What’s up, Sumo-lings!
Edmund Lowman here, Florida native currently kicking it in Thailand since 2012, when I started Slumber Party Hostels – one of the top hostel chains in the world!
You might have noticed that tourism hasn’t been doing too hot recently. With the industry tanking virtually overnight, I had to make some difficult decisions very quickly about how to pivot my business and stay afloat. That way, I could take back control of my personal and business situation, instead of being a victim of it.
Here’s how I used my resources to pivot and profit in other industries.
Side Hustle Story: How the Pandemic Pivoted Me to Success
Burn Rate Calculation
First, I had to figure out where my money was going.
I put together an Excel spreadsheet with all my monthly expenses, as well as my current debts like credit cards and mortgages. The spreadsheet also had bank account balances to get an overview of my finances. (Editor’s note: if you’re looking for where to begin in your personal finance journey, this interview is gold.)
I assumed I was going to have $0 in income, so I used the worst-case scenario to plan for how long I could stay in business. Then I cut, cut, cut! That meant no more eating out, coffee, or pool cleaning – things I could definitely live without.
Once that work was done, I knew how much time and money I could use for other business opportunities. It really helped mitigate the panic and kept me focused on my goals.
I actually stumbled onto grocery delivery as an option.
One of my good friends is the CEO of a popular grocery delivery app in Asia, and when we were talking about business, he shared that he was crushing it. (Meanwhile, I was being crushed.) So I decided to take the hint and see if I could break into the market, but with the intention of donating 100% of the proceeds.
When you’re starting out in a new industry, don’t overwhelm yourself with the logistics of acquiring all the things you might need. Instead, it helps to take a step back and look at what you already have at your disposal.
I started with a list of resources available to me from my hostel business, like Skills, Assets, and Supply Chains. It looked something like this:
- Food Supply Chain
- Alcohol Supply Chain
- Web Services
The list went on, but those were the big things. When the lockdown started heating up, the things that popped out at me as opportunities were:
- HR (for things like visas)
- Food Supply Chain (for deliveries)
- Cleaners (to help hotels close down)
- Web Services
These were all things that people still needed, now more than ever. Food delivery was just the easiest one to begin with. And we could do it quickly.
We’d already made a food delivery service, Feed Me Ao Nang, six years ago. While we’d fallen off since then (running a hostel chain is a lot of work), we still had the Facebook group and pages with previous customers. Except now we were delivering groceries.
I just want to take a moment to clarify that I’m only including Feed Me Ao Nang in this post to show how I got it up and running as a charity. Feed Me Ao Nang had its fair share of profits – all of the funds we earned went to the staff, those impacted by COVID-19, and the Thai heroes working to fight the pandemic.
The beginning was anything but glamorous. We posted a flier in a few local Facebook groups and on our old Facebook page, telling them we’d deliver groceries for 10% of the cost of the basket. We had clients in minutes.
They sent us a message with a list and pictures, and we delivered the groceries to their address.
If you’re doing deliveries, make sure to set your order criteria early. I recommend grouping your orders to once or twice a day at set times, so you’re not stuck delivering cigarettes or packs of yogurt for pennies. Minimum order amounts also help with that. Since you’re only delivering twice a day, you increase profit margins and save everyone time. Trust me on that.
We made over $100 on our first day. So I took $20 and spent it on Facebook ads.
Facebook Ad Strategy
Our strategy was pretty simple. We targeted people within a 5-mile radius of Ao Nang with two ad-sets running, one Thai and one English.
The English ad also ran to devices running the other common ex-pat languages: Swedish, German, Dutch, Russian, Danish, etc.
There was no grocery delivery competition in our town in Thailand, so PPC was a great model to use (and cheap). We experimented a little and found that it cost about $5 to get a customer, with an average order of $150.
We were profitable from our first customer. So we spent more money on ads. After 18 days, we’d snagged 86 customers with an ad budget of 100 bucks.
Now Feed Me Ao Nang is getting the biggest piece of the food delivery pie in the surrounding area. Plus, not only do we get to help people with their shopping, we can take care of our furloughed hostel staff by giving them another job.
I use preply.com to supplement my income. It’s super easy to set up and you can set your own hourly rate. I’ve already made over $1k teaching English.
A pro-tip is that people only pay so much per hour before you start losing potential students. Plus, Preply takes 22-33% commission. I recommend charging $15 an hour, meaning you’ll make about $10 an hour from home in your free time.
Heads up: this is a time-consuming hustle. You’ll want to make a fun and friendly video first, and not be picky about your students. If you get a message from a student, reply immediately and keep your rating high.
This isn’t so much about teaching as it is entertaining people while speaking with them in English. But it is a cool opportunity to meet a lot of businesspeople and do some networking. I’ve been having a great time with it, and it nets me cash, so hey, win-win.
Renting Out Houses
I’ve used my Facebook platform to help where sites like Airbnb haven’t (they’ve actually been the opposite of helpful, but we won’t get into that here).
I write witty copy for my properties, then post it to relevant Facebook groups and my own page. To add a little value, I threw in cleaning and a free rental scooter – now I’m getting bookings even during the crisis.
Since I’m not going through Airbnb, I can offer the properties at a great discount. Plus, it helps with mortgage payments, even if it’s not as profitable as it was a couple months ago. I’ll be poised to lead the market once tourism picks back up again.
When the lockdown started really hitting, we still had about 40 people staying at our hostels. There was a lot of conflicting information on the news about granting or extending visas, so I thought this was where I could step in with my knowledge of the process.
I’d actually just extended my visa, so I knew it was possible. We contacted the immigration offices, let them know we had a bunch of visa applications, and asked if they could help us out if we sent them all in at the same time. They said no problem. And our service was off the ground.
So we posted on the hostel page and in Facebook groups that we were offering visa services, and we were overwhelmed with the response. I’m talking $4k of revenue in 3 days.
Now the government has publicly granted amnesty for anyone overstaying their visas in Thailand due to the coronavirus, but we were able to provide a stopgap solution. It was good for everyone trapped and good for business.
US Small Business Administration
Since I’ve still got a business running in America, I decided to check the Small Business Administration to see if they could help me out during this time.
I saw they had a loan application for affected businesses, which is definitely a category I fall into. I applied for a $10k loan, and it was fairly straightforward. Enter basic info like number of employees, revenue, cogs, etc., then they’ll give you a loan registration number and let you know they’ll be in contact. I’m still waiting to hear back from them, though.
The main thing is that you should look for any government offers that’ll get you the funding you need while times are hard. It shouldn’t be your only plan, but it definitely helps. (Editor’s note: a little more on the stimulus package and small business loans here.)
Don’t be ashamed to grab the cash. Whether it’s teaching English for $10 an hour or delivering food on a scooter, any income is good during a crisis. Make sure to shore up your safety net, and you’ll have a lot easier time down the road.
You never know where life will take you, but you’ve gotta get moving first. Start something new and see how far you can take it. If you’d told me a year ago (or two months ago), that I’d be doing grocery delivery, I would’ve laughed. But making the pivot was the right call, and because I got in early, I’m reaping the rewards. Go get it.
Cut aggressively and don’t look back. There’s always something else you don’t need that’s draining your funds, and you have to find those places that aren’t giving you real benefits anymore. Then you have to get rid of them. Now’s not the time to be sentimental. Repurpose that money to start working for you again.
Ask for Help
You’re not alone. We’re all going through this together, so don’t be afraid to ask for help when you need it. Whether it’s learning about new business opportunities, getting help with a loan application, or talking through your problems with a friend, this is the time to use your network for support. It’s tough times, so stick together.
Your Next Steps
Plan for 24 months of recession. You need to think about services that people can’t live without, then start working to break into those industries. Definitely do not get complacent. Even if you get some assistance from outside sources, this isn’t a vacation. It’s an opportunity for you to come out of this ordeal stronger than you were before, with a hustle that’s built to last.
Speaking of which, I’m currently in the process of planting more seeds. Literally.
We’re planting our own farm. Our goal is to deliver organic fruits and veggies straight to people’s doors, and chances are high that fresh produce will be a top priority for many over the next couple of years. We actually just started tilling the soil this week.
How’s that for a metaphor?