Optimism Remains Strong Among Small Business Owners

small business optimism

Impeachment. Trade wars. The 2020 election. Tariffs. With all the uncertainty around these and other issues, small business owners remain optimistic about the future. Yet despite the optimism, almost 30% expect a recession in the near future, and nearly 7outof10 small business owners feel that the presidential candidate are not focused on small-business issues. To be fair, with all the noise and constant constitutional crises, there not a loooxygen left in the room. That being said, it is still a time that more are planning for growth than a recession.

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.

Small Business Resiliency is Hitting Hard

According to the quarterly Wells Fargo/Gallup Small Business Index survey, small business owner optimism continues to climb even in these uncertain times. It’s somewhat uncanny. This index measure both present and future optimism, and both were up.

The Small Business Index measure of optimism
The Small Business Index measure of optimism. From gallup.com

The index is a composite of factors currently affecting the business climate. Surprisingly, these rises come from modest gain across a wide range of factors, not just one or two. In fact, when asked about their personal outlook, almost 8 in 10 small business owners were more optimistic than pessimistic. This has held relatively steady across the year, apart from a second quarter dip to 70%. 

Small business owner’s confidence remains strong, even though their confidence in the economy has shown some signs of weakness. 63% said the economy was excellent or good, which is stable in comparison with Q2 and down 7% from Q1. A climate like this is often associated with growth and business stability

But is this optimism going to last?

Although small business owners remain very optimistic, their confidence in the overall economy has shown some signs of erosion. Sixty-three percent say the current state of the U.S. economy is excellent or good. While still strong, this is down somewhat from 70% in July’s Quarter 3 poll but on par with Quarter 2, when 63% rated the economy as excellent or good.

Notably, 1/3 of small businesses expect an economic downturn in the next 12 months. Roughly a third think a recession is somewhat likely, and about 27% say it’s not very likely. Owners generally say their business are tied to the economy as a whole, with 84% saying it affects them somewhat to a great deal. 

Contrary to what we’ve reported froother sources, 3 out 4 small business owners feel they have the right strategy in place to handle a downturn, and nearly 90% feel that they are at least somewhat prepared to handle a downturn that might occur in the next few years. 

Are We Seeing Complacency?

While this data is all extremely encouraging fobusiness like ours who serve other businesses. However, there are so many risk factors that are unknowable. With so much uncertainty about the future of the country, it can be hard to accept that 75% of small business owners truly have the right strategy and protections.

We’ve talked before about how the trade war is volatile, and it influences the economyPlus, a weakened Trump is apt to do something rash and drastic, and who knows what his social media will result in for the market or politics. Even global tensions like Brexit can be a risk fosupply chain disruptions. We don’t want to sound too alarmist, but the list is a long one. How could yoprepare when no one knows with any degree of certainty when or if another shoe is going to drop. That’s why I find this statistic the most concerning of all. 

2020 Election & Small Business Desires

There isn’t any real consensus among small business owners when it comes to politicsTaxes/tax relief always tops the list, but it is fairly low, with only 1 in 5 business owners reporting it. It’s not surprising, as a number of small businesses did not see the amount of tax relief the big businesses did from the 2018 Tax Cut and Jobs Act. Aside from healthcare, which was at 11%, all the other political areas were under 10% for small business owner fears.  Based on this information, there doesn’t seem to be any real hotbutton issues rising to the top. Maybe this is due to sense of complacency, or perhaps we all have different issue depending oour local environments.

marketing politics

An Optimism Killer for Small Business Owners? Finding New Business

Finding new business remains the top challenge for small business owners. This has remained relative flat for the year. Competition from larger companies and tight labor markets were the next two major concerns. They also remained relatively stable over the year.

Summary

While owners remain upbeat about their future, one can’t help to wonder if some complacency has started to set it. Small business owners share some concern about a recession longer-term, and most feel like they have the right places in place to manage it. With all the uncertainty swirling around, I find the difficult to believe, but I hope I am wrong. 

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.

Avoiding 3 Critical Small Business Mistakes

Common Small Business Mistakes

We’ve found throughout our work with small businesses that there are three critical mistakes that you can make which can really harm your business. Today, we want to share the story of “Larry,” a small business owner that faced these three problems. Luckily, we were able to fix them, but we are sharing this post so others might be able to avoid them. 

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.

Larry's Story

Larry runs a small home services business. He came to use because he was struggling. His customers were disgruntled. He had stopped growing, and the perceived value of his services was dropping. As a result, the profits were dwindling. Larry was overwhelmed and needed help. He was constantly putting out fires, which could have been avoided. When we met Larry, we identified our three critical mistakes, killing his small business potential. This is where we stepped in, because we know how bad a mistake can be.

Larry and the Three Critical Small Business Mistakes

Like all small business owners, Larry was wearing multiple hats. Hwas so busy doing his work that he had little time to stop and think about if they were the right things to be doing.  It’s very important to face these issues head on, which can sometimes be a harsh truth to realize.

Critical Small Business Mistake #1 – Being a Jack-of-All-Trades 

At one point or another, weve all had to wear multiple hats, from being a CEO to being a janitor in a single day. However, just because we can do everything doesn’t mean we should. If we do, we run into the problem of our business running us. If a business owner doesn’t have control over their business, then they don’t have time to think about where the business is going.  

Larry was a workaholic. We all are. Larry’s situation worsened as profit became tighter. He found that he kept taking on more and more tasks to save money. What he didn’t realize that his inefficiency in those tasks were costing him in the backend. By the time he finished everything, he had little time and energy to take a step back and ask himself why he was doing everything. 

The first thing Larry had to do was learn to say ‘no’ and stick with it. In short, he had to delegate. We’ve touched on delegation and how to do it, so we won’t go into detail here. Suffice it to say, Larry was a task hoarder. The first step was to free up enough time where he could focus on the key issues driving his business.  

Critical Small Business Mistake #2 – Missing Prospects 

Larry was so busy that he wasn’t actively following up on leads. He would accept a “no” and move on, or worse, forget to call them back. The truth is a “no” today doesn’t necessarily mean a “no” forever. It often means “not right now”. Larry needed a better CRM system that pinged him to follow-up with responded ‘no’s 

It’s best practice to follow up with your leads, even if they had said ‘no’ in the past. This doesn’t mean become a spammer, but a nice, respectful ask is usually accepted. If you take control of your lead and prospect process, you may actually land a few new clients or more work from existing ones with some cajoling. A respectful outreach – key word, respectful – keeps you in mind so, even if they aren’t ready now, you name is still known. 

The worst was not calling prospects back or leaving comments unaddressed. It makes you look bad. Not only are you leaving money on the table, you are discouraging others from actively seeking you out if they seem previous post unaddressed. It makes you look sloppy, and it can often lead to businesses failing. 

Critical Small Business Mistake #3 – Not Listening 

Larry was a bit tone deaf when it came to subtle cues. Customers will always give you a clue as to how they think about you, subtle or otherwise. This is invaluable. It’s a gift that you can use to make your business better. Any feedback, positive or negative, is better than none. Feedback is actionable. Silence is not. Remember, not responding to feedback is worse. It’s best practice to answer all feedback. It lets customers know that they are being heard. By simply acknowledging a problem and trying to fix it can change a negative review into a positive. Completely ignoring the negative reviews will likely lead to more negative reviews.  

Getting Larry Back on Track

First, we went through our delegation exercises, and we uncovered the roles that Larry needed to delegate to free up his time. Second, we helped Larry find a CRM that could work for him. We got him started, and he assigned a role to one of his employees to manage it. Larry would still address the comments, questions, and inquiries, but not the day-to-day management of the system. Finally, we helped him find a social media manager. This role would monitor feedback and respond based on a script we developed. We also built an escalation process so the comments that needed Larry’s attention got it.

Larry's Results

It took some upfront investment in people and systems. We were able to help Larry secure the needed money (working capital) to hire the people he needed and purchase the systems necessary to improve efficiency. It took about 3 months for the effects to really show. After which, Larry started to see his business grow again. After six months, things were running smoothly, and he was able to pay off his line of credit within 24 months.

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.

Tariff Uncertainty Weighs on Small Businesses

tariffs

Tariffs are important, particularly when it comes to trade negotiations. From the US to China to the EU to the UK and beyond, trade and tariffs are important factors in our political system. As we continue to wait for Donald Trump’s perfect trade deal, the Chinese import tariffs are taking their toll on small businesses, dimming the overall business outlook for the economy.

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.

Economic Confidence Falls Among Small Businesses

Economic confidence is at its lowest level since November of 2012.  The monthly survey from the Wall St. Journal reported that 40% of small businesses expected the economy to worsen in the next 12 months, which is up significantly from the prior month (29%) and prior year (23%). 

The Reason? Tariffs.

Slightly less than half of the small businesses said that these tariffs are impacting their businesses. It’s not just the tariffs but the uncertainty that is rattling most owners. They don’t know how long these additional costs will remain.  They also don’t know what else is coming.  These together make it nearly impossible to plan accordingly.

The Ripple Effect

Less investment and slower hiring are the two most tangible short-term effects of this ill-conceived policy. 

“It’s hard enough to adjust to price increases, but it’s just more difficult when you are uncertain how the policy will unfold in the future,” said Richard Curtin, a University of Michigan economist. “For small firms that means being more cautious in your investment and hiring plans.” 

Supply chains are feeling the pinch. Customers are ordering less in advance. Fewer are making major purchases. 

“This is the strangest I’ve ever seen it,” said Wiscon President Torben Christensen, who has run the company for the past decade. “It’s busy. The economy is booming, but there is great uncertainty. A lot of it has to do with trade policy.”  

Small businesses can be more nimble, but they also have smaller cash reserves, making it difficult to deal with wild swings in demand 

“Travis Luther, the founder of Queen Anne Pillow Co., a Denver-based maker of high-end bed pillows, said larger competitors have accelerated purchases to get ahead of tariffs, something his six-year-old company can’t afford.”  

Price pressures limit the amount of excess cost that can be passed through to customers. 

Trump is clueless

Mr. Trump continues to reject the notion that his trade policies were hurting the U.S. economy. Instead, he blames the businesses as “badly run and weak companies”.  Neither of which is true.  Alternative facts and propaganda do not pay bills.  With impeachment in full swing, I wouldn’t expect his administration to get their act together anytime soon.  

What Can You Do?

So much of this is outside a small business owner’s control. However, there are a few things you can do.  First, is there anything you can do to increase demand through upselling, bundling, etc.? This can help you boost revenue can help offset some of the costs.  Second, is it possible to remove costs from your organization in other areas? This can help offset some of the increased cost of goods.  Finally, can you increase your price, even a little?  Any off-set is better than none. 

What we really need is stability, and unfortunately, I do not see that happening without a change in the Administration.

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.

4 Small Business Tips for Protection During a Downturn

protecting from a downturn

How can you protect yourself and your business from the impact on an economic downturn during times of struggle? Given our size and the limitations that put on our cash reserves and credit, small businesses tend to take a major hit in recessions.  Now is the best time to prepare while economic conditions are still relatively good to guarantee success in the long-term. 

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.

Yellow Lights Are Flashing

75% of economists predict that the US economy will enter a recession by 2021. Because consumer debt is higher now than right before the Great Recession of 2007-9, the next recession could be deeper and more severe than the previous one, according to some economists. A global trade war is ramping up and the skyrocketing federal debt also means our ability to fight one is less than it was then. 

Recessions Hit Small Businesses the Hardest

A study by the New York Fed showed that recessions hit smaller firms much harder than larger ones. This should come a no real surprise since small businesses do not have access to large cash reservice like large corporations often have.  Therefore, small businesses a more difficult time weathering declining demand.  Bank loans are harder to get in a recession, and this pullback in bank lending can sap small firms’ ability to cover their operational expenses. As a result, there is an increase in bankruptcies and closures.

A Downturn Is Inevitable

Given the decade of the current expansion, few small business owners have yet to weather an economic storm.  It’s easy to see how one could be lulled into a false sense of security.  Complacency is one of the key factors that keep businesses from reacting soon enough.  Making contingency plans for a downturn are as important as making plans for growth in order to protect yourself.  Failing to do either can severely impact your business.

How to Find Protection During a Downturn

We like to share the story of a client of ours.  Jacob was in business during the Great Recession. He runs a successful insurance business 

Jacob's Story

“I started my company in 2005 at the height of the housing bubble. We came into the market focused on focusing on home-owners. In 2008, the bottom fell out of the sub-prime market. Therefore, the recession hit those owners hard. Suddenly, the houses were underwater.  They couldn’t be bothered with insurance when they were worried about paying the mortgage”

Jacob had to learn how to protect himself during a downturn very early in his business life-cycle. Jacob kept his cool.

“Markets go down, but I didn’t panic. All of us were impacted by the recession. Therefore, both my clients and I were struggling. I used this as an opportunity to better understand their issues, and I had to get creative and come up with solutions to solve them.”

4 Proven Tips to Weather a Downturn

Jacob learned some important lessons that can be applied to all small businesses. 

      1. New revenue streams are key – If you can grow your topline by finding new and creative ways to solve problems allows you to offer more, better, or more relevant solutions to your customers. Is there money you don’t need to be spending?
      2. Always test your business, annually – This isn’t just smart advice for protecting against a downside, but also, for succeeding in the long-term.  An annual strategic review, even if it’s just a simple SWOT analysis, can help.  Understanding your exposure (weaknesses), as well as, your opportunities (new revenue) can help you plan for both growth and decline. 
      3. Protect your niche -  It’s important that you do not lose or dilute your core capabilities while chasing sales opportunities.  Protect your core.  It will come back, and you will want to be poised to capitalize on it. 
      4. Be creative in your offerings – Can you partner with other companies to expand your reach or increase your efficiency? Can you offer a revised product or new product offering that is better suited for a recessionary environment? Market yourself properly. 

Summary

In summary, it is important to remember that recessions don’t last forever. The economy will come back. You just need to make sure that you have a plan to manage a downturn and that you build enough reserves to ensure a protection during downturns.

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.

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.

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.

Dante’s Inferno – Business Fixes to Put Out the Fire

Afraid to Start a New Business

Where last we left off with Dante, we were discussing the ways in which his business needed repairs, outlining all of the issues that his restaurant had. Now we will look at the business fixes that helped Dante revive his restaurant and get back to growing at a successful rate. Hopefully they will help you as well. 

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.

Our Business Fixes for Dante

HRA ChangesAfter diving deeply into the problems of Dante’s restaurant, we came back to him with a plan. The great news was Dante’s food wasn’t the issue. Since Dante’s financial situation was a stumbling block for additional financing, we needed a plan that could be implemented cost-effectively. Fixing a business isn’t the hardest job in the world, but it takes time and skills so we wanted to start Dante off right.

The Turnaround plan

We recommended that Dante fix his business in a few key areas:

His talent 

Conduct a top-to-bottom review of his servers outlining the specific expectations of the role. After secret dining a few nights, we had some immediate recommendations. 

    • Implement a consistent hiring process, plus a performance evaluation for servers at 1 mo., 3 mos., and 6 mos., immediately 
His product 
    • Keep the existing menu but add either a creative special or a creative evening to keep his current customers while attracting new ones. No need to fix something that isn’t broken in your business
His pricing 
    • Change the pricing on a few of the menu items, cut back a few hours, and clear a few tables. 
His Marketing 
    • Stop advertising and offer discounts for Yelp! and Google reviews. 
    • Consider using alternative forms of marketing that can be done inside the business, like through social media 

The Price Tag

This cost next to nothing to implement. There was extra management time required for the reviews, but knowing they would be reviewed by customers, immediately improved service. Unfortunately, time is an important resource, but in the end Dante made out well.

The Results

It took a few months, but Dante was able to turn his business around. 

I can’t thank ProStrategix enough. I really didn’t know what to expect. They explained everything to me so I could understand why the recommendations were important. I honestly didn’t think these small changes could have such an impact. 

Dante is still in business and doing well. He took our business fixes to heart and has been able to thrive since. 

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.

Dante’s Inferno – The Restaurant Issues Causing Problems

When last we left Dante, we were discussing the situation was that left him needing to fight to stay in business. Now, we will look at what caused these problems, and how we can fix them before it’s too late next time. For Dante, his restaurant’s issues were the difference between success and failure, and we wanted to help him fight back. 

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.

Dante's Restaurant Issues

Start with the customers – they drive sales

e-commerce failures

The first place we started was to look at his customer base. We started by talking to them. We talked to the regulars, and we talked to the past reviewers. And we really wanted to know why they came back — and if they weren’t coming, why not? 

We learned a lot. For his regulars, it was a comfortable routine. They didn’t mind if the service wasn’t the best. The loved Dante’s food and enjoyed the experience. For the reviewers, they loved the experience, but the truth was that they felt that there wasn’t anything new. It was “been there, done that”.

To keep customers, you need to do more than satisfy them

It’s a common misconception that satisfying your customers is enough. And, that’s the first mistake that was hurting Dante. People are emotional creatures. We are driven by our emotions. The people who stayed were emotionally attached. Those who wanted a more varied experience were not. Unfortunately, his regular customers were not enough to keep the business afloat.

People are the most valuble asset

The second area we explored was his team. The restaurant business is rife with turnover issues. It’s the nature of the game. Dante was a chef, not an HR manager so his hiring and screening practices were not consistent. Therefore, the servers he hired were inconsistent. This led to varying degrees of service and varying degrees of satisfaction. Dante’s food was excellent. So, the first time you go, you might forgive the service because the food was great. The second time it happens. You aren’t likely to come back.

Pricing needs to include both fixed AND variable costs

The next place we looked was at his operations. One of the most common mistakes that restaurants make is not accounting for overhead in the menu pricing. Dante was a master at knowing what was popular, and he knew the cost of his ingredients to the penny. What he didn’t factor in was the cost to prepare, serve, and the other fixed costs of the business. Why would he, when his restaurant had other issues to think about? After doing all the math, we found that a few of his most popular items were his least profitable. Plus, we also learned that we could cut some costs by optimizing his hours of operation to better match peak demand. 

Spending on what matters most

Finally, we looked at where he was investing. Dante was spending on advertising, but it wasn’t working. Why? We asked some of the people who saw his advertising, why they weren’t interested in coming. The major reason was his Yelp! and Google reviews were old. Since they didn’t see anything recent, they didn’t think it was good and didn’t trust the star ratings. Dante didn’t know how much these reviews were driving demand so he was spending on the wrong tactic. 

A one star review can be very bad for business

Next Time...

We’ve gone through the problems. We’ve explained the situation. Tomorrow, learn how we fixed Dante’s restaurant issues and put his business on the right path once again.

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.

Dante’s Inferno – A Restaurant Trying to Stay in Business

We are going to do something a little different with our posts for you. Across the next three days, we want to show you a longer story with a lot to learn from. This is the story of “Dante,” a client of ours who ran a restaurant. Nearly 700,000 restaurants exist in the U.S., but the number of privately-owned ones by small business owners dropped off in the past few years. There are a multitude of reasons, but at the top of the list a lack of understanding of some critical business fundamentals and access to financing. Trying to stay in business isn’t easy, but we wanted to help Dante as best as we can.

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.

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Dante's Struggle to Stay in Business

A Great Start

When we met Dante, he owned a struggling small upscale dining establishment in Manhattan. During his first few years, Dante has had great success with his restaurant. He had a good location. He had solid reviews. His cuisine was new, and the design of his restaurant was appropriate for his target. But then…

Then People Stopped Coming

When we came in, that initial picture had changed. During his second year of operation, he noticed that he had more tables open than usual. He thought he would change up the menu, spend some money on advertising, and push for more Yelp! And Google reviews. 

After 6 months of this, he started to become increasingly concerned. People had simply stopped coming as often. He didn’t know why. The lack of customers was putting a financial strain on the business. He was late paying some suppliers so his business credit has taken a hit. There were unfortunate problems beneath the surface of the company that Dante couldn’t identify. A friend recommended that he talk to us to help stay in business.

Dante's Worries

In our initial interview, Dante said:

I started my business to follow my dream. The business started out fine, but lately, we haven’t been doing that well. Sales are falling and bills are getting harder to pay. I’m spending so much time thinking about the business that it’s not as fun as it used to be. I’m beginning to wonder if I made the right choice. 

Dante was worried about how he was going to stay in business. He had all the normal concerns. He was worried that the risks they took were the wrong ones. Dante blamed himself for how the business was going. He was anxious about what people would think if it didn’t work out. He was worried about living paycheck to paycheck in order to keep himself afloat. 

Next Time...

How to Help Dante

With companies in trouble, the first step we take is to analyze their business model. In other words, we looked at how he made or lost money, and what the biggest mistakes were behind the scenes. 

Next time, learn how Dante stayed in business and learn about what you can do to prevent yourself from the same problems he faced.