Sonny and Ami Ahuja founded their Racine, Wis. retail perfume business in 1996 and, over the course of a decade, built it to five locations around the state. However, online competition that undercut prices by as much as 50 percent, followed by the financial crisis eroded business.
By 2009, the couple had shuttered four of their stores and had accumulated about $150,000 in supplier debt. But Sonny took action and decided to revamp the company into an online business, teaching himself how to build and optimize his website. Within three years of closing their final store in 2010, the couple has built two successful online businesses and paid off all of their creditors. Here are four actions that helped them turn around their situation.
1. Change your business model.
When Sonny saw he was losing business to online competition, he knew he had to adapt. He had little computer experience and certainly didn't have the $25,000 he had been quoted for someone else to build his site. So he took matters into his own hands and researched what he needed to know online. "I read blogs, watched videos and tested and tested and tested. Eventually, I cracked MSN, which is Bing now, and could get any keyword on the first page," he says.
Sonny became adept at figuring out how to rank well in virtually every search engine. Because his Google AdWords ads rank so high, they frequently appear on the Google advertising feeds of Amazon.com and other high-profile web sites, driving more traffic and sales to his site Grandperfumes.com.
2. Be upfront with suppliers.
While some business owners might have pulled a disappearing act with suppliers in the face of such debt, Sonny explained his plan to transition to an online business and kept them apprised of his progress. In return, they trusted him and continued to provide him with the inventory he needed, even though he still owed them money.
"What I had built over 10 years, I didn't want that to go away over a few-month period because I didn’t show my face to them," he says. "I paid all of them."
3. Don't get derailed by setbacks.
Even when you're on the road to new success, it's not always a smooth path to a storybook ending. The first two bottles of perfume Sonny shipped broke in transit. He paid an unscrupulous web site optimization firm $3,000 to help his site get better rankings and the representative disappeared without delivering any results. When he hit bumps in the road, Sonny remained calm and figured out a new approach to move his business forward.
4. Never stop learning.
Sonny never stops trying to figure out how to make his website more effective. He regularly tests different formats and elements on his pages, including photographs, different colors, and even telephone number placement. He found that even a small change could significantly increase sales on a particular page. Sales doubled after he revamped the design of his website in 2010.
"You have to keep learning about your business. When you do that, you become more successful," he says. Sonny became such an expert in website development and SEO that he has launched a web consultancy, SonnyAhuja.com.
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