significant debt. There was the purchasing of real estate, the build out, the equipment. It was a hefty load. The nonprofit we purchased for a dollar and the fourth, the advertising agency, was started with really just a wee bit of rent and a couple of computers. It was started with a client already in hand and avoided any type of debt load. Well, talk about being naive. I had all the ideas and energy and enthusiasm to make it work, but none of the experience. While I had partners, it was my personal equity that carried the majority of the debt load on the real estate and the retail buildout. And I believed that advertising would drive sales for the retail business. And as long as that company was profitable, everything else would work out. And in theory and in math, that would indeed be the case. But it wasn’t that easy. It was hard. And it was very expensive. The retail business never turned a profit. Not $1. Not one single month. Sales were high ticket and dependent on disposable income from our customers. Well, guess what tightens up in the wake of a recession? In the first year, that talk was growing. And as we got into 2008, we had no plan other than just to keep bailing money and water out of the business as fast as possible. When the recession hit, title sponsors dropped out of the nonprofit event, so leaving more exposure there. And it was rough any way you looked at it. Three of the four businesses were failing. The real estate value had plummeted from our office space because there were empty units next door that hadn’t been custom build-outs, so people could get that at a lower price and then build out to their options. So even the safest bet, the real estate, was a liability. What I learned is that I was working twice as hard for a lot less money. And what income I did have was going directly to paying the debt load. So first lesson is that wishes, hopes and good intentions don’t pay the bills. But there are lessons to be learned and things that I’m taking into the future and likely the very near future.
First, resist the urge to do something that feels good and sounds too good to be true. I got caught up in the excitement from being a long time employee and having a lot of certainty in my income and stability and employment that that made it seem like a safe idea to jump out and take these big risks. It was too good to be true. And if I would have used a little more critical thinking rather than an eager mind, anybody could have seen that. I should have seen that. Number two, just because you’re qualified to borrow money doesn’t mean you should. Some very simple practices would have saved me a lot of stress, even just dividing the loans among the partners so that we all had an equal load to bear. Well, one, it would have kept us from starting those entities, which would have been the safest move. And two, it would have avoided what was a very unequal distribution of exposure. Three, double down on what you know. Excitement got the best of me. Others were doing a similar type of business and making a lot of money, and it just seemed so easy because their biggest obstacle was they didn’t know how to market and advertise. Well, if I knew how to do that, then surely it was a recipe for success. Well, it wasn’t. And I should have doubled down on what I knew, and that was the advertising agency. Instead of it becoming a source of support for the other failing entities, it could have grown much faster. And I could have had a better quality of life in that time. Fourth, listen to everybody. You’ll never know when inspiration is going to strike. A piece of valuable advice. But don’t listen at the expense of overriding your gut. My gut was there and it was telling me the whole time, but I had greater faith in others than I did my own instinct and intuition. And I constantly vetoed myself because I wanted it to be true and I should have listened to my gut. Fifth and finally, seize the opportunities. There are opportunities even in down economic times. So seize them. Look for them. Take the contrarian position. When everyone is moving in one direction, go the other. Yes, there’s more friction. It takes more fight. But if you look carefully, you can find those opportunities. In that case, I would have doubled down on the advertising agency and really leaned in to the fact that most business entities, especially retailers, which we were working with, were looking to trim money. My advantage was not helping you cut your advertising spend, but helping you multiply the impact of what you have to spend so that you could continue to bring business in. That would have been my advantage.
So would I do it all again? Absolutely not. No way would I do it again. But I would do it differently because what I have now in Fieldtrip and the Fieldtrip team is better than anything I could have dreamed back in 2006, when this all started. And the work that we get to do together and for others is more rewarding than what the financial gains I would have had by staying in that first career, or what I foolishly thought was possible. It’s better in this reality than what I could have ever imagined. But learn from lessons. Because failure is a tremendous opportunity to learn. As long as you don’t keep making the same mistakes, and as long as you have the humility to look back and really find the moments that taught you something and identify those and live according to those. Thanks for listening and I’ll see you next week. Feel free to visit wearefieldtrip.com/nonprofits and subscribe for more weekly videos.