The Mad Hatter Chronicles™

How To Start A Business When You're Low On Funds

thomas@minieri.com (Thomas Minieri) — Mon, 31 Jul 2023 23:38:07 GMT

Think You're Too Broke To Start A Business? Think Again

Published in Forbes | July 31, 2023 | Author: Thomas Minieri -- In the first few chapters of my book, I tell the story of how I started my first company in my mid-20s, with only $30 to my name. I was a struggling artist, and after getting fired from my not-so-well-paying job, I found myself being an unemployed, broke artist. I took the plunge into the crazy world of entrepreneurship as an act of sheer desperation. Ten years later, my company had 16 locations in six states and employed about 50 professionals; revenues surpassed $12 million.

Recently, I was at a business conference, and I shared this story with the small group of colleagues sitting at my table. To my surprise, one of the people at my table boldly stated, “Everyone knows you can’t start a business with $30.” Fortunately, my mid-20s self never got that memo, because I did in fact start my company with $30. Here’s how I did it and what other entrepreneurs can learn from my story.

Not only was I out of money when I started my company, but foreclosure proceedings had just begun on my small townhouse because of non-payment on my mortgage. To raise money, I listed all my possessions on eBay, including things that were sentimental to me. Most notable among those items was a rare model train set that my father—who had passed away a few months earlier—had given me. I made $2,000 on that sale and about $500 selling everything else I owned. That money gave me a few months’ budget buffer for food and basic living expenses.

If you feel you do not have any money to start a business, then go through every possession you own—no exceptions—and evaluate if you would rather keep that possession or use it to pursue the lifestyle being a successful entrepreneur can bring you. You may be surprised by just how much money you can scrounge up to get your business off the ground.

To further keep me financially afloat, I got a second job in the morning, as I needed to be available for my business which primarily operated in the evenings. Getting a second job while you build your business can be smart so long as the second job doesn’t hinder your entrepreneurial ambitions. Is juggling two jobs exhausting? Yes, very much so. But I was willing to do whatever it took to get my company off the ground.

Leverage Skills Or Gain Skills

I was in the performing arts industry, but I was also a talented visual artist and had dabbled in graphic design and website design in high school as a hobby. I didn’t realize it at first, but having these skills was invaluable. I was able to leverage my abilities and create a decent website and brand for my company.

As a marketing coach now, I do not recommend do-it-yourself website projects for underfunded entrepreneurs who are inexperienced with website design because a poor first impression can kill any hope of making sales. What I do recommend to broke startup entrepreneurs is investing time into learning the ins and outs of graphic design, website design and sales copywriting. These skills are a must if you want to start a business and can be costly if you pay someone else to do these tasks. I caution anyone against hiring a cheap designer or copywriter; you get what you pay for. Cheap often means low quality, and a low-quality brand tends to yield low sales. If you are not creatively inclined, it may take you time and push you out of your comfort zone to learn these types of skills, but they could prove to be some of the most valuable short- and long-term ones you develop as a modern entrepreneur.

Use Clever Advertising

So how did I spend my $30? It—along with every penny I made for the first six months—went into advertising. People like unexpected surprises. I made a clever certificate that awarded its recipient a free month of my services. “You’ve just been awarded...” is a more enticing proposition than “Call for a free...” All $30 went to printing a giant stack of these awards. My girlfriend—now wife—helped me stuff mailboxes with these awards. We targeted all the wealthy neighborhoods in the area. Within a few days, I got my first customer, then my second and then my third.

While grassroots marketing (passing out flyers or business cards, attending networking meetings, posting on social media, or other low-yield, time-heavy promotional activities) helped me get started, I quickly realized that these were not sustainable methods of promoting my business. Not only did these types of marketing methods consume my time, but they simply didn’t give me the reach I needed to find success. The best I could expect was to pass out maybe 40 to 50 flyers in a day’s time.

The problem with grassroots marketing methods is that they do produce some results, which convinces many new entrepreneurs to keep doing them. But these methods don’t tend to produce constant, consistent and predictable results. Instead, consider implementing a marketing model that automates your prospecting efforts and dramatically improves your reach. The sales copy on my flyer proved effective, which gave me the confidence to push it out to the masses. I stopped stuffing mailboxes (which reached dozens of homes) and leveled up my marketing by putting my flyer in a local magazine (which reached tens of thousands of homes). Clever messaging paired with a broad-reach approach was a winning marketing strategy for me.

Conclusion

If you want to start a business on the cheap, then you’ve got to put everything on the line because you’ll need at least some money for basic living expenses and advertising. Get a handle on your marketing skills and get away from small-scale random acts of marketing that produce little to no results to work toward the fast track to success.

How Much Should You Spend on Marketing?

thomas@minieri.com (Thomas Minieri) — Thu, 13 Apr 2023 23:33:43 GMT

The Entrepreneur's Quick Guide to Advertising Spend

Published in Forbes | April 13, 2022 | Author: Thomas Minieri -- When determining your marketing budget, there are several key factors to consider. Marketing encompasses everything from branding and website development to communications and sales. It is a big header, and each component needs to be well thought out to ensure your entire marketing system is firing on all cylinders.

Branding Overview
Building a brand is not just for large companies. It is the foundation of every business of any size and in any industry. Your brand is your first impression; it is comprised of the visuals that represent your products or services combined with the words used to communicate those products and services. Everything from logo design to sales copy is what makes your brand unique. A successful brand conveys credibility, while an underfunded brand creates doubt. One of my favorite sayings sums up the vibe of branding: How you do anything is how you do everything. Does your brand image tell prospects that you are professional, or does it send the message that you are low budget and disorganized? Branding is about perception.

Branding Spend
Start off with a professionally designed logo, a defined color palette, a selection of unique photos or carefully selected stock images and well-written sales copy. With a focus in marketing on return on investment (ROI), it might be challenging or impossible to track the effectiveness of many branding efforts. I consider branding an investment that makes every other part of your marketing strategy more effective. A poor brand hurts everything while a great brand helps everything. A business owner may spend anywhere from $1,000 to $5,000 for initial startup branding and additional funds for ongoing updates and further development.

Advertising Overview
Any effort that directly promotes your business to prospects can be considered advertising. Options may include running paid ads on social media or search engines, posting on social media, email marketing campaigns, direct mail campaigns, billboards, radio spots, outside salespeople or networking events. Your advertising budget should also include the cost to create any content that will be utilized in the actual advertisements as well as the cost of managing advertising campaigns.

Advertising Spend
My rule of thumb with respect to advertising spend is to have two budgets in mind: one to sustain current revenues and another for robust growth. If you want to maintain current revenue amounts, then 5% to 10% of sales allocated toward advertising may suffice. If you want rapid growth, then you may need to push that number higher, possibly to 20% or more depending on the industry and type of business you operate. A startup business should commit to a fixed number for their advertising spend as their revenue may be too low to utilize a percentage of sales as a gauge. For many small businesses, $1,000 per month is a reasonable minimum advertising spend.

Communications
I call communications "marketing insurance." If you are going to spend money on branding and advertising, then make sure leads are managed properly. The first step to achieving this is to streamline the methods by which prospects can connect with you. Having too many methods (such as telephone, email, chat, texting and messaging) can be overwhelming. I prefer the good old-fashioned telephone. While I also like chat for website communication, I strive to get the prospect on the phone as soon as possible. Personal correspondence with prospects is crucial in many industries.

Communication Spend
The costs for proper communication can vary between industries. Spend what needs to be spent to ensure you are not losing leads due to unresponsiveness. Failure to manage your communication systems properly can be fatal to a business as money is being wasted on advertisements that are not turning into sales. Another aspect of communications and "marketing insurance" is customer service. The last thing you want is for a new customer to ask for a refund due to poor service.

Sales
Sales is under the marketing umbrella as the prospect has not yet purchased. The prospect saw your credible brand promoted in an advertisement, then they visited your website to learn more and now they are ready to make a purchase!

Sales Spend
Like communications, your sales spend will vary between industries. The goal here is to develop professional sales presentations or sales methods that clearly explain in detail the benefits of your offerings in a manner that encourages the prospect to make a purchase. Graphic design slideshows can work well and may help your team stay focused when presenting. Keep them fun and interesting. Videos and other media are also smart investments to improve sales results. If you rely on a sales team, they should be properly dressed, polite, knowledgeable and able to clearly communicate your products or services. Make sure they have the tools they need to succeed.

Customer Acquisition Cost
I tend to summarize marketing spend into one primary data point: customer acquisition cost (CAC). This is the total cost to get one new customer and includes your branding efforts, advertising spend, designer and marketing team salaries, and sales process costs. To find this number, simply add up all the above expenses and divide by the number of customers you acquired in that same timeframe. It makes for good business practice to evaluate your CAC annually and work to get that number lower each year without diminishing your brand. Avoid cutting your marketing budget, rather work to refine your marketing effectiveness. Starving your business of crucial marketing components is never a smart decision.

Conclusion
A well-thought-out marketing plan can make or break a company. It can also separate a company that is stuck in a revenue plateau from one that is soaring to new heights. I took my first company, a service-based studio business, from a small underfunded startup to a bustling national franchise in just six years. My CAC was about $250 per customer in years one and two. As our brand and marketing systems were perfected, I was able to lower that number to $110 per customer. This improved profitability and made my brand attractive to prospective franchisees.

The Positive Effects Of A Modern Brand

thomas@minieri.com (Thomas Minieri) — Wed, 17 Nov 2021 00:28:35 GMT

Not Sure If You Should Change Up Your Brand? These Tips Will Help

Published in Forbes | November 16, 2021 | Author: Thomas Minieri -- I was flat broke when I started my first company. I ran out of money after being unemployed and under-employed for over a year. My credit cards were maxed, and I didn't know anyone who could loan me money to help me get started. I was at the end. I used my last $30 in a last-ditch effort to find something that would work, hoping that my new business venture would be that thing. I was an artist but had never dabbled in graphic design. I came up with a simple, yet catchy, black-and-white flyer and made as many copies of that flyer that $30 could afford me. On the bottom of that flyer was my logo. It was basic, simple yet interesting, made with love and desperation.

Fast-forward three years and my company was booming. I was in my own retail space, had cultivated a team of employees and was about to open my second location. One key to my success, even at this early stage, was my constant commitment to marketing and advertising. For me, advertising was always the first bill to be paid, not the last. Paying for advertisements this month ensured that my phone rang with new customers next month. My company grew, as did my skill as a marketer. I soon realized that ad quality mattered just as much as ad frequency. It was time to update my brand and improve my company image.

To me, branding equates to credibility. My established competitors and my franchise competitors had polished, professional brands. Their logos were trendy, modern and well-known. I was an up-and-coming nobody who posed no threat to anyone, and my homemade brand only reinforced that reality. But that was about to change. I called around for a professional designer to help me articulate my ideas. I found a guy. We hit it off, and I hired him to help me design and implement a real brand.

While I was very attached to my original logo, I was more attached to the money that my new brand would bring in for me. I put my emotions aside and got to work on creating something new with my designer colleague. A few weeks later, my company launched its new brand image complete with professional logo design, brand elements, a matching website and marketing collateral. It was a real brand for a real company, and it made a real difference. My second location opened with our new logo on the front door. My new brand was a success from day one. Advertisements became more effective. Utilizing more professional branding in our sales presentations awarded my team with increased sales conversions. The public, as well as my competitors, began to notice and recognize my company. We were gaining momentum.

Fast-forward another two years, and my company was producing seven-figure revenues and I had a team of over twenty professionals working for me. I had developed our own software application and operated a full-time call center to field incoming inquiries from prospects. My brand was well-established as a leader in the industry. I was operating two very successful stores and had established a unique business model and system. It was at that time that I decided to franchise my brand and expand nationwide. Unfortunately, for my company name, it would not be able to come along for that journey. My business name included the word "Carolina" in it. Obviously, franchisees outside of the Carolinas would not find my business name beneficial. Thus, if I were to franchise, I would have to rename my entire company.

Fast-forward four years and my franchise system had over a dozen locations across six states. The new business name was a huge success and ushered in higher levels of company culture and brand awareness. It was a home run.

In just a few years my brand evolved from the original logo I made on the cheap to a professional logo and brand that became well-known in my industry to a complete name change and brand overhaul created for my franchise system. Every time I reinvented my company's brand image, it turned out to be a positive change. It stirred things up a bit. It made things fresh and new. It made people take notice, curious as to what was up with my company. Never once did a customer come to me with disdain for my decision to change the logo, the brand colors or even the name of the entire company when I franchised. I invested hundreds of thousands of dollars in advertising along the way and never once did I notice any loss of brand exposure with any of the revisions. It was never a back step.

I've since sold my franchise system and the assets it accumulated. Today, I operate a marketing and creative agency. I combine a decade of real-world entrepreneurship with my now finetuned creative and design skills. I meet with business owners daily who are cautious to merely update their dated logo. If that's you and you're hesitant to change your brand or are nervous as to what a revision to your brand might do to the investment you've already made in brand recognition, then perhaps this narrative will provide some perspective. I made many changes to my brand, and everyone was massively positive. Simply put, people notice the new and forget the old much quicker than we emotionally attached entrepreneurs would like to believe.

Is your logo more than five years old? Is it more than ten years old? Google changes its logo almost every day, and people aren't forgetting where to search for things online. Is your business name dated and holding you back from gaining new opportunities? If so, make like Elsa and let it go. Change doesn't mean you forget the hard work you put in during your startup years. Come up with something fresh and new that will take your company to the new heights it deserves.

Sales Tips For Success

thomas@minieri.com (Thomas Minieri) — Wed, 02 Jun 2021 21:02:11 GMT

5 Helpful Strategies to Close The Deal

Published in Forbes | June 2, 2021 | Author: Thomas Minieri -- Part of achieving success in business is establishing an effective marketing strategy for your company. Marketing is a broad term and includes not only the advertisements used to get leads, but also the sales strategy that turns those leads into action by a customer that results in revenue for the business.

There have been several instances when my agency has generated leads for a client only to have that client struggle to turn those leads into revenue. This is often indicative of a sales problem, not an advertising problem. Sales is largely based on communication and perception. Here are some of my top tips for improving your sales skills, which should help you land more and better deals.

INITIAL CONTACT

I find that limiting the methods through which customers can communicate with a business can help in the sales process. Having too many ways for customers to contact you can lead to internal confusion, overlooked messages and missed opportunities. Email can be slow, and the back-and-forth can become tedious and unproductive. Instant messaging is decent, as is texting. My favorite method to communicate with prospects is still the telephone. It allows the prospect to immediately connect with an actual person.

If the person answering the telephone is well-trained and follows a well-thought-out script, they should be able to funnel most calls to the next step of the sales process. An initial phone call with a prospect should include a welcoming introduction, confirmation that the prospect made a good decision by calling the business and a basic overview of expectations.

IN-PERSON CONNECTION

While many businesses are striving for automation and remote interaction, there is something to be said for in-person human connection. Some industries, like e-commerce and tech, can get away with limited or no human contact. Other industries, like many service businesses, are dependent on a personal touch.

People connect with other people and with human faces, not with computer screens. People also buy from people they like. Avoid being swayed by strategies used in other industries or even by your competitors. Going more personal when everyone else is going more impersonal may give you a unique edge that helps you stand out in the crowd and land more sales.

REPRESENTATION

In an age when individuality is the trend, it may be advantageous to be different and focus on uniformity and theme. Incorporating things like dress codes and sales scripts convey professionalism and consistency and can give your prospects confidence that they can trust you and that you are organized enough to deliver as expected. Remember, how you do anything is how you do everything.

Whether you're making your first impression on a prospect, or it's your time to present to a client, your physical appearance and demeanor can play an important and often overlooked role. Do you want your prospect's first few impressions of you to be casual and carefree, or uniform and professional? Personal preferences should take a back seat to prospect perception. If you do not convey the right message, you could lose the opportunity.

If you manage a sales team, you may find that they welcome formality and uniformity as it lets them know they are part of a team and a brand as opposed to being lone wolves. It can help them with confidence in sales situations.

PRESENTATION

Many businesses lack any form of presentation for their products or services. In many industries, potential customers do not know they need to do business with you. They may not even know that your industry exists or is something they need. Communication and education are crucial in the sales process. Therefore, it is essential to formulate a proper sales presentation to ensure that prospects understand what it is you offer and how it will help make their lives better.

A sales presentation can be verbally communicated by a salesperson or can be in the form of visuals, slideshows, before-and-after portfolios or short videos. Presentations should always be focused on how your products or services improve the lives of your prospects and how easy it is for them to gain these benefits.

ASKING PROSPECT TO ASK

Once you have connected with your prospect in a personal manner, represented your brand well, and presented your offerings and benefits clearly, it is time for your prospect to act. The trick to getting a prospect to make a transaction is to ask them to do so. The simple act of asking can make all the difference and is all too often overlooked by salespeople. Nerves, doubt and the desire to be liked can creep into the subconscious mind of even the best salespeople from time to time. If you genuinely believe that your product or service will better your prospect’s life, asking them for business can be a beneficial thing to do for them.

When asking a prospect to act, phrasing is key. Be careful not to use the word “or." The common scenario goes like this: “Would you like to schedule a meeting with me tomorrow or ... ?” Here, the salesperson subconsciously leaves the sentence hanging and gives the prospect a way out. If what you are selling will benefit them, there should be no reason to give them a way out of the sale.

Another scenario may go like this: “Would you like to schedule a meeting with me?” In this scenario, the salesperson is offering a “yes” option and a “no” option, leaving the door open for the prospect to decline. Instead, offer two options of "yes," such as: “I am available to meet with you Wednesday at 1 p.m. or Friday at 11 a.m. Which one would you prefer?” This option conveys confidence and control.

CONCLUSION

While these sales tips are geared toward making in-person connections, they can easily be applied to businesses that need to be more automated. Success in sales takes practice and focus. Hopefully, these tips steer you down a path of improved sales and increased prosperity.

Smart Spending: How To Be A Frugal Business Owner Without Being Cheap

thomas@minieri.com (Thomas Minieri) — Tue, 08 Sep 2020 20:22:49 GMT

Are You Financially Strangling Your Business? 7 Tips to Set You Straight

Published in Forbes | September 8, 2020 | Author: Thomas Minieri -- My experience working with franchisees and small business owners has given me a unique vantage point when dealing with common problems that ail many entrepreneurs. A very common trait I’ve noticed in small business owners is their struggle discerning the difference between smart financial decisions and blanket cost-cutting.

While cutting costs may be beneficial, it can also be fatal if done without careful consideration of outcomes. Companies do not grow by cutting costs; they grow by increasing sales. Therefore, if the owner, in an attempt to lower expenses, deprives essential business systems of needed capital, then it could lead to stagnant growth or negative cash flow. It’s important to consider the unintended consequences of not spending money on important business systems. Many business owners may think they are being frugal when in reality they are being cheap. Frugality leads to efficiency, while being cheap leads to a whole host of problems.

GO BEYOND THE ESSENTIALS

Only spending money on things that are essential will make your company bland and indistinguishable from competitors. For discussion purposes, consider a restaurant business bathroom. Can the owner get away with white walls, a standard sink and a standard toilet? Sure. While extra nice fixtures in the bathroom may seem frivolous to some, many customers will be positively impacted by a high-quality bathroom experience. It may make a lasting impression and send the message that the business exudes quality and has a unique personality. Just because something isn’t absolutely needed doesn’t mean you shouldn’t invest in it. Your company’s image is worth the money!

MARKET & PROMOTE

In my experience, small business owners all too often don’t spend enough money on proper marketing and advertising. My personal rule of thumb is to spend 5 to 8% of your goal gross revenue. This means that if you want a company that generates half a million dollars in sales, then you should start spending $25,000 to $40,000 in advertising now.

Once fueled with proper marketing spend, your company should be on its way to achieving your goal. Avoid spending based on where your company is today; instead, spend based on where you want your company to be tomorrow. If this formula is legitimately not possible for your business, then take it in stride. The idea here is that the common 5% to 8% of revenue philosophy may be too low for actual growth, especially if you are a startup with low revenues or a business in a highly competitive industry. Alternatively, consider two marketing spend percentages: one that sustains your current gross revenue and another that promotes growth.

NEVER NEGLECT INSURANCE

Smart business owners use insurance as a hedge against losses. In my experience, many business owners get hit with life circumstances they did not foresee. A simple umbrella plan or policy that pays you cash if you can’t work due to injury or illness can make all the difference when faced with the unexpected.

It’s not frugal to ignore insurance; it’s cheap. And it may cost you everything. If you don’t have adequate insurance, get it today. It’s simply not worth the risk.

WHEN IT COMES TO MARKETING, COVER YOUR BASES

Make sure that your customer service and sales teams have every tool they need for success. This is what I call marketing insurance. The idea is to take every action possible to ensure that your marketing dollars (the 5% to 8% of goal gross revenue mentioned above) actually turn into sales.

It’s bad business to spend money on marketing only to ignore things like training your receptionist who answers the phone or buying tools and materials for your sales team who closes deals with customers. It’s almost always money well spent when it comes to communications systems with customers, sales presentations for product clarity and modern equipment for your workers. In short, if you’re going to spend money to get the phone to ring, make sure there are no broken links in your sales process chain.

NOT EVERYTHING CAN BE DIY

In general, I believe too many people are overconfident when it comes to projects that should be handled by professionals. The desire to save money and “do it yourself” often comes with unintended consequences.

Unfortunately, in business, many of those unintended consequences are not easily identifiable. For example, the business owner who decides to save money by building their own website may never realize that their company is suffering due to their desire to save a few thousand dollars. Branding and marketing DIY projects often backfire because they tend to yield low company credibility.

Construction and repair projects can also prove costly if not handled by professionals. I once had a new franchisee who asked me about a plumbing issue. I told them not to mess with plumbing or electrical despite the temptation to save money. They ignored my advice, and like clockwork, I received a desperate phone call when this franchisee’s brand-new facility flooded with water. My advice the second time around? Shut the water main, and call a plumber!

While some DIY flops can create those “we’ll look back at this someday and laugh” moments, many can seriously stifle company growth due to lack of awareness. The smart business owner knows their strengths and hires professionals to fill in the many gaps.

LEARN FROM THOSE WHO CAME BEFORE YOU

The cheap business owner avoids spending money when they can and should. Being frugal in business means you look past the short-term solution and consider the big-picture consequences with respect to time and money.

If you think about how spending or saving a small amount of money today will impact you tomorrow, then you are well on your way to becoming a savvy entrepreneur. The last tip in this article is to remember to seek the advice and guidance of those who have gone before you. Education and training, especially from successful entrepreneurs, is always a smart investment choice, and one that may not only save you money, but help you grow and scale to your heart’s content.

How to Survive and Thrive in a Down Economy

thomas@minieri.com (Thomas Minieri) — Wed, 22 Apr 2020 20:06:50 GMT

Published in Forbes | April 22, 2020 | Author: Thomas Minieri — When economies fall apart—and this happens more than you might think—many business owners find themselves in a position of desperation. As business owners, many of us are all in, meaning our livelihoods and the ability to provide for our families rests upon the success of our businesses. When circumstances around us change that are outside of our control, stress, fear and anxiety can build quickly.

During the last major economic crash in 2008, I was a new business owner with a company that was only about two years old. To make matters worse, I sold luxury services, which, at the time, were at the bottom of people’s lists of things to buy. I was faced with the decision to call it quits or fight for my company and make it work despite the economic situation we faced.

I made the decision to fight for my company and innovate to accommodate the new economic environment. The strategies I learned at that time proved most valuable because my company not only survived the downturn, but grew tremendously. This catapulted my career as an entrepreneur for many years thereafter.

FOCUS ON THE POSITIVES

Value is often found in going against the flow. That means having a positive outlook even when things seem bleak. It’s not that you should ignore reality; rather, approach circumstances with a positive attitude. For example, if unemployment is at 20%, focus on the 80% of people who have jobs and money to spend. Find or adjust products and services to target those people.

ADJUST YOUR RATES

If you need money, raise your rates. During the 2008 downturn, I adjusted our services from an $89 one-hour session to a $75 forty-minute session, which raised our per-minute rate. However, the cost of a session from a customer’s viewpoint dropped. This clever adjustment gave the perception to customers that we had lowered rates, but in reality, our rates had increased. The lower perceived cost of services undercut our competitors and allowed our luxury services to be available to a larger audience. Additionally, the shorter session time allowed us to handle more sessions per day, which further increased revenue and improved efficiency. Our customers didn’t mind paying less for a session with the trade-off being that it was 15 minutes shorter, and our die-hard customers just bought more sessions. Whatever your industry, be creative and find ways to adjust rates (not lower rates). Consider offering additional value without giving things away for free or at a discount.

REMEMBER, BRANDING EQUALS CREDIBILITY

There is a fair amount of evidence indicating that branding is one of the top reasons people choose a company. Many people choose a familiar brand, even if that brand has shortcomings, over a less familiar brand that may offer better quality. It’s human nature to go with a sure bet. Given this concept, I believe it is crucial for businesses to spend a good amount of energy on branding. A solid brand gives your company an impactful first impression with new prospects. In a slow economy, people are more cautious with their spending and their choices, so make sure your brand comes across as highly credible. Improve and update your logo and branding elements, as well as the fonts, themes and color palettes that represent your company. Build attractive sales presentations and establish clear marketing messages that convey your offerings in three seconds or less. It’s about credibility.

DOUBLE YOUR MARKETING BUDGET

In a down economy, most business owners look for ways to cut expenses. Cutting some expenses may be helpful; cutting others may be fatal. In my experience, cutting marketing is almost always fatal. In the economic downturn of 2008, I doubled my marketing budget while most of my competitors cut their marketing budgets or eliminated them entirely. It was very tight financially for us to do this, but it paid off because the marketing landscape was much less busy. Fewer competitors gave me a higher ROI on my advertising dollars. Consider finding new methods of advertising as well. Economic changes often bring changes in societal behavior. Things that once worked may not work as well anymore; things that haven’t worked may be good ideas now.

DO MORE TO SURVIVE

In 2008, a colleague of mine gave me some great business advice. His company operated large-scale entertainment events, and he experienced a sudden drop in attendance. To survive the downturn, he had to add 20% more events to his calendar just to make the same amount of money he was making in a strong economy. While he had to work harder to make the same amount of money, it was only for a season, and his business survived the downturn as a result. Once the economy got back on track, his business boomed due to his expansion. Sometimes expansion is for growth; sometimes expansion is for survival. Either way, you’re growing and not shrinking.

GET LOANS FOR EXPANSION

In a down economy, the government often lowers interest rates on loans to encourage business expansion. The government also earmarks money specifically to aid small businesses. Take advantage of this as an amazing opportunity to get cheaper money to grow your business. In a strong economy, interest rates are often so high that it is extremely expensive for businesses to finance anything.

In the last down economy, I was able to get an SBA loan to purchase real estate for expansion. This opportunity allowed us to purchase discounted real estate in a down market with a low interest rate. By the time the economy recovered, we owned several commercial properties and no longer needed to pay landlords rent. Plus, our mortgage payments were far lower than rent and did not go up annually as is the case with most leases.

Whatever storm you are facing will pass. Hopefully, these tips will help you discover your own creative solutions that will allow you to survive and thrive.

Is Franchising Right For Your Business?

thomas@minieri.com (Thomas Minieri) — Tue, 18 Feb 2020 21:29:33 GMT

5 Benefits of Franchising Your Business

Published in Forbes | February 18, 2020 | Author: Thomas Minieri -- If you’ve thought about scaling your business, you might have wondered whether or not franchising is the right choice. For me, transitioning from a small business owner to a franchisor helped me grow my business and scale much faster than I would have been able to do on my own—all while avoiding the excessive risk of a capital-intensive expansion.

Small business owners too often make the mistake of wanting to do everything themselves, including scale. If you’re ready to take your company to new heights, then consider some of these noteworthy benefits that I found during my experience as a franchisor.

FUNDING FOR EXPANSION

It can be costly to take your business to new markets or to expand with additional locations. One of the most appealing aspects of franchising is the ability to quickly scale by funding your expansion while avoiding taking on excessive risk, raising outside capital and increasing your overhead.

With a franchise model, the franchisee typically purchases a geographical territory where they’ll operate the brand. They are often responsible for much of the startup cost associated with opening that new location, including the build-out, marketing and funding of the location until its breakeven point is reached. For this reason, franchising your business may be a smart choice if you want to expand.

BETTER CUSTOMER EXPERIENCE

Another valuable reason to consider franchising is to maintain high customer service as the business grows. It’s no secret in business that quality tends to decline as a company expands. If customer service is a big part of your business, then franchising may help ensure it stays up to par.

With franchising, each additional location has a franchisee/owner with a genuine interest in preserving the reputation of that location because, while it’s the franchisor’s brand, that location is the franchisee’s business. You’re placing your trust in the hands of someone else, and it makes a difference when that person has invested money just like you have.

A franchisee has their money on the line and will typically be more invested in the customer’s experience and overall success of their location than a store manager who is an employee of a larger corporation. Better customer service overall and a group of people working together with a vested interest in the brand is a win for the franchisor and franchisee alike.

VOLUME DISCOUNTS

Volume discounts are usually out of reach for businesses with only one location, but they are easy to attain with a franchise model. Utilizing a single distributor for all of your franchises often opens the door for volume discounts while streamlining your company’s distribution.

The perks of instant volume discounts are appealing to prospective franchisees because they can be enjoyed even before developing their customer base — something that would be out of reach for a single small business.

MARKETING BENEFITS

Marketing is essential for a business’s success, especially when trying to get it off the ground. For small business owners, marketing can sometimes get lost in the chaos of everything, leading to a lack of brand awareness in their community. With a franchising model, franchisees enjoy the benefits of having a bigger marketing machine behind them, while the franchisor ensures their brand is being promoted consistently and uniformly in every market in which locations exist.

TECHNOLOGY

Franchising can open the possibilities of what’s feasible for your company in terms of technology as well. For a business with just one location, it would likely be cost-prohibitive to create customized software for booking, training or customer loyalty. However, a customized software solution becomes more cost-effective as the number of businesses that will be using it rises.

When I began to franchise my business, I consolidated all of our appointment bookings and customer service management into one call center to facilitate all phone and internet traffic for every location. We required our franchisees to utilize this call center and pay us fees to cover the expenses needed to run it.

Our call center was a huge success for our company because it eliminated the need to hire and manage a receptionist at each location, improved communications and sales with customers, and freed up our franchisees’ time to focus on other aspects of their businesses. It was a win-win arrangement and an example of capitalizing on the benefits of the franchise model.

Having a customized software solution for your franchised business can make it easier for all franchises to operate uniformly, improve the overall customer experience, make reporting more accurate and give your brand a competitive edge.

Franchise models can provide many benefits for franchisors and franchisees alike. Franchisors can enjoy scaling their business without sacrificing quality or raising outside funds, while franchisees benefit from entering an already proven business model with in-place resources behind it. It’s no small feat to build a successful business, and franchising may be the ideal way for you to get the most out of your company.

Fatal Startup Pitfalls: Do's And Don'ts To Avoid Them

thomas@minieri.com (Thomas Minieri) — Mon, 23 Sep 2019 20:16:08 GMT

For Entrepreneurs: 5 Ways to Prosper Without Peril

Published in Forbes | September 23, 2019 | Author: Thomas Minieri -- Many people start their first business starry-eyed and with high hopes of success, only to be rattled when things get tough or don't go as expected. My experiences as a successful small-business-owner-turned-franchisor have allowed me the opportunity to not only learn from my own business experiences but also to learn from our franchisees' experiences.

Business, especially new business, can be tricky. One major advantage of purchasing a franchise is that franchise systems are typically set up to help new franchisees avoid as many problems as possible. If you are starting a new business without the benefit of a franchise system, you are going to need to spend a good bit of time planning and seeking guidance from others in your industry who have experienced and overcome challenges. Doing so before you launch will help you avoid unnecessary issues later.

Franchise or not, these common pitfalls plague many new business owners. Below are my top five dangerous startup pitfalls that, with some insight and planning, can be avoided.

DON'T UNDER-FUND STARTUP MARKETING

In my experience, many franchisors require their franchisees to spend a certain amount of money on initial grand opening marketing and advertising because they know how crucial proper marketing can be early in the life of a new business. Many small business owners who are not part of a franchise system dramatically under-fund initial marketing efforts.

If handled properly, marketing should produce a positive return on investment (ROI) in a short amount of time. A well-designed and managed marketing campaign and sales system is like a well-oiled machine: You put $500 of marketing in one end and $750 in sales comes out the other end. With that knowledge, why wouldn’t a new business owner spend everything they could on marketing and sales?

The answer is all too often based in fear. Most small business owners don’t believe marketing will produce ROI or they don’t know how to build a marketing system that will produce ROI. They are fearful of losing money so they take no action, which can have devastating consequences. Don’t let this fear hold you back. Before you go into business, make sure your marketing, advertising and sales processes are well-thought-out and that you have a proper plan and budget in place.

DON'T UNDER-FUND ONGOING MARKETING

Franchisors often mandate ongoing marketing spend requirements for their franchisees because they know how important it is to keep leads and prospective customers coming into the business‘s pipeline. Funding a properly built marketing system is akin to keeping your car filled with fuel. Cutting the marketing budget for even one month can negatively affect revenue and cause a shortfall in the proceeding month‘s budget due to lower sales. This, in turn, leads to that month’s marketing getting cut and continued lower sales. Thus, a downward spiral begins.

It can be challenging or impossible to recover from a downward spiral caused by marketing cuts. So, avoid cutting marketing in the first place. Instead, find other ways to lower expenses in a startup environment or if you find yourself in a slow sales season.

DON'T BE ABOVE THE RULES

When you’re just getting started, it’s crucial to set and adhere to policies and procedures. Business hours should be maintained without deviation, even on slow days or weekends. Customer service processes and sales scripts should be followed without alteration or shortcuts. If you’re the only employee in your new organization, it is even more important to resist breaking the rules — you’ll find that trends and habits form quickly. Remember, the easiest time to set a company‘s policies and procedures is when the team is small.

So, take time in your organization’s early months to figure out your processes and then stick to them without fail. As the owner, you should be the living representation of your company’s culture business systems, not the person who is above the rules. If you show you’re willing to break procedure, employees will follow your lead as the business grows.

DO PROPERLY EVALUATE SYSTEMS

Problems are going to happen -- it's inevitable. I’ve seen that it’s common for newer business owners to misdiagnosis problems in their organizations. If business is slow, for example, it‘s a common diagnosis to blame the company’s marketing systems. However, the answer is rarely that simple. Even small mom-and-pop businesses are complex and comprised of multiple systems that work together.

Every owner should understand and track their company’s process chain: the system of systems that leads to a sale. If business is slow, evaluate the entire process chain to flesh out the problem. Is the marketing strategy producing leads? If so, is the telephone being answered properly? What about the sales team? If they are burning through leads, then the organization may need to restructure its sales systems or provide better sales training.

In this scenario, salespeople may be tempted to blame the marketing team by saying they are getting bad leads. Maybe that’s true, maybe it’s just an excuse. Either way, if sales are low, the key to getting things back on track is a proper evaluation of your entire business, its people and its systems with the goal of pinpointing the exact problem or problems.

DO PREPARE IN TIMES OF PLENTY

It’s human nature to think that the good times will last forever. In my experience, people work harder when things are going poorly and tend to coast when things are going well. However, circumstances that are outside of your control can alter your world in an instant. The economy can change, your industry can change, a new competitor can move into your territory, or technology can advance quickly, leaving you falling behind.

If business is good, then push to gain more market share and work to set your company on firmer footing. Invest in better marketing systems, technology, more qualified staff or improved benefits for customers. When hard times come (and they always do), you’ll be better prepared to see it through.