A Brooklyn small business owner has some important advice that should be headed by every other small business owner and startup in the United States. Felipe Lavalle runs a bike tour company in New York City called Get Up And Ride. The following is what can be taken away from Lavalle’s roller coaster ride of ups and downs.
Mr. Lavalle could not say it better. All small business owners should keep a very close eye on their finances. Profitability should be at the top of their priorities. As soon as Felipe started to ignore his profitability and expand his business instead, his business started to lose money. When Felipe realized this, it was almost too late. He had to fire all of his tour guides after he was left with only $200.
Another thing to take away is that small businesses and startups should not expand too rapidly. This is a big mistake that many small businesses and startups do. It is tempting to expand, but how do you know if the expansion will last and is not just temporary? It is tricky, but Felipe Lavalle says that a business should attempt to minimize overhead costs as much as possible. The costs should be kept as low as possible for as long as possible.
If such advice was followed by Felipe Lavalle, he would have made much more money in profits. He also would not lose any money. Business owners should also take a proactive approach and be directly involved in their business. Felipe started out leading tours at Get Up And Ride. Eventually though, he decided to focus on the business side after his girlfriend urged him to try it.
The advice of the girlfriend was not good. Hiring seven part time tour guides was a big expense that he could not handle. A slowdown in the number of visitors triggered by currency devaluation abroad further hurt his business. Expanding too rapidly, taking on too much expenses and not keeping an eye out on profitability all hurt Felipe Lavalle’s business. It almost bankrupt him.
The bike tour business did well initially because of positive reviews on Trip Advisor. Felipe would offer free bike tours in exchange for reviews for guests staying at his apartment through Airbnb. It proved to be an effective online marketing campaign. However, expanding too rapidly, poor oversight, and fading away from the business almost led to his demise. Learn from such experiences so you don’t repeat these mistakes yourself.