Business Ideas – Business Lessons from Jenny Craig (food & service entrepreneur) by Evan Carmichael
Today we’re going to look at how a gym manager mortgaged her house to start a business because she saw a need, moved to Australia, and later sold her business for $600 million. This is the story of Jenny Craig and the top three lessons you can learn from her success.
Action Item #1: Promote, Promote, Promote!
Building a better mousetrap is not enough anymore to get a company off the ground. You need to aggressively promote your business to make sure your customers know that you exist. From advertising and public relations to search engine optimization and social media marketing, you have many opportunities to spread the word about your company and you should never take your foot off the gas!
In the company’s early years, Craig made sure that exactly ten percent of sales was directed back into commercial advertising each and every year. Individual franchises were also expected to spend ten percent of sales, or at least $1,000 a week, on local advertising for their own centres.
They used traditional advertising on television programs, leveraged celebrity endorsements, and created direct mail campaigns. But they also tried many offbeat approaches. As one example, Sid got the company a lot of publicity during one televised international cricket match, where cameras picked up on a sign in the crowd directed at the captain of the English team that read: “See Jenny Craig. Quick.”
Action Item #2: Offer Products and Services
I believe the best way to build a business is to start a service – it’s low cost and gets you close to your customers. Your chances of survival are much higher and you learn what future services and products your clients need. Once you’ve established a base of customers and know exactly what’s missing in the marketplace, you can create your products. You’ve got cashflow from your service business to keep the company running and you’ve got a loyal group of clients who are ready to buy!
Jenny Craig had the same philosophy. Her business started with Jenny Craig centres where they would help clients establish a workout program, offer nutritional guidance, and also give motivational services. Her business grew every year as she added more centres and people to her team. It was a very successful service based business.
Jenny Craig’s big break came when she started offering prepared food products as a part of her offering. She brought on board a highly qualified staff of dieticians, psychologists, and physicians to help her create a menu that was healthy and nutritional. In doing so, Jenny’s Cuisine became a central component to her program. All of her clients were required to purchase these portion and calorie controlled foods, which included over sixty different breakfast, lunch, dinner, dessert and snack options. Jenny’s Cuisine proved so popular that the company’s gross revenues from food sales increased to 91 percent by 1993.
Action Item #3: Never Give Up!
Just like I discussed in my last post, it’s important as an entrepreneur to never give up on your idea. Every business owner will face a moment of crisis which forces you to think whether it’s all worth it – the long hours, the mounting debt, the personal sacrifices. These moments will help define you as an entrepreneur. It’s the founders who stare those moments square in the face and keep on building who go on to be the ultra-successful entrepreneurs.
From losing weight, to starting her own business, to not being able to run her business in America, Craig has proven that with perseverance anything is possible. When the Craigs first sold their chain of Body Contour gyms, they did so in agreement to a non-compete clause. They were not allowed to set up shop again anywhere in the U.S. for two years.
And so, refusing to wait two years before they made their next move, the couple went on a search for their next destination. Where could they begin their new line of fitness centres? What country was similar to the U.S. in terms of diet and fitness levels but presented no language barrier? The Craigs decided on Australia. Their friends thought they were “nuts” but the couple never gave up and turned their new business into a company that sold for $600 million.