Many entrepreneurs contact us who want to get into career consulting or offer human resources support to companies.
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So we were delighted to have the opportunity to speak with a successful entrepreneur in this space, Kate Wendleton.
Kate, thank you so much for participating in one of our entrepreneur interviews. Tell us about your business. What are you doing exactly?
The Five O'Clock Club is a national career coaching and outplacement firm.
We provide the highest quality, most affordable career coaching to individuals because we make our money from corporations. Likewise, we keep our overhead way down and are thus able to provide very affordable outplacement to corporations.
Where is your business located and when did you start the business?
We are headquartered in New York City, but we serve the entire nation.
We started in 1986.
What were you doing before this, and is this your first business?
I have an MBA and my background is in computer technology and small business management -- that is, being the CFO or COO for small companies.
Where did you get the startup money?
Self-financed. No venture or investment capital of any kind. Decided to bootstrap it so we could do what we want without having too many bosses or sharing the profits. The growth was slow at first, but we have been doing very well for the past ten years.
Who are your main competitors? How do you compete against them?
Our main competitors are billion-dollar international companies. They are all owned by someone else, so their eye is continually in the bottom line. They care about getting the business, but they don't care about serving those unemployed people who are assigned to them.
We DO care and appeal to employers who care what happens to those employees they have to let go. We have gotten 257 new corporate accounts in the past four years alone.
That's very impressive. So, how has your experience in running the business been different from what you expected?
We had first aimed at helping individuals -- those who didn't get outplacement service provided by their employer. But even when these people have plenty of money in their bank accounts, they feel poor when they lose their jobs, so they are not willing to spend.
Our competitors on the retail side charge $7,000 to $10,000 up front, but they are always getting sued because they lose interest in a person who is having a difficult time. We are able to charge individuals less than $1,000, but we still were getting too many hard luck cases to make money and were unwilling to follow our competitors' lead and soak these people.
It was only 10 years ago, when we started selling to corporations -- who are "willing and able to pay" -- that we started making great money.
But we feel a duty to continue to serve the retail market -- those who don't get outplacement and cannot or are unwilling to spend a lot. So we serve both and the mix has had an amazing effect on job hunters -- they do better when half the people are paying for the service themselves and half are there because their employers have paid for them.
Is there anything you wish you had done differently?
We're glad we don't have investors because they would never allow this model.
I wish we had caught on sooner that an ethical retail business aimed at those who are paying on their own would never generate the volume needed to carry the business. I wish we had sold to the corporate market sooner. However, those lean times forced us to focus on the job hunter rather than the employer and we developed support materials for job searchers that are the best in the business. Had we been focused on the corporate market, we would have lost the "soul" of our business, where the job hunter -- not the employer -- comes first. It is this "do-good" attitude that has resulted in such a high level of corporate sales.
What have you done that has been very effective in helping to grow the business?
Our best marketing tool has been running seminars every two months for the HR decision-makers. We do what is in their best interests, putting on panels (35 so far) that address the key issues they face and training them how to improve their own careers. We do very little self-promotion at these events, but they give us an excuse to call people who have attended, or those who registered but did not attend. Then we ask for a meeting to tell them about our services.
We regularly get 200+ HR executives at each event -- no vendors are allowed (except for us). We help HR people meet other HR people, and it's all about them -- not us. Many call us when they have outplacement needs simply because of the popularity of our breakfasts. They take a tremendous amount of work to put on, (but not much out-of-pocket expense), and they give us the credibility we need to compete against the big boys.
What advice would you give to somebody else who wanted to start a similar business?
It's easier to start a traditional outplacement firm than to combine retail and outplacement as we have done. The most important thing you can do is keep your overhead low. It's the overhead (luxurious space) that is killing our competition.
That's great advice, Kate. Exorbitant overhead costs have killed many a good company. Thanks so much for sharing your entrepreneurial experience with us, and good luck in growing your business.