Having run a successful business for 47 years, I have had a substantial number of massive knocks and problems on the the way. No business survives if it does not adapt to changes in the marketplace. For my main business, a music rehearsal studio, the landscape could not be any more different to when I started it. Back then, it started as a musicians collective, pooling assets, sharing costs. This model lasted about six months until the other bands I formed it with split up or moved on.
It then became a partnership and this model persisted until 1994, when I bought my partners out. I had a very different vision to one of them. The business had been running for fifteen years, but our customer base was almost identical. It was blokes who wanted to have a jam in the evening and very occasionally someone who wanted a rehearsal during the day, usually in school holidays. It was a ramshackle operation, but it made money, because there was demand and no local competition. Leading up to the change in 1994, lots of issues became clear about what we were doing wrong and what we were doing right. I realised that it could be a well run business and grow. I put my ideas and plans to the rest of the partners and one of them was very dismissive. It was clear to me that the only way to develop the studios was to buy them out. Luckily I'd had a redundancy payment at the time and had the cash. It wasn't what I wanted. I thought they'd be excited and realise that if I put a loan into the business to fund it, we could have a tidy little business that had huge potential to grow. As it was, the money I had set aside for the plan went on buying them out.
So I found myself with no partners and no cash to invest in the business. Of course when my original offer was rebuffed, I started to plan. When I made the offer, I had already got a new partner lined up. Someone who shared my vision and understood why I felt there was a massive opportunity. At the time of the buyout, we had two studios. My plan was to have five studios, a small music shop and a recording facility within five years. This was contingent on units becoming available. We were just about breaking even with two, and had 50% peak time utilisation.. We also used the studios for our own projects. I agreed with my new partner that all growth would be funded by the business and we'd do the fit out work ourselves, keeping costs to a minimum. We did exactly this.
I had to throw my business plan out of the window and start again. But the constraints made us think very carefully about every purchase. Every time there was spare cash in the business, we discussed all of the things we could buy and worked out which delivered the most potential revenue generation at the least cost, or alternatively the highest cost savings. When bulbs blew, we got energy saving bulbs. When we bought amps and drum kits, we looked at what was most reliable and would have the lowest maintenance costs. Had I just gone and re-equipped the cash from my redundancy, I'd not have spent the cash wisely.
What was initially a blow and a problem actually became a secret weapon. The financial discipline we imposed on ourselves, through circumstance made us a far better business. When my previous partners were part of the set up, we bought the highest spec gear we could. We actually found that most bands preferred simple to use basic gear. If it was to complex, they'd be baffled. We had thought we were providing a better service, but many of our customers are novices and highly complicated systems just caused problems.
The biggest lesson was that every knockback is an opportunity. We achieved our initial goal within three years and within five, we had ten studios, a shop and a recording operation, and we massively exceeded the financial projections, which one of my former partners had dismissed as 'pure fantasy'.

