Strategies for “Making Over” Your Business.
I don’t mean to burst any bubbles, but the challenges facing most of the small business owners I know –myself included – are pretty universal when it comes to things like cash flow or managing and growing our companies. Some industries, however, can present business owners with unique sets of challenges.
Winners of the 2018 Business Makeover Contest, Rayburn Farms, Project MQ, and Puna Chocolate, know what I’m talking about. Each company operates in a different industry: agriculture, gaming, and retail, and have their own unique business model with different needs. I had the unique opportunity to work with each of these companies as part of their business makeover win, helping them think through new ideas to improve their technology, marketing and accounting.
Rayburn Farms
Located in the Southern Appalachian Mountains of Western North Carolina, Rayburn Farms grows herbs and spices which they sell primarily to local craft beverage and artisan food makers. Even though their farm is small, owners Michael and Lauren Rayburn still face the kinds of issues larger farms have to deal with – fighting the elements, managing the growth of their crops, and doing the back-breaking, manually intensive work required to seed, plow, pick, and package their final products.
Our advice:
It’s critical for a seasonal business like Rayburn to manage its cash flow, so we recommended implementing a 13-week rolling cash-flow analysis where Michael and Lauren can plan ahead for outlays and prepare for significant upcoming commitments.
But, it can also be a mistake to keep too much cash on-hand so we advised them to invest extra cash in things that could be hugely beneficial in the long-term, like additional employees or purchasing new equipment. They can also explore reasonable working capital financing options – business loans like PayPal Business Loan1 or PayPal Working Capital2 – to supplement their spend and invest in the longer term.
From a marketing standpoint, Rayburn is, at its core, a local company selling to local customers, and that’s really cool. We recommended that Michael and Lauren make every effort to expand their Facebook and Instagram presence, leverage local targeted ads on the social media platforms, while also considering "old school" marketing activities like events and co-promotions with partners in the area.
On the technology side, we thought that Rayburn would get the best return on investment with an inexpensive customer relationship management system like Zoho or Nimble. When implemented properly, this kind of database can keep track of customers, prospects, and suppliers; it can make sure company communications are targeting the right demographics and generally help keep things from falling through the cracks.
ProjectMQ
ProjectMQ is a unique kind of company. The brainchild of owners and gamers Marcus and Malcolm Howard, ProjectMQ’s focus is the gaming industry. Its mission is to help connect independent video game developers around the world with gamers and provide support to that niche.
Our advice:
On finances, ProjectMQ should track and reconcile revenue and expenses on a monthly schedule. ProjectMQ relies on memberships and contributions, so procrastinating can lead to a lot of hardship, when every dollar counts.
As for marketing…the company is small but should be able to grow organically and gain community members inexpensively through the strong social network they’ve built over the last 5 years, and the power of word of mouth from that network.
We were also impressed with ProjectMQ's blog and we advised them to try expanding it as much as possible. We suggested inviting members in the community to post their thoughts, which would help increase engagement and contribute to the site’s search engine optimization. Depending on how many views the company's blog gets, Marcus and Malcolm may even see additional revenue opportunities through things like selling ad space or establishing an affiliate marketing program with other players in the gaming industry.
Last, but not least is the technology piece. Because the business relies on member support, its technology has to be fast and provide a high-level user experience. For ProjectMQ, it’s all about investing in the web. Our recommendations to Marcus emphasized re-investment in web design tools that will keep the site's performance at its highest level and allow it to accept all forms of payment - including services like PayPal - so that community members can make their contributions quickly and easily. It’s hugely important for the company's platform to be equipped with alerts, workflows, and reminders so that any issues can be handled quickly and proactively. We also felt that if Marcus decided to invest in accounting software, he should make sure it can handle subscriptions and allows him to send past-due reminders that offer online payment options, automatically.
Puna Chocolate
A company that grows its own cocoa beans and then makes chocolate? Where do I sign up? That's what Hawaii-based Puna Chocolate does. But being in the chocolate business isn't always as sweet as it sounds. Just ask siblings Adam and Teri Potter and their partner, Ben VanEgtern. Because Puna grows all of its own cacao - from a single source of bean grown in the Puna region on the Big Island – the company deals with the challenges facing a typical farmer, like Rayburn. And don’t forget that it manufactures and sells its own products too. That's a whole lot of other things to worry about.
Our advice:
We started with accounting. After reviewing their accounting process today, I advised they start meeting with their accountants quarterly (at a minimum). They should also explore how changes from the 2017 tax reform legislation could benefit their business. That includes looking into their corporate status (S-corp? C-Corp?) to maximize their accelerated depreciation deductions through the purchase of equipment for the business, and making regular contributions towards their tax-advantaged retirement and healthcare savings accounts.
For faster business growth, we think they should hire a marketing pro. Here’s the reasoning behind it: Puna is selling chocolate all over the world through their website, so their marketing dollars should be going to a competent marketing expert (we suggested looking on LinkedIn, Fiverr, and Guru) who is proficient with both Google AdWords and Facebook advertising. Not only will Puna benefit from this person’s expertise, they’ll have someone able to dedicate the time required to select the right keywords and manage multiple campaigns. Both Google and Facebook provide very powerful tools to help businesses reach their target market, so Puna's owners can focus on specific geographic regions or just people who say they love chocolate! Puna should also consider a presence on a marketplace to tap into a broader audience.
And what can they do on the technology front? Rather than spending on office tech, we recommended investing in technology that will help them farm, pick, and then manufacture their product as quickly and efficiently as possible. The money with this company is in the margin, so the more efficient they can make their manufacturing process, the more money they'll make. Machines that manage tasks like inventory using sensors and other Internet of Things tools are the future of the industry and Puna's owners should be preparing for that. Ultimately, they'll want to invest in a good accounting software that specializes in process manufacturing applications, such as Epicor, Microsoft Dynamics, Netsuite, and Sage.
The takeaway.
Cash flow analysis, social media marketing, blogging, AdWords, CRM…these are things that can help nearly every business grow, not just the Makeover winners. The problem is there's not always enough time in the day to do it all. So work with your lawyer, your accountant, a consultant or even a coach to help you with these very important things. It’s a small investment that could result in a big payoff.
About the author.
Gene Marks, Small Business Expert
Small business keynote speaker and CPA, Gene Marks helps small business owners, executives and managers understand the political, economic and technological trends that will affect their companies so they can make profitable decisions.
Rayburn Farms
Located in the Southern Appalachian Mountains of Western North Carolina, Rayburn Farms grows herbs and spices which they sell primarily to local craft beverage and artisan food makers. Even though their farm is small, owners Michael and Lauren Rayburn still face the kinds of issues larger farms have to deal with – fighting the elements, managing the growth of their crops, and doing the back-breaking, manually intensive work required to seed, plow, pick, and package their final products.
Our advice:
It’s critical for a seasonal business like Rayburn to manage its cash flow, so we recommended implementing a 13-week rolling cash-flow analysis where Michael and Lauren can plan ahead for outlays and prepare for significant upcoming commitments.
But, it can also be a mistake to keep too much cash on-hand so we advised them to invest extra cash in things that could be hugely beneficial in the long-term, like additional employees or purchasing new equipment. They can also explore reasonable working capital financing options – business loans like PayPal Business Loan1 or PayPal Working Capital2 – to supplement their spend and invest in the longer term.From a marketing standpoint, Rayburn is, at its core, a local company selling to local customers, and that’s really cool. We recommended that Michael and Lauren make every effort to expand their Facebook and Instagram presence, leverage local targeted ads on the social media platforms, while also considering "old school" marketing activities like events and co-promotions with partners in the area.
On the technology side, we thought that Rayburn would get the best return on investment with an inexpensive customer relationship management system like Zoho or Nimble. When implemented properly, this kind of database can keep track of customers, prospects, and suppliers; it can make sure company communications are targeting the right demographics and generally help keep things from falling through the cracks.ProjectMQ
ProjectMQ is a unique kind of company. The brainchild of owners and gamers Marcus and Malcolm Howard, ProjectMQ’s focus is the gaming industry. Its mission is to help connect independent video game developers around the world with gamers and provide support to that niche.
Our advice:
On finances, ProjectMQ should track and reconcile revenue and expenses on a monthly schedule. ProjectMQ relies on memberships and contributions, so procrastinating can lead to a lot of hardship, when every dollar counts.
As for marketing…the company is small but should be able to grow organically and gain community members inexpensively through the strong social network they’ve built over the last 5 years, and the power of word of mouth from that network.We were also impressed with ProjectMQ's blog and we advised them to try expanding it as much as possible. We suggested inviting members in the community to post their thoughts, which would help increase engagement and contribute to the site’s search engine optimization. Depending on how many views the company's blog gets, Marcus and Malcolm may even see additional revenue opportunities through things like selling ad space or establishing an affiliate marketing program with other players in the gaming industry.
Last, but not least is the technology piece. Because the business relies on member support, its technology has to be fast and provide a high-level user experience. For ProjectMQ, it’s all about investing in the web. Our recommendations to Marcus emphasized re-investment in web design tools that will keep the site's performance at its highest level and allow it to accept all forms of payment - including services like PayPal - so that community members can make their contributions quickly and easily. It’s hugely important for the company's platform to be equipped with alerts, workflows, and reminders so that any issues can be handled quickly and proactively. We also felt that if Marcus decided to invest in accounting software, he should make sure it can handle subscriptions and allows him to send past-due reminders that offer online payment options, automatically.Puna Chocolate
A company that grows its own cocoa beans and then makes chocolate? Where do I sign up? That's what Hawaii-based Puna Chocolate does. But being in the chocolate business isn't always as sweet as it sounds. Just ask siblings Adam and Teri Potter and their partner, Ben VanEgtern. Because Puna grows all of its own cacao - from a single source of bean grown in the Puna region on the Big Island – the company deals with the challenges facing a typical farmer, like Rayburn. And don’t forget that it manufactures and sells its own products too. That's a whole lot of other things to worry about.
Our advice:
We started with accounting. After reviewing their accounting process today, I advised they start meeting with their accountants quarterly (at a minimum). They should also explore how changes from the 2017 tax reform legislation could benefit their business. That includes looking into their corporate status (S-corp? C-Corp?) to maximize their accelerated depreciation deductions through the purchase of equipment for the business, and making regular contributions towards their tax-advantaged retirement and healthcare savings accounts.
For faster business growth, we think they should hire a marketing pro. Here’s the reasoning behind it: Puna is selling chocolate all over the world through their website, so their marketing dollars should be going to a competent marketing expert (we suggested looking on LinkedIn, Fiverr, and Guru) who is proficient with both Google AdWords and Facebook advertising. Not only will Puna benefit from this person’s expertise, they’ll have someone able to dedicate the time required to select the right keywords and manage multiple campaigns. Both Google and Facebook provide very powerful tools to help businesses reach their target market, so Puna's owners can focus on specific geographic regions or just people who say they love chocolate! Puna should also consider a presence on a marketplace to tap into a broader audience.And what can they do on the technology front? Rather than spending on office tech, we recommended investing in technology that will help them farm, pick, and then manufacture their product as quickly and efficiently as possible. The money with this company is in the margin, so the more efficient they can make their manufacturing process, the more money they'll make. Machines that manage tasks like inventory using sensors and other Internet of Things tools are the future of the industry and Puna's owners should be preparing for that. Ultimately, they'll want to invest in a good accounting software that specializes in process manufacturing applications, such as Epicor, Microsoft Dynamics, Netsuite, and Sage.The takeaway.
Cash flow analysis, social media marketing, blogging, AdWords, CRM…these are things that can help nearly every business grow, not just the Makeover winners. The problem is there's not always enough time in the day to do it all. So work with your lawyer, your accountant, a consultant or even a coach to help you with these very important things. It’s a small investment that could result in a big payoff.
About the author.
Gene Marks, Small Business Expert
Small business keynote speaker and CPA, Gene Marks helps small business owners, executives and managers understand the political, economic and technological trends that will affect their companies so they can make profitable decisions.
2The Lender for PayPal Working Capital is WebBank, Member FDIC. Subject to eligibility and approval. To apply for PayPal Working Capital, your business must have a PayPal Business or Premier account for at least 90 days and process between $15,000 (or for Premier accounts $20,000) and $20 million within those 90 days or within any time period less than or equal to 12 months. PayPal sales include processing on PayPal Express Checkout, PayPal Payments Standard, PayPal Payments Pro, and PayPal Here.
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