Regaining Control of Your Business Revenue

revenue

When you’re in a growth phase, there are so many areas where you could focus, the key is knowing which ones are the most important. Often times it can be financial, and about figuring out the flow of revenue in and out of a company. It can feel overwhelming. Some businesses shut down. Others spread themselves so thin that nothing goes properly. If this sounds familiar, you’re not alone. One of our favorite clients, Dr. Morgan struggled with this, and we’d like to share her story with you.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Dr. Morgan's Story

Doctor Morgan own and operates a successful dermatologist practice. She has more patient demand than she can see. She and her partner, a cosmetic surgeon, own a thriving anti-aging center in Manhattan. It’s one of the few remaining fields in Medicine where fee-for-service is still the main model of payment. Fee-for-service doctors are like painters in that you pay them directly for the service performed. There is no middleman. This takes insurance out the equation but adds some complexity due to the need to provide patient financing. Few patients can afford complex procedure with cash, so they work with a financing partner to help reduce the burden. 

A growth in revenue and understanding financial situations can really help your business
A growth in revenue and understanding financial situations can really help your business

Dr. Morgan and her partner were so busy performing procedures that the basic day-to-day operations of the office were seeing some strain. Patient wait times had increased. Patients were having a harder time booking appointments. Bills were getting pay on-time, but just barely. The list goes on. She and her partner needed help, but neither could afford time away to get it done. 

Where to Start When Understanding Revenue

Revenue Forecasting Model 

Knowing what your revenue is and could be over the next 6 to 12 months helps you determine your resource needs: people, equipment, etc. Keeping accurate records of your sales figures can help you build a forecast model. Thankfully, it isn’t as hard as it sounds. All that Dr. Morgan’s practice required were a few simple tools on Excel, although it does take time to set it up at first.  

Importantly, it does require keeping current. However, the benefit is knowing what you can reasonably expect from the future of your business. This will help you tremendously when trying to regain control of your business. Dr. Morgan didn’t have a revenue forecast, so she couldn’t say for certain the staff she might need, or whether her growth was becoming constrained, or if she and her partner did have enough doctors, and so on.

Getting Paid  Accounts Receivable 

As simple as this sounds, getting paid isn’t as easy as it seems. If you don’t have resources dedicated to following up with getting money owed to you, you give your customers an interest free loan. Dr. Morgan had an office manager, but the manager was so busy running the day-to-day of the office that bill collecting often fell on the wayside. Some of Dr. Morgan’s accounts without receiving funds reached up to 60 days. She had enough revenue that this wasn’t noticed right away, but it was costing her money that could have been helping her grow.

Understanding Revenue helps to keep your business working properly
Understanding Revenue helps to keep your business working properly

Paying your Bills  Accounts Payable 

Your business credit score is almost as important as your personal credit score. It’s how you develop and maintain a trustworthy reputation. Too many strikes, and your banks or suppliers might no longer want to do business with you. Dr. Morgan’s office manager was responsible for both. If getting paid is problem, then paying bills is almost assuredly an issue as well. And for Dr. Morgan, this was all too true.

Having Enough Cash on Hand 

As a saying goes, “Profit is like food. Cash is like air”. You can live a few days without food, but you’ll die instantly without air. Cash wasn’t a problem for Dr. Morgan, but it could have been managed better. She didn’t have the right financial revenue flow in place, or she would have seen the problems. Dr. Morgan’s accounts receivable and accounts payable were out of whack, which meant that cash was tied up. What could have been used for other things like expansion instead were lost. 

Having Enough of the Right People 

Human resources are the raw material of today’s economy, and that means you need the best resources to survive. Just like how low quality iron creates low quality steel, low quality people provide low quality service. Even if you have high quality people, your capacity is limited, or service suffer if you don’t have enough people. Dr. Morgan had a great team, just not enough of them.

Hiring the right people and having the right employees can have a huge imact on revenue
Hiring the right people and having the right employees can have a huge impact on revenue

Getting a Grip on the Fixed Assets You Hold 

A business can have a lot of capital tied up in fixed assets – equipment, furniture, etc. This may seem super boring, but smart depreciation can help when it comes to tax time. Keeping good records of major ticket items is important. Dr. Morgan was very good about this, so it wasn’t an issue for her. However, my small business owners can misclassify their assets, so talk to your account to make sure this doesn’t happen to you.

How We Helped Dr. Morgan

First, we started with revenue forecasting. Neither Dr. Morgan, her partner, or her office manager had the time to build one. So, we built one for them. We used their past 2 years of appointments and built a 12-month rolling forecast. All her business manager, a new hire, would need to do was upload the latest appointments for the month and the total revenue at the end of each month, and the model did the rest. 

Next, as we implied, the forecast enabled us to justify the need for a new hire to separate the office manager role from a business manager role. The office manager role was changed to focus solely on the office operations, e.g. appointments, wait time, release, etc. The business manager was now responsible for A/R, A/P, monthly reconciliations, assets, and revenue. This addressed and partially solved all the points above. Now there were people responsible for the day-to-day operations and for the financial survival of the office.  

Besides systems and the business manager role, we also recommended including other staff in terms of Nurse Practitioner or Physician Assistant to cover the simpler procedures and free up Dr. Morgan and her partner for those that require their higher level of skills.

Results for Dr. Morgan

These additions greatly helped Dr. Morgan gain control of her business. She and her partner and continued to grow. She was able to take a long vacation for the first time in years. In the past 12 months, she expanded to an additional location in Manhattan.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Recession Talk Has Died Down… For Now

Recession

Consumer spending drives the U.S. economy, and for now, it seems to be holding off a recession. However, it may be plateauing, or possibly leading into an eventual downturn. The consumer confidence index was in the 120s for September and Consumer spending was flat in August. It looks like the economy is holding its breath as we deal with both impeachment and looming Chinese tariffs.

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

The U.S. Economy Is Driven by Consumer Spending

Consumer spending makes up close to 70% of the Gross Domestic Product (GDP). David Geller, a behavioral economist, said “a 5% reduction in spending comes out to 3.5% of the U.S. GDP. This amounts to more than the projected GDP for 2019”. Therefore, we need to keep an eye on consumer spending as we enter the holiday season.

The Money Anxiety Index

Mr. Geller developed this index as an early warning signal for consumer spending. The index includes several economic factors to estimate the worry and stress consumers feel. This index has been around in 1959. 

Its historic high was 135.5, which hit during the major recession in the 1980s, and its historical lows were in the 1960s. The long-term average over this 60-year range was 71. This index has been shown to be a good predictor. For example, it predicted the Great Recession nearly a year before it was officially announced in December of 2007. 

So, Where Do We Stand?

The Index in September stood at 41.0, which is down since the bump-up in June, July, and August. Given, the figures are low and have ticked down, an imminent recession does not appear likely.

An example of our current recession possibility
Image: Money Anxiety Index

The down-tick in September matched with an increase in Michigan Survey of Consumer Sentiment index, reported to be 96.0. 

A second chart showing the possibility of a recession
Image: Michigan Survey of Consumer Sentiment

Summary – No Immediate Threat of Recession, but That Could Change

Based on the numbers, they do not indicate a recession is on the short-term horizon. However, given the impeachment inquiry and likely vote for articles of impeachment, in addition to the potential Chinese tariffs looming in December, things can change rapidly as we end 2019. 

Given all the uncertainty, it would be wise to keep our ears to the ground and keep an eye on both these indices in the months to come. While a recession may not be imminent, it’s not a bad idea to have some contingency plans.

LinkedIn Imposters – What You Need to Know

fake profiles

If you are on LinkedIn, then you’ve probably met more than a few imposters. Most are easy to spot. They say the work for a major company, but their location is nowhere near any of the company’s locations. Maybe they have no experience but come with a pretty face and nice sounding title. Needless to say, they’re all over the place. And you should probably pay attention for the sake of your own cybersecurity.

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

The Good News Is LinkedIn has Acted

In the first half of 2019, LinkedIn blocked nearly 22M fake accounts. Yes, that’s an M for Million, but it’s only 3% of the total # of users. LinkedIn has more the 645 M users. But, as anyone know who is active on LinkedIn knows, that number seems very low. According to LinkedIn, 98% of the fraudulent accounts were removed or blocked using the automated defenses put in place by the network, while the remaining accounts were spotted by people, according to GeekWire.

LinkedIn Imposters are hard to

Why Should You Care about LinkedIn Imposters?

There are two reasons that you should care. First, fake accounts get in the way of true networking. LinkedIn is an important tool for many people, especially in the professional services market. Fake accounts take up your valuable time as you need to sift through the phony requests to get the those which a relevant to your business. Fake accounts might boost your numbers, but they won’t help you gain more business. If you deal with business-to-business marketing and communication on LinkedIn, then you really need to be certain that you aren’t accidently falling for an imposter.

Second, LinkedIn, unlike Facebook and Twitter, are actually trying to take actions so these fake accounts don’t harm their credibility. We all know the number is higher than 3%, and we can be part of the solution. When you suspect as suspicious account, report it to LinkedIn. I know it’s an added step, but it might help ensure that less of your time is wasted in the future. Plus, you don’t want to become victim to a phishing scheme or something else disastrous. 

These are simple steps to take in order to protect yourself from problems in the future and for the safety of your business.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Online Reviews – Quantity over Quality?

Online Reviews

Online reviews matter for small businesses. Good reviews can take your business to another level, but bad reviews are expected to cripple a business. When it comes to online reviews, it may actually be quantity over quality according to a study by WomplyWomply found businesses with over 200 reviews earn twice as much as the average firm. 

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

What Is Womply?

Womply's information about online reviews is groundbreaking
Womply's information about online reviews is groundbreaking

Womply, a San Fransisco based small business software company, used data from more than 200,000 businesses across the country.  They found that roughly 4 out of 5 reviews are positive.  The shocking news was negative reviews didn’t necessarily mean a loss in revenue, and surprisingly, 5-star ratings didn’t necessarily yield more revenue.

Replying Is Key

Based on their research, the three most important things were: having more reviews, recent reviews, and frequent responses. What was surprising was that, according to Womply, businesses that have up to 50% negative reviews online earn nearly the same as the average business (20% negative).   Businesses that respond to more than 20% of their reviews earn over 40% more than those that don’t respond at all.  

Fears of Negative Online Reviews are Mostly Unfounded

Based on these data, it’s more important to interact with those who review you than it is for them to like you.  It seems odd, but that’s what the data say.  And, when you come to think of it, maybe it doesn’t.  It may just be human nature.  If someone took the time to write you a note, you’d probably take the time to reply.  People seem to respect that. 

 

A Bad Review is all it takes to hurt a business
A negative online review used to be scary, but now is something to deal with sensibly

We are often reluctant to ask for reviews out of fear of someone saying something negative, but these data show that those fears are mostly unfounded.  Reviews negative or positive provide an opportunity to improve your business and have a better handle on quality control. 

Other major findings...

      • Not all businesses are treated equally – if you’re a taxi driver, hotel, or in real estate, people can be harsh. 
      • Ignore your listings at your peril: Claiming your listings on at least 3 major sites can yield an extra $100K vs. the average business and $200K vs. those who ignore them. 
      • Google is king when it comes to Online Reviews, over  
      • Consumers spend a lot more at businesses (over 50%) that reply to reviews. 

Branding: How to Stand Out Against Competition

Branding

Human beings are pattern seekers.  We conserve our mental energy by creating little files in our minds about people, places, and businesses. In a sense, everything is branded. It is both about marketing content to others, and about making a sale. It’s the sum of the experiences someone has packed in a box.  Once that box is formed, it’s very hard to change what your branding is to the public.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Alice's Story

Alice owned a trendy pop-up storefront and e-commerce business that sold unique, hand-crafted jewelry, clothing, and accessories. She worked with an artist collective, so she had access to a trove of unique and original designs, which she sold on consignment.  She grew so quickly that she was finding it difficult to vet the artists and curate the collection as much as she had in the past.  

Alice's Problem

What made her unique was the carefully curated assortment of one-of-kind designs.  She did realize that by being so busy growing that she was at risk of damaging her brand.

social listening

Branding by Default 

The fact is that most small businesses have a brand by default rather than by design.  It’s human nature to create brands – no matter what. We do it all the time.  It’s sometimes hard to recognize that fact. If you do nothing, people will create a story about you. It’s better to direct the narrative than to have the narrative directed for you.  

Alice‘s Brand 

Having a brand by default isn’t always a bad thing.  As in Alice’s case, it was good thing. She lucked out. However, not understanding that you have a brand is terrible thing. Why? Because if you don’t know what it is, how can you stay true to what it is that makes you unique and special.  Alice fell in the latter case. She didn’t realize what her brand was when she started to grow beyond it. If she did, she may have been a bit more careful. 

An example of how Social Media branding can create a complete reinvention of your brand
An example of how Social Media branding can create a complete reinvention of your brand

Luckily for Alice, She Caught It Before It Was Too Late 

Alice had a strong and loyal Instagram following. She started notice more negative and less positive postings about her latest collections. Alice was smart and she started asking why.  She had responses like: “…becoming more generic…”, “it’s just not you anymore”, “…been there, seen that…”.  In effect, she was drifting from her brand, but she didn’t really know it. There were expectation that she didn’t even know about. 

How Did We Help Alice Find Her Brand? 

Alice reached out because she wasn’t sure what to do. She wasn’t sure why her fans weren’t happy. She didn’t realize it at the time, but her Instagram was her early warning system, and it worked beautifully. This is something Alice didn’t even think about at first, but it eventually became important for a young business

Step 1 – What Should the Brand Be? 

When developing a brand, you need to start with the target. The target is the ideal customer. This is person you most want to reach.  Alice had a strong base, but she didn’t have a clear understanding of what made them tick.

Our first task was to talk to these customers and understand why the loved Alice’s products so much. In Alice’s case, it was so they could feel unique and distinctive. Wearing Alice’s line made them feel trendy. No one else had something quite like what they bought from Alice.  Alice’s point of difference was the uniqueness and her eye for creative, functional items.  People weren’t buying Alice’s artists, but they were buying Alice’s sense of style and curation.  That was her value. That was her brand. And that helped her grow.

Step 2 – Stay Consistent 

This is where Alice made her mistake. She got so busy running the day-to-day operations that time she used to dedicate in researching and curating her collections suffered.  As that suffered, the brand suffered.  To get her back on track, we needed to figure out how to free her up. For the brand to keep growing, she needed to curate more, not less.

Social Branding hits every aspect of how you reach your audience and how they reach you

Step 3 – Built the Right Scale 

It was clear Alice needed help.  We took her through our delegation exercise to identify the tasks she needed to do, and those she didn’t need to do.  We were able to create job descriptions based on this work, and she was able to hire the right people to free up her time. 

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

The Smartest Tech for Small Businesses

Smart Tech Small Business

As small business owners, rarely do we have time to invest in researching new technologies. There are a lot of different kinds of technology out there to be aware of, and there are a number of things to be afraid of, too, when it comes to cybersecurityIn this post, we hope to help cut through the clutter and share with you the best, new smart tech that can save you money, boost sales, and improve service.

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Smart Tech for Security

A smart security system can reduce your insurance premiums and help reduce theft or shrinkage, which is a major concern for many small businesses. 

Stopping Unauthorized Entry

SimpliSafe and Abode offer very affordable options that cover the basics, doors, windows, motion detectors, etc.  They provide instant alerts to your smartphone and can be integrated with local police.  

A smart lock can help you limit unauthorized access, especially if you have multiple people coming in and out. These systems only provide access when authorized and track entry and exit.  They can be activated by individual codes, cards, or keyless access. “Kwikset Kevo and Schlage Sense are two robust options.”

An example of Smart Tech, a Nest Camera

Reducing Risk 

Many smart tech devices can also protect from damage due to fire, leakage, and other costly accidental damage. They are easily integrable with your smartphone and local emergency departments such as fire, etc. 

Reduce Theft 

A new brand, Kogniz, offers facial recognition software which can help monitor employees and help identify shoplifters and other shady behavior and unsavory clientele. 

Smart Tech for Saving Money

Utility use is not a major driver for most businesses. But if you can save a few dollars here by cutting unnecessary costs, it can add up. 

Smart Thermostat 

A smart thermostat can help cut your energy costs.  You can have it learn your hours of operation and integrate motion sensors to adjust inrealtime to changes in the number of people in the space. 

Smart Lighting 

As with a smart thermostat, smart lighting can also reduce costs. A complete system of LED, sensors, and remote access can really improve both the efficiency of your workplace. This is especially important if you have flexible work hours or less or more access to natural lighting.  Phillips offers a great package, as does Lutron, Wiz, and others. 

Smart Tech in lighting is a major game changer

Smart Tech for Improving Service

There are two new ways that tech has really improved customer service.  These are digital assistants and chatbots, two A.I. based services. 

AI and Lending

Digital assistants 

The most useful role for digital assistants is to provide a more seamless way to schedule meetings, link e-mails, track calls, ensure follow-up, and make sure data are easily accessible.  They can also serve as a hub for all your smart devices.  The one risk is to read the fine print.  Some tech devices are nosier than you think.  You don’t want them eavesdropping on your conversations.

Chatbots 

When used properly, chatbots can be very effective and not off-putting. We all have had bad experiences with poorly executed chatbots.  While many will say chatbots can perform functions humans can, the truth is right now, they can’t.  Don’t waste your time trying.  These are best used when there are simple FAQs that help get people to the right information quickly. 

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Succeed During Downturns with These 4 Proven Tips

Managing a Downturn

Just this summer, we were discussing how growth was challenging small business. A few bad policy decisions, and bam, now, we are looking at the real possibility of a downtown. But there are ways to succeed, even during a downturn.

Unsure of how to take your business from good to great? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

1. Keep Cash on Hand

Make sure that you have enough cash on hand to cover two months of expenses. You should plan to have enough access to cash to manage a slump in sales. In truth, it is unlikely that you will have two months without revenue. If you avoid wasting your reserves, you are buffering yourself against a revenue shortfall of up to 16.67% of a year. This gives you enough to remain successful during an economic downturn, plus a bit more to pursue opportunities as soon as the storm breaks. 

2. Choose Your Customers Wisely

The last Recession still has effects that are hitting America over a decade later, and a new economic downturn could be just as bad

It may seem counter-intuitive to become more selective in a downturn. But, if you issue any credit, e.g. get paid after the service is provided, you need to make sure that the business you take on isn’t going to stiff you with the bill. It may be tempting to take all the business that you can during a downturn, but if your prospects aren’t serious, well-funded, and/or managed, it is a risk you need to be willing to take in order for success.

3. If Possible, Shift Your Mix into More Countercyclical Areas


While we don’t recommend waiting until you’re in trouble to hire a consultant, the reality is, most people don’t seek help if they don’t believe they have a problem. Therefore, our type of work tends to be somewhat countercyclical. Are there areas in your business where you can focus that are more recession-proof?

4. Don’t Be Afraid to Grow During Downturns

In every downturn, there are still industries that are successful. As long as you have a buffer, as discussed previously, it’s smart to invest if a strategic opportunity or hire comes along. There are plenty of bargains to be had if you are in a position to acquire them.

An economic downturn hitting the country might really change how our country is looking in 2019

Why Planning for a Downturn Will Help you Be Successful

We don’t know what will be happening throughout the rest of the year, or if a recession is likely. In the long-term, it is hard to say what will happen. But if you can keep a hold on your money and be aware of how to prevent issues before they happen, you make be able to get away safely.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

The US-China Trade War — What to Know About It

US China Trade War

Small business confidence has significantly dropped to its lowest level since 2017. It’s now below where it was before the new tax cuts. Why? Concerns about trade, and especially concerns about the US–China Trade War. 

The effect of Trump’s trade war is starting to take its toll. According to poll sponsored by CNBC|Survey Monkey, there’s been a sharp uptick in the expectation of a negative impact from trade policies. But we didn’t need this poll to bring this to light for us. One import/export client of our Miguel has been experiencing concerns, and his story is a good example of how to navigate these trade concerns.

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Miguel’s Story

Miguel operates an import/export business here in NYC. He does a lot of work with both Mexico and China. Both countries where uncertainty around trade policies have had a negative impact on his growth. 

“I export and import goods to both to/and from both Mexico and China. I don’t know what’s going to happen from week to week. It’s causing problems for both my suppliers and customers.” 

Miguel haactually seen demand for his US manufactured goods fall as well. He’s not alone. In September, Reuters reports:

An example of the deficit in trade that has led to this conflict between the US and China

The index of national factory activity dropped 1.3 points to a reading of 47.8 last month, the lowest level since June 2009, when the recession was ending. A reading below 50 indicates a contraction in the manufacturing sector…September’s reading marked the second straight month that the index broke below the 50 point threshold.

How We Advised Miguel

This is a very challenging environment for anyone in the import/export business. A trade war like the one between the US and China is hard to navigate. So what on Earth can you do? Due to all this uncertainty, any option contains risk. There is no easy solution. One more month of contraction, and the US manufacturing sector will be in a recession – so much for bringing manufacturing jobs back to the US.

Cut Expenses

The US-China Trade War is one with finance, not with weapons

Miguel’s business had been growing at a healthy rate, but in the past three months, that growth has slowed. There’s no reason to believe that any sanity will return to the trade policy area any time soon. In the short term, Miguel needed to cut back on some of his expansion plans, and limit his use of overtime. We also suggested looking at other ways to trim expenses.

Build Enough Inventory to Manage the Holidays

While the manufacturing sector seems to be trending towards recession, the consumer sector does not. He, like many others, was diverting his cash from spending to inventory building for the holiday season. It’s risky, as the consumer sector could head that way by Christmas, but better to have enough supply at the pre-tariff rates than have to rush order. Thankfully, Christmas is recession-proof, US–China Trade War-proof, and crime-proof

Explore Other Markets

This is easier said than done. Miguel’s connections are already established in both countries. But we have to be realistic. We decided to spend some money to research other markets unaffected by current trade policy. We began to look at Brazil and other South American markets as potential alternatives to Mexico, and Vietnam and other Southeast Asia countries as alternatives to China. We’ve made some headway, but this is slow and costly. 

The US-China Trade War is mostly just a fingerpointing campaign between two superpowers

How the US-China Trade War Trickles Down to Main Street

“That really bright outlook we saw two years ago has waned,” said Molly Day, vice president of public affairs for the National Small Business Association. “We’ve been pretty concerned with threats of tariffs.”  

Since Miguel is a distributor, he is like the canary in the coal mine. No one knows what the US–China relationship will result in, or how the trade war will play out. We are also concerned about the effect this will have on smaller retailers, as they are least able to absorb cost shocks. No matter what, it is a precarious time for sure.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

How to Build the Ideal Marketing Budget

Defining a marketing budget for your company could save a lot of trouble in the future

In budgeting your company, marketing requires a leap of faith. There’s just no other way to say it. You usually have to spend money upfront, without really knowing if you will get an ROI until later. Look, it makes everyone nervous, even us. But, there are some guidelines that can increase your chances of success. We want to share a story about a client Elena.

Feeling like your business isn’t going the right way? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Elena's Story

Elena haa successful salon. In her first few years, she grew rapidly and expanded to a new area. She was concerned about her second location as it was having the same growth as her first. He first salon was maxed out. She really didn’t have the ability to add more clients. Her second salon was growing, but her overall growth had slowed down. She was concerned. The second location was doing slightly better than breaking even, which meant her profit growth had stalled. 

A budget is needed for marketing to reach the audience you need.

The good news was this wasn’t a flaw in her business plan, she was fine from a financial standpoint. Instead, her issue was with marketing planning and budget, and specifically the marketing her 2nd location.

How Did We Help Elena?

For starters, it’s good to have a rule of thumb for how much you should invest in marketing. The U.S. Small Business Administration (SBArecommends spending 7 – 8% of gross sales on marketing if you’re sales are < $5M a year. Our rule of thumb is 10% because it’s simpler.

Step 1 – Goal Setting

So, back to Elena. Elena’s goal was simple. Drive more appointments at her 2nd location. That’s clear. But not SMART. For goals to be as effective as possible the should be SMART: Specific, Measurable, Attainable, Relevant, and Time-bound.

Elena’s goal was specific but was it specific enough? Would 1 appointment more be sufficient? 10? 100? It’s hard to know what you should do unless you are crystal clear on what you need to attain. That was the first step. We decided on aadditional 10 appointments/week within the next six months as our SMART goal. 

A marketing funnel is a good example of how a budget can pay off with marketing

Step 2 – The Marketing Budget

We can’t share Elena’s exact financials, but we agreed to use our 10% of gross sales as our rule of thumb. This gave us plenty of money with which to budget a solid marketing plan. This is a salon business, so visual media were key. In deciding on our marketing mix, we focused on social media, website enhancements, e-mail, Google My Businessand yes, old-school, direct mail. More on that in a minute.

Step 3 – Putting a Plan Together

Elena is an Instagram genius. She built her brand predominately from Instagram. It’s the perfect medium for her work. It not only build her following, but it also helped her in local search. However, this became a problem because, since both locations had the same name & account, all the Instagram work was being attributed to her primary location. This was what we had to fix.

The new plan was to: 

      • Keep the old Instagram account our maintain our efforts on it
      • Start a separate Instagram account for the new location (with a content calendar) 
      • Rebuild the website so it was clear on the home page that there were 2 locations
      • Start a Google My Business for the 2nd location (with a content calendar) 
      • E-mail & direct mail

You’re probably thinking, what? Mail? Really? Well, the truth waabout 10-15% of Elena’s clients actually lived closer to her 2nd location, but only came to her first. They just didn’t know or were afraid to try a new stylist. So, we did a combo of e-mail and direct mail to let them and their neighbors know that there waa more convenient option for them. In those mailers, we provide discounts at the new location. We also held events at the new location where the top stylists would there as ‘guests’.

What a Marketing Budget Can Do

This worked beautifully for Elena. We hit the 10 appointments/week goal within 4 months instead of 6. This waan inexpensive plan, which was easy to implement and measure. Now, Elena’s business is able to grow and she is doing better than before at both of her locations, all thanks to an improved marketing budget.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Generate Leads for Your Small Business with These 3 Tips

Lead Generation Hacks

Generating leads is one of the hardest things for a new small business to do. To get a client base, you first need to get clients. We have trouble with it sometimes, and many of our clients have talked with us about their issues with it as well. When you start, no one knows who you are or what you do, and why they should work with you. We live in an over-sold world. Skepticism is aaall-time high. Plus, competition is now global. It’s tough to breakthrough. To help you, though, we wanted to give you our three steps to sell aa new small business. 

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

1. Have a Clear, Crisp Pitch

People’s attention spans are shrinking. You need to be ready for that. You need a concise pitch that explains what you do. Pitching is important for a number of reasons, from getting loans to getting customers.  

Here are two good pitch templates that we’ve used in the past. They’re simple. They’re direct. Each shows how to make the most of the differentiation you have. Importantly, they work.

If you have a unique benefit only you can provide: 

[Enter Company Name] is the ONLY [Enter Industry or Competitive Set] that provides [Unique Point of Difference]. That’s because [Support Claim #1] and [Support Claim #2].

If you provide service in a way that might not be “unique”: 

[Enter Company Name] is a [Enter Industry or Competitive Set] that provides [Point of Difference] [better, faster, cheaper, etc] than [competitive set]. That’s because [Support Claim #1] and [Support Claim #2].

Generating Leads is a key aspect of marketing yourself to others

See, it’s basically like a business-oriented MadLibs! And the best part is, it will help you with generating leads in the future. These are two templates for you to start with, but there are a lot of options for your new business

2. Be Seen as an Expert

One of the things that we aProStrategix do is to post articles almost every day, like this! And trust me, I know it’s hard to deliver quality content on a daily basis. You won’t always get it right, but after a while, you will see which content your target finds the most useful. Armed with those insights, you can create an editorial calendar that focuses more on what people are interested inand you can showcase your skills to a larger, more engaged audience.

3. Be Smart with Your SEO and Landing Pages

An example of the importance and work of lead generation, and the payoff of it

SEO is often touted as the holy grail. It’s not quite that, but it is important. SEO is like micro-targeting. You have to find that patch to own. Then, build from there. It’s tough when you want to serve a bigger marketplace, but micro-targeting your content to specific narrow audiences does help to generate leads. The same is true for your landing pages. The tighter and more relevant the content is to person, who lands on your site, the better. They are likely to stay longer, bounce less, and provide you with insights on what’s working or not. 

What Happens After You Generate a Lead?

Ultimately, it’s the conversion that counts, and that goes up the more they interact with your content. Hopefully, you can generate the leads you need to grow from a new business to larger and better things.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.