Episode 39: Making the “Right” Business Investments (Transcript) - pixiedustandprofits.com
episode 39 Future-Proofing Your Business By Planning Ahead/Cutting Non-Critical Expenses

Episode 39: Making the “Right” Business Investments (Transcript)

Mar 9, 2021

The

podcast

Intro (00:01):
Pixie Dust & Profits is a podcast for small business owners who love Disney and want to sprinkle some of that magic onto their own businesses. Join your host, Nicole Boucher and Yasmine Spencer. As they explore the mouse’s $12.6 billion operation and break down exactly how you can apply these big scale concepts to your own.

Nicole (00:26):
Hey everyone, welcome to this week’s episode of pixie dust and profits. We are really excited today to talk about future proofing your business. And we kind of are going at this with two different angles first by planning ahead, which is our favorite thing to do, and also by cutting things that are non-critical. So those could be expenses or things that don’t align with your goals. And so we’re just going to dig right into some of the things that Disney has had to decide to do this year. Yes. In context of coronavirus. But I think these learnings are great, no matter what stage we’re in or what pandemic is about to hit us with out further ado, I’m going to turn it over to Yasmin to talk more about some of the decisions Disney has made recently with cuts they’ve had to make because of coronavirus.

Yasmine (01:15):
Well, there’s been a lot of publicly noted cuts that Disney has done terms are declining their spending, and we’re going to go through everything from the construction cuts that they’ve had to make some of the rides that they’ve had to sort of sunset or postpone because of coronavirus transportation options. But the one thing that I’m really excited to talk about because Nicole and I were literally crunching numbers just before we hopped on, is the firework. So it’s no secret that Disney has cut back on their firework displays. And yeah, you don’t want hundreds of the, I guess it’s not hundreds of thousands with thousands of people now huddled together right in front of the castle, watch it like the beautiful sane fireworks displays that Disney has done. They obviously don’t want the risk, but on the other hand, it’s actually quite a bit of a cost savings for them.

Yasmine (02:05):
We did some digging and while these numbers aren’t confirmed, it’s estimated that Disney spends about $50,000 per fireworks display. Now obviously the magic kingdom fireworks are way more expensive. The ones that Epcot and Hollywood studios are a little bit smaller, but probably pricey as well. And we ran the numbers from, you know, like the day that they opened at the very least in July two, two dates, February 20th, when we’re recording this Disney saved approximately $15 million just by not having fireworks shows, but you know, ticket prices, haven’t gone down to, you know, compensate for that. So that’s one thing that they’ve been doing. Nicole, do you want to talk about the construction cuts? Cause there’s like so much to dive into here.

Nicole (02:51):
Sure. so obviously they’ve had to make some decisions about what gets worked on and what doesn’t, and also who can be working at the same time. Things that require more collaboration and bodies next to each other were probably some of the first things to be cut. So it’s estimated that they’ve cut about a billion dollars in construction that was planned or about to start around all of the parks. And so one really notable one is that the Tron rollercoaster that’s been looking forward to in Magic Kingdom for years now. It’s had the train down for three years while they’ve been building this. They have delayed construction. So right now that’s paused. I’m sure it’s still moving forward in many ways from the work from home crowd, but you know, Magic Kingdom as a park, doesn’t have trouble drawing people in. And so of all the projects they had going on, they said, okay, trons going to open in the fall instead of the spring.

Nicole (03:45):
Now they did decide to cut a few things that were planned for Epcot in the 50 year anniversary. I really loved last year, I got to go to the parks and see their revision of what I’ve caught will be. And so they had a Mary Poppins ride. They had this reinvention of spaceship earth and those things have been cut. And we’re not sure if they’ll ever make it back onto the table. It probably depends on how many crowds come after the virus ends and what their profits and revenue look like. But those two projects alone were cut and they decided to keep moving forward with the guardians of the galaxy ride and Epcot. It’s a roller coaster Remy and Ratatouille and Paris and Epcot. And I think that one might be because it was almost done. And then also the hotel that they’re building that Star Wars theme.

Nicole (04:34):
So those are some really big construction projects that they decided to continue moving forward with despite the lack of revenue coming in from the parks. But they had to make cuts in other places. And so, you know, we’re not in the boardroom, we’re not helping them make those decisions. But when you start thinking about, okay, how do I choose of these 10 projects? Which one I’m going to move forward with? Which one I’m not, you start thinking what this future proofing concept, right? Which ones fit the goals we have for that particular park for why we’re offering this, you know, entertainment display, and you start thinking about, okay, does this fit in the longterm view? Mary Poppins would be great to have, we’d probably all enjoyed as guests, but what’s going to bring more people to the parks, Mary Poppins, who doesn’t really have a modern movie or, you know, Guardians of the Galaxy of rollercoaster.

Nicole (05:28):
First of all, overly coaster is always going to have a draw of people. Guardians of the Galaxy is one of the very few things that can actually be in Disney world because of the agreements with Disneyland and Disney World. And the Marvel character is in the agreement with the sale. And so, you know, bringing Marvel to Disney World is definitely something that Disney is looking at doing. That’s a goal of theirs to get that immersed. And so that way they maybe, maybe, so they have some competition with someone like universal, who does have Marvel characters already in tends to skew towards that teenage age group. So, you know, when you think about terms of Mary Poppins versus guardians of the galaxy, one of the goals, what are the long-term goals for Epcot? What are the longterm girls for who our makeup of visitors are and what they’re doing while they’re here, you choose the Guardians of the Galaxy roller coaster for spending your money.

Yasmine (06:19):
So a few other little things that we’ll bring up that Disney’s kind, and we’ve actually talked about this in one of our previous episodes, but they’ve limited transportation options. So again, let’s look at it under the coronavirus lens with the minivans. It’s not as safe for a driver to necessarily be in such close contact with a family in the back seat. So it made sense to cut the minivans as an offering, but we also knew based on some of our research and articles that came out, that the minivans weren’t actually super profitable, despite being loved and convenient for families. So Disney acts that program before the parks even opened again in July and are actually selling the inventory of minivans and used car dealerships in Orlando. So I think they’re probably all sold out right now, but if you did want a red polka dotted van head to like Orlando, and I’m sure you could find a Chevrolet minivan there the magical express.

Yasmine (07:14):
So we talked about the fact that Disney is cutting some of our favorite, favorite aspects of the entire experience. And that’s because it’s a great opportunity for them to save money when the city is actually building a transportation system that has a train that goes directly from the airport to Disney Springs. So if that investment can be taken on by another entity, it doesn’t really make sense in the current state that Disney is in for them to have a free service like the magical express. So that’s going away in about two years’ time and being replaced with the train from the airport to Disney Springs. That probably won’t be free and included in your package, but we’ll get you there without a car. So as a company and as a business owner, you always have to look at like, what investments make sense for you in the long run.

Yasmine (08:08):
And oftentimes, you know, you’ll have these big plans and projects, but if your goals end up shifting whether it’s because of a pandemic because of live stuff, or just because you want to shake things up, you really need to look at all the current and planned investments with a critical eye to make sure if it makes sense. And one of the concepts that I love bringing back to my clients that we learned in as a school is the sunk cost fallacy. So, you know, you’ve invested money in something and you’re like, well, every already is money and it’s not profitable, or it’s not bringing you that return on investment. So let me just continue doing more and more and more. So eventually it’ll take off and that’s the exact opposite direction Disney’s going out there. And like they are looking at their costs. They probably invested a lot in like planning some of these like rides like the Mary Poppins ride, the plans for spaceship earth.

Yasmine (09:00):
But they figured it’s better for us to just like cut our losses, then proceed ahead. So you as a small business owner, when you were looking at what’s on deck for 2021 and beyond take a critical look at your investments. One of the things that Nicole and I always encourage our clients to look at is let’s start off with like programs that you’re investing in. Now we run group programs ourselves. So I say this as a fellow course, creator and mastermind creator, but only invest in courses or group programs that you need right now in your business. I know it’s fun to see like, oh, there’s this program for this. And there’s another program for that. I’m like, I’m just gonna invest in everything. So I can expedite my growth makes sense in theory, right? But in reality, what ends up happening is you get overwhelmed.

Yasmine (09:55):
You’re trying to implement, implement what grew ASIS and what group he says. And then there’s like this blog posts from grew. See that you’re also trying to throw into the mix and you have like a hodgepodge of strategies, a lot of things that are you’re being told to do and not enough time to always do it. So when you invest in any program, try to determine if the knowledge that you will gain is something that you can implement an action immediately in your business for growth. Or if you’re in a group program, do you have the time and capacity to implement what you learned? Because people think that they’re going to join something it’s going to skyrocket their business. Well, it doesn’t do it if you don’t have time to do the work. So be really mindful of where you’re investing. And one of the first things that we end up encouraging our clients to cut is a lot of like the extra business courses and programs that they invest in. Like, even if it’s us, sometimes we’ve actually had conversations with clients where we were like, you know, we love working with you. We’re really happy to have you here, but based on where your business is going and where you need to be investing your money in is not with us. And we’re okay with doing that because it comes from an integrity standpoint. Like we want to make sure that we are practicing what we’re preaching, but too, if we can’t serve someone and help them move forward, then like what’s the point.

Nicole (11:16):
And yeah, I want to add to that, that you don’t necessarily need to be using every single facet of whatever program or offering you’re in with, but you do need to make sure that you’re using the things that you need to be using. So if you are in a group program, make sure you’re engaging wholly into one feature of it, whether it be the coaching sessions available to you or the tools that are given to you, or just understanding how it all operates, make sure you’re using the community or the connections there. So find that at least one thing that does work for you and that you’re using and use it because there were so many expenses out there where people aren’t using any piece of it and they can’t even answer why they have it. This also comes into play when people are trying to upsell you or lock you in whether it’s a tool or a system or a coaching program, or a retainer agreement, when people are trying to lock you into something that you might not need for a year.

Nicole (12:18):
I mean, a year seems like a short amount of time, but in a small business, it’s, it’s actually probably two or three. And I hate to say the word pivot, but it’s two or three strategic planning sessions apart, right? Because our businesses move so quickly that while we may have the same overarching mission and goals, what ha what we need every 12 weeks changes. Right? So, you know, when you’re in a position that you need sales, sales, sales, you’re going to have different expenses and investments for those 12 weeks. And then once you’ve made those sales and you have people in your programs, or you people have bought inventory from you, well, now you’re probably in production or customer experience or, you know, value adding and retention, and that’s only 12 weeks apart. So if you bought a system to help you do sales or hired somebody to be on sales calls with people, you might only need them for that 12 week push, but you’ve signed on for six months or a year.

Nicole (13:21):
So it’s always our rule of thumb, especially when it comes to coaching programs to, to just give it six months and not to lock yourself into a year. There are so many reasons where it might be a great fit upfront or your business has changed, or the coaching relationship has changed. And it’s so much easier to get out of that. If it doesn’t work for your business anymore, if you’ve only engaged for six months, same suggestion. If you’re trying a new tool or system, right, you might need something right now and you should just invest in the free trial the first month, maybe pay for two months on the month to month contract. Even if it hurts a little bit, because you know, the year is so much cheaper, you have to make sure you’re actually going to use the system before you pay for a whole year of it.

Nicole (14:06):
I can’t tell you the number of clients I’ve had, who I saw this deal, and it was Black Friday and the stars align, and someone else told me about that. It does. And so I invested and I bought the lifetime plan. It’s like, well, are you using it? No, no. So we ha we have it for when we do need it. Okay. Well, when do we need it? Do you have a plan? Do you have a project for that? And so what we really want to, I guess the bottom line, if you take nothing else out of this episode, think about your expenses and your investments and where you’re taking your business. Before you take out the credit card before you you know, throw something on the floor and say, you know what, I’m not doing this anymore. Look at those goals, look at where you want your business to be.

Nicole (14:50):
Look at the experience you want your customers to have. And when you’re making those decisions, put that into the factor right up alongside price, right? A lot of times we are guided by this is on sale, or I can pay for this right now or whatever it may be right next to price. You should have a column of, okay, this is the price of what it’s going to cost. What is it going to cost an opportunity if I buy this? What other thing can I not buy? That could be something in your personal life, because it’s, it’s taking an owner draw away from you. It could be something else in the business that, you know, maybe you’re investing in a coach, but you really need a director of operations on your team. There were so many things that there’s an opportunity cost too. And I think sometimes we have a tendency to just look at price because that’s how we’re trained in our everyday consumer lives.

Nicole (15:38):
We’re really, oh, okay. I need to get bread. And it’s on sale for 2 95 this week. I’m going to grab two lobes instead of one. And that’s how we’re trained personally. But in business, there needs to be a business case. And there needs to be a thorough understanding of does this align with my goals? What am I saying no to by saying yes to this, am I, you know, solvent enough to make this investment? And what do I want to see in the first 30 days after I make this investment? What does this need to look like for me to know that this was a success?

Yasmine (16:07):
You absolutely nailed it. And like, I come to this from the personal experience of being like, oh, I’m going to invest in something and do it. And then just like not having the time and basically flushing, like, honestly, like in, in the most recent case, like a couple of thousand dollars down the drain, because I joined a group program with the intention of launching something, didn’t have time to do anything showed up on like one call during the entire time period. And that was money. I probably could have allocated towards hiring more support my business so I can actually get more stuff done to listen to those group coaching calls. So don’t make the same mistake I did learn from your lesson. And like the only thing that I want to

Nicole (16:48):
Add is that you’re not alone.

Yasmine (16:50):
And like, we give us advice professionally to our clients all the time, or at least like I do. I won’t like love Nicole in with me, but like, we will make the sort of same air quotes like mistakes and you have to learn from that experience and move forward. So now every time I look at investing in something, I think about it so much more critically. I look at like what I have on deck. And I, I’m quite honest with myself about the time investment that I can make because having a toddler that’s running around that eats so quite a lot more time than it did when, you know, I didn’t have a kid to look after when running the day-to-day of my business. So take your life into consideration as well in these decisions, because yeah, you aren’t Disney. You are a small business owner and make smart decisions.

Nicole (17:36):
Awesome. Well, we hope that was helpful. I hope I gave you a way to think about your next investment in your business. And if you are looking for an investment for your business, come and join us and the Profitable and Productive Party, we are all about tools like this to help you make better decisions in your business to help you be a better leader and manager. And we promise we will let you know if you are not a good fit for that program, because again, integrity. So check us out at pixiedustandprofits.com/party. And if you just want to follow us on Instagram and get more tips like these we’d love you there too. So we’re @pixiedustandprofits.

Yasmine (18:15):
Thanks so much for listening to this week’s episode and we’ll see you real soon.

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