Know Your Numbers
Let me tell you a story about a franchise business that I saved from the brink of bankruptcy.
It’s so important to know your numbers. When I say numbers I mean your finances, not how many children you have in a class.
I mean what does it cost you to run the business, to host those classes. There are so many costs to keep track of from insurance, venue hire, travel, fuel, marketing, payment gateway fees, subscriptions through to your management fees if you’re part of a franchise.
You need to be tracking your income and expenditure daily. It’s a simple equation. If you don’t have enough money coming into the business each month to cover your costs, then you’re not viable. If this is happening every month, then you need to act, because something isn’t working.
When was the last time you did a financial audit of your business to see how it was performing?
When this business approached me asking for help, they had £100 in the bank and owed money to venues and to their franchisor. Technically they didn’t have the funds to pay their debts, therefore they were bankrupt. It just all crept up on them all of a sudden.
They were looking for help to create more sales in their business and they wanted to launch a school holiday programme.
You might be thinking they were crazy to even think about launching a school holiday club when they had no money in the bank, but holiday clubs can be lucrative, so it needed to be part of the business plan.
The first thing we had to do was take action to cut expenditure with immediate effect.
- They cancelled all subscriptions with immediate effect.
- They Spoke to venues to ask for a payment plan.
- They spoke to their franchisor.
- Took all their activity outside where we could use free facilities.
- Reduced and merged classes to cut venue hire time where they had to stay indoors.
Once they had done that, we then looked at income. We put a plan in place to chase all customers that hadn’t re booked to drive sales. This meant contacting them all individually via phone, email, and text to get an answer if they were re-booking or not. The aim was to get cash flow moving asap and to also know where exactly we were with the finances. We invoiced partners for work that due to take place that summer to get cash into the business and actively went out to seeking work from within the community. We then put a strategy in place to bring new children into the business for the current classes.
This all happened in April.
The business had just hosted their first Easter Holiday Club, which we needed to do as the plan was to run a summer holiday programme. The May term then became a matter of just seeing the term out and making sure they broke even.
I knew that a summer programmme was going to save this business and get it in a good position financially for September. There was an opportunity to host 4 weeks of clubs, that was 4 weeks of a potential income of £10k plus. This is where we had to place our attention and like they say where you place your attention is where the magic happens.
The first thing we did was evaluate the Easter Holiday Club to see what worked and what didn’t work and then we looked at all the holiday providers across the area to establish what they offered, how they offered it and completely a SWOT analysis. The rationale behind this was so we could define what made them different and what parents were looking for in a holiday club. This would enable us to get our messaging right.
It became apparent that to compete, the business was going to have to move away from a singular activity which is what they currently provided. They would need to provide a variety of activities, which gave a more rounded experience. We also decided to market them as a family run business, so it was a holiday club run by parents creating a home from home experience for the children.
That’s what made them different.
In May we mapped out a marketing plan to take the business right up to the start of their holiday club. This included social media planning, email marketing, community events, school’s events this was to get visibility across the area.
I asked them to go away a plan all the activities out for each week, each day for each age group and theme the programme, so it gave us a clear plan to market. They came back with a fantastic programme.
We then set about marketing the programme, through show casing the weeks, through graphics, images, videos and every opportunity went live to talk about it.
An opportunity appeared in my Facebook news feed that the local council had funding available through Holiday Activities & Food (HAF) for business owners who could provide holiday club provision and we jumped on it!
Straight away the business sent an email off and had a call and started the process of completing the application. After some back and forth between us they had a strong funding application. Remember I told you I use to be a Director of a London Charity that was one of my jobs completing funding applications. Application done and submitted.
We crossed our fingers and toes and waited to see if the application was successful, and they got the news in July that it had been approved and it was all system go to get the message out the families in the area that children who were eligible could attend holiday club for free as their place would be funded.
That was over £6000 of funds secured. The business then turned to selling the remaining places available. They worked their socks off marketing on social media, email marketing, working in partnership and attending community events.
The first week saw over 70 children booked in for the club, the second week saw over 100, the third week they sold out and the fourth week was another sell out.
This coupled with summer contract work they had picked up meant the business was back in profit. All debts had been cleared and they were ready to start their September term in a much better position.
They learnt two very important business lessons during that period. Know your numbers and Market Like A Pop Star if you want to get results. Finance can be seen as the boring part of running a business, but its the most important part and should be checked daily.
I know without my knowledge, know-how, support and accountability that they would have given up in April and the business would have gone to the wall. Their willingness to learn, listen and take on board advice is what got them the results they deserved.
I’ve absolutely loved helping them and I look forward to seeing their business grow in 2023.
If you would like to find out more about how you can work with me through my Market Like A Pop Star Programme to get you and your business the visibility that it deserves then join me for my FREE Market Like A Pop Star 5 Day Challenge in October. Registration opens on Sunday 2nd October.
If you’re looking to make more sales in your business right now, then my Del of a Sell Sales Strategy Course will help you to achieve this. Let me teach you how to implement my sales system into your business. Learn more about the course here.
Next week I’m going to tell you a story about a business owner who has an extensive background in marketing who I taught how to market at a local level. I call this street marketing.