There’s a lot of people who don’t know what we were involved in prior to sponsorship advice .org, so I wanted to talk about the major elements we used to do, from a business point of view and also more … Continue reading
It’s been a while since I posted to the Sponsorship advice blog. There are a number of reasons for this but it boils down to only 3.
1.) I’ve had a Baby
As i think most people know when you have a kid it is a very tiring experience (to say the least) so this means I haven’t been able to post to the site. I haven’t wanted to talk about topics that are irrelevant to the site. I also didn’t want to mention anything that wasn’t related to business. But the other 2 reasons I’ve been away are actually 100% business, so I’m going to talk about them now and get going on this.
2.) I’ve Started A New Business
It’s not really a new business but I’m added to the business Ecoflor, this is a UK based creator of flooring solutions. Essentially it’s a great place where I can bring my marketing knowledge and get some good results for the businesses I’m working in, instead of just being a marketing consultant for a big company. It’s a win win here as I get to help an old friend and he also doesn’t have to pay a lot of money for a corporate approach. The other side of it is that I get to earn more money too, as I know what really helps these businesses, and that’s smart marketing then scaled. It’s something I am all about and as a result I believe its a win win.
3.) My Sister Got Married
Again not really business based but something that has been taking up a lot of time over the past few months.
Needless to say I will be back more officially now.
OK, this starts with a story. In 2016 we were robbed. Most of our technical equipment was stolen and we ended up losing £20,000 worth of stock. tech and other items. It was an incredibly stressful and trying experience for me personally but also on the business. As we didn’t have 20k to reinvest into the company. This as a result made everything slow down with the business and hence the business ended up recovering for about 6 months, hence progress that we had made in the 18 months before was lost. Not a good few months at all.
Instead of just complaining about it I wanted to write about how we reacted and what we did to prevent this in the future. Theft is such a huge issue for businesses but its something that no one really talks about. For example if you had 50% of your stock stolen, or even just damaged how would you react? Would you be OK, would the business go under? What would happen.
Also another aspect to remember is that your employees might not be who you think they are. This was our issue. The individual who stole our equipment was eventually caught and it turned out he was a very close friend of one of our employees, who he had used to access the building, but the issue is we only had keys and cameras, hence we had no way to know who it was (hoods were used when burglary was taking place). But we changed a number of things to prevent this happening ever again.
We took a number of steps to ensure this never happened again. The first step was to improve the locks on all the doors. Previously we had only single block locks. These can be easily kicked through by anyone who wants to break into a premise. Instead we had triple D-locks on all doors, this meant that our weak points were now our strong points as these are very difficult to get through, even with a metal bumper.
The next step was knowing who was entering the business at any time. As we run a 18 hour business there are different people who lock up and open up in the morning. We wanted to know who was who, as a result we contacted a security company called Nortech Control and asked them what they recommended. Their response was to go with something like a door access system, this way we could see which individuals came in and out of the business without having to monitor cameras.
This was very important for the future, this means that now if we are triggered that an individual is trying to enter the business with an employees card, we can simply call the employee and ask for a reason why they are trying to get in, and if they are in fact trying to.
If they state they are not and they have lost their card then we can manually block entry and then obviously call the police. A very effective, robust system for anyone who doesn’t want this to happen to them. There are also upgraded options for larger businesses and even bio-metric options too, but personally this would have been overkill for us.
Today I’m going to talk about a meeting I had with a very successful individual called Alan. He’s a millionaire who owns a rental company but not your average one… He rents supercars to individuals all over the world. As you can imagine this requires a lot of management of capital, insurance and cash flow, as a few mistakes and some bad luck and your business could go under, and one thing that you can’t have is selling supercars back to the supplier at 50% cost price you paid! That’s a quick way to a broken bank balance! Instead he talked about the most important element being cash flow.
If you don’t know cash flow is the actual monetary funds you receive into your business on a regular basis. For example you may have £10,000 costs per month, meaning you will need to have 10,000 of cash into your business each month to break even. But there is something so much more important when it comes to cash flow, and that is to ensure you have enough to not only break even but also to make sure your business keeps moving forward, for example marking your business to individuals will cost money (as does advertising) and if you don’t have a marketing budget then your business will slowly but surely bleed money.
Re-investment – But don’t over-spend on your business. Getting the right amount of re-investment is the key to business growth and stability. For example if you don’t have enough to invest into a business the sales will decrease, this is simply due to marketing and advertising costs (amongst other elements.) But if you invest too much into the business at once, then when unforeseeable events occur, you will not have the personal funds to utilise for them. This is one of the most important mixes for a business and one that is incredibly difficult to get around.
In conclusion it is extremely important to not only track cash flow, but to also make sure you have enough at certain periods of time to make sure you can survive any unforeseen issues. For example you may think it is better to get a lower unit cost from a supplier but then if you have no money to actually use in the marketing of the units themselves then the unit cost decrease is going to mean nothing as you won’t sell many!
Most business owners run by the following motto. “I will grow my business, and my team can maintain what we already have in place.” You see this in small businesses, medium sized and even multi national corporations. Personally I used to agree with this motto too. But nowadays I run by a different model and its not for everyone but I can assure you that its help me personally grow to a $100,000 per month business. And its this:
Hire the best individuals for the specific task.
Whether this be design, sales, accounting, marketing, building – Whatever. Just hire the best individuals and the knock on effect you will have is so positive, even if the cost seems expensive at the time! Below is a good infographic which talks about the basics of outsourcing.
Today though I’m going to talk about how to outsource growth, mainly in adding your specific services or products to new distribution channels. Namely the 2 giants of Ebay and Amazon. I don’t need to tell you how many sales these 2 companies make, but you probably have no idea of the sheer scale they make their sales. They make 10s of thousands of sales every single hour. That’s some crazy number! And if you set-up your business correctly, you can have a chunk of this action without doing any of the leg work or taking up any of your team’s time.
I’m of course talking about outsourcing the optimisation, listing, set-up, ranking and review process. Personally in our business we used an Amazon marketing agency based in the UK. But they run services for all types of Amazon and we broke down how much time and money they actually saved us. For our 3 products we had the full gold campaign, which set us back roughly $12,000. Seems like a lot to the average business owner. But in 6 months these were the stats:
- Time spent by our team on Amazon Seller Central: 30 mins.
- Time spent by our team packing orders: 20 mins.
- Time spent by our team on customer service: 0 mins.
- Investment after the $12,000: Approximately $400 per month on PPC/Sponsored ads.
- Earnings PER MONTH after the 6 month set-up and optimisation period: $45,000 in sales…..
YOU HAVE TO OUTSOURCE!
Get people who are better than you or your team at doing specific jobs and the knock on effect or ROI will lead to these having not only more time but also a lot more money in the long run!
Continuing on from our recent trend of tech improvements in business and marketing, today I’m going to talk about how tech advances can help businesses even in simple and somewhat generic import and export businesses. These are some of the most profitable (and boring) types of businesses in the world. In the UK I think I’ve probably meet close to 200 business owners over the past couple of years. And the number of individuals who were running some-what related import/export businesses was close to half! That’s how profitable this niche or tactic is. That’s also how generic it is.
But with that said, there have been a number of advancements to make this business model so much cleaner and more efficient. Not least the fact that these businesses can now order 1000 units and have them with their warehouse or company within a few DAYS! Let alone a few months. The reason behind this is obviously faster travel and shipping, but the knock-on effect from a cash flow and business point of view is huge!
Today I’m going to talk about someone I meet in these business events (an even in central London about marketing) who had a very simple, yet extremely profitable garage shelving business. This is what he outlined as the causes to his main issues and how he resolved them! Love this guys attitude to not only business but life. If you’re reading this, you are a solid guy!
Our main issue at the start of the business was obviously capital. I think this is the same for pretty much every start-up in existence unless you have some healthy investments. But luckily from selling an old business and having some savings we were able to get around this. Next was again what I think is a problem with most import/export companies and that’s the shipping or delivery. This is what really can either make or break your business and more specifically how much you have to go on to sell your items for.
As a result we looked into the new technology being used in shipping, things that would make ships either faster, safer or generally more efficient. We now use only 1 shipping company that has all of these things. Funnily I don’t actually reveal them as I don’t want my competition to find out who we use! They are slightly more expensive than your generic shippers but they arrive quicker and I’ve yet to even have a single minor issue with them. Businesses that run smoothly make money, ones that always have issues with systems or efficiency will lose money, its that simple.
Even coffee shops are getting in on the simple import export process. There is one in Cardiff that boosts they make MORE through their import export business than they do in the local store front. That’s a huge claim and if true would mean simple import export businesses are now directly effecting storefront businesses positively!
Continuing on our technology trend that we have started over the past couple of months, I wanted to write a post on a topic close to my heart, that is supercars! I’m a big lover on automotive tech advancements and when this is mix with great business practices and good marketing I think this makes car companies some of the most profitable in the world. For example the range rover is a car/brand that I love for 3 reasons. 1.) The car is a good piece of kit, 0-60 in about 5 seconds for a car this size is extremely impressive. 2.) It’s steady and very safe. 3.) The marketing on this company is some of the best in the world. For example check out this viral marketing video by the Range rover team.
Not a bad marketing stunt – The idea behind it was that the individual who has this car is rich enough to have multiple women… Essentially without getting to graphic. The line people draw in their head is that if someone were to own this car they would be able to get multiple women. The amazon thing about this campaign is other people did the work for them. All they did was park in a busy London street and social media took care of the rest! With a trending hashtag meaning they got in front of millions of people for the price of a car of paint and a new paint job! Not bad.
But this article is talking about the technology behind supercars and not the branding side of things (Which I am also very interested in anyway.) – Anyway as you probably already know the amount of sheer incredible technical advancements that go into supercars is just mind blowing. But the interesting issue is that these supercars are actually some of the safest in the world. Due to many having a carbon fibre body they are incredibly strong. Meaning if you are going at 100mph and something does go wrong, your survival rate is a lot higher! The below video shows a Pagini going into a brick wall at 30mph.
These videos always interest me as most people think it is the size of the crumple zone at the front shows how well built a car is. But that is the exact opposite. What you want is a large crumple zone, as this increases the amount of time it takes for the car to slow down. Think of it like going from 30mph to 0mph in 1 second vs going from 30mph to 0mph in 0.01 seconds. One would kill you the other would give you a few bruises. The larger the crumple zone the more safe a car is (generally speaking.)
I might do another article on all the tech associated with supercars but I just wanted to highlight this aspect today.
Bet you haven’t heard this title before? Generating business funding or sponsorships for a potential supercar rental agency, how can you do it, well we are going to talk to someone who did exactly this, He’s going to explain how he did it, where he is now, where he was and more importantly what you need to get started, it’s not what you think it might be. So without further ado I’ll let our writer take this over.
Funding a Supercar Rental Agency
Hi everyone, as Tom mentioned this is a relatively interesting topic that I thought people would be interested in hearing. I’ll start by giving some information about myself. I own 2 supercar rental websites, both of which generate approximately 50-100 enquiries a month.
I’m going to start with the story of how I got rejected by 12 banks and investors. You’ve probably heard all of this before, the business owner with a good idea goes to a bank and tries to get a loan, he gets rejected and the business gets put on the back-burner, he continues to work but he can’t do much without the funding. Well this was me but I was committed. I got rejected by approximately 12 banks and investors before securing a loan for £75,000 to purchase 3 supercars to add to our fleet.
The reason why I was eventually accepted and the requirements I think your audience will find interesting. It wasn’t down to good credit or how much I had invested into the business myself, it was based on 2 things, I had a house and I was “more experienced” which is a kind way of saying I was older than when I first applied, although banks will never never ever admit to this, they tend to shy away from lending to very young individuals, especially when they are trying to get £75,000 to buy supercars! Can you imagine the looks I got, well I did get those very looks. What turned all these no’s into yes eventually was the commitment I showed to my business. I had 3 models in my fleet already when I was applying for this loan.
I also explained that we were having to turn customers away and raise prices because we simply didn’t have enough of a fleet. A £75,000 loan across 20 years is approximately £300 a month. That’s 1 day per month renting 1 of our new fleet that the loan would allow us to buy 3 supercars…. The maths was there I just need to show the commitment. In 2010 I decided to do this by working like a monster to scrape together enough money to buy another supercar, this meant I could now have approximately £6,000 in earnings most months. Although that doesn’t sound like much more than £4.5, it makes a huge difference for 2 reasons. The 1st is now subconsciously they weren’t investing £75k for a 50% stake, the value was lower as it was 3 supercars vs my 4. And secondly the £6k per month meant I had turnovers of £6 x 12 = £72,000. Pretty much equal to the loan I was asking for. This meant that people knew if everything went to sh*t I was still making enough to pay 10% of the loan off per year, meaning I could pay it off inside 10 years, not nearer 20. That’s another big psychological factor.
The grind that lasted about 8 months, working stupid hours (10-12 hour days) almost every day meant I was able to afford my next supercar, which lead to generating the loan, which now means I have a fleet of 18 supercars across 2 brands. It’s the compound affect in action. Grind for as long as you need to grind! Just get it done.
Okay I’m not going to give you some long introduction as I think the title was enough, but what you need to know is that small businesses should be doing active marketing! Whatever type you decide if your business is quiet, you need to do more, its a difficult situation to be in as sales = more cash flow for more marketing, but you have to be willing to make a loss to make a longer term gain, that’s basic business! Alright without further ado the most useful marketing advice:
Focus on: Return On Investment Marketing Methods.
If you didn’t already know ROI or return on investment was initially introduced as a financial trading term (as it sounds) it discusses the potential ROI for a particular stock or trade, usually with a time element to the trade. For example a trade might make a 20% ROI in 6 months, which would be seen as really good in most financial trading agencies. The ROI weighed against the risk associated would lead to a decision to either purchase the stock or avoid the trade.
In the marketing world
In the marketing world ROI is more commonly referred to as how effective a particular marketing angle or advertising campaign will be. The higher the DIRECT ROI, generally the most successful the marketing campaign will be. You can see this frequently in online advertising with Adwords for example or in lesser businesses simply offering the “up-sell” when you are in a purchasing decision. Either way calculating ROI can be difficult but its extremely important. We will look at a few marketing campaigns and talk about the issues and why you should focus on ROI when making a decision whether to go ahead or not.
Remember: Although ROI is extremely important it is not everything. The brand recognition you gain from a certain marketing method could be priceless in the long run but might not make any sales in the short term, always factor brand recognition into your marketing budget decisions.
For example if we take TV advertising to start with, have you ever considered getting a TV ad? Probably not unless you are a large corporation, this is because there is no need, you think your customers wouldn’t convert well with an advert, great that’s the first step in ROI marketing, this is seeing and visualising what will work for your business. Every niche and industry is different so I cannot give you guides and data on what will work for you, you can do as much market research, listen to a number of experts and look through a ton of data but if you don’t feel like a marketing method will work for you, then don’t bother getting it!
If we next look at online marketing – Let’s say Google adwords for example, we know that people aren’t going to scroll to page 2 on Google, so why not pay Google a proportion to get people to click on your site? Easy! Well maybe not. ROI can be calculated quite easily on the face of it. If you convert 5% of your visitors and make £10 profit per visitor, then you can’t pay more than £0.50 per click. (50p x 20 = £10.) But you also have to factor in the LIFETIME value of a customer. This is the difficult bit. Generally you should be willing to make a slight loss to generate long term customers, in the longer term (and as your business grows) this will lead to much more profit!
3rd we are going to look at direct mail marketing. Personally one of my favourite marketing tactics. We use a leaflet company in London, UK for all our local distributions and drops. Although only on a small scale (5000 units) we get a good ROI as well as a stronger brand recognition, this leads us to belive that the campaign was a success! Design a simple leaflet that explains your main values and reasons why people shold buy from you and you can get straight to distribution. If you have time more than money then feel free to distribute yourself, if you do not then I highly recommend hiring a leaflet distribution agency… Or you could just hire some kid!
Finally SEO, SEO has a bad name for itself, people being scammed and individuals making £20k+ a month, but the truth is if done correctly and effectively Search engine optimisation is THE MOST EFFECTIVE marketing method. Just find yourself a good SEO company and get going, generally you should look for people with experience in your industry, don’t tend to go for someone just because they are close to where you live, that’s the best way to get ripped off. Search for companies who have experience promoting and ranking websites in your industry. Relevance is everything!
There are tons more marketing ideas that don’t require funds you just have to be willing to put the effort in!
Thanks for reading!
Remember to share, comment and I will get back to you in the comments section!
Another guest post today on the importance of branding your business in the right theme. This post is by the guys over at the London branding division.
Over 500 start ups go under every single day! That’s a crazy metric to comprehend. Why shouldn’t you be one of them? Well the answer is simply = YOU WILL BE! Unless you can ATTRACT enough customer and clients to survive!
Harsh? But true!
We believe that the best way to do this is to be different. I’m not going to write an article on how to get funding for your business as the team at Sponsorship-advice.org already have that covered. Instead I’m going to talk about what we have done and what we had problems with along the way. And yes this does turn into a rant so if you are against ranting about your business (which I’m guessing your not) then you should leave. If not, let’s get started.
Why Branding Is Important
We are a branding agency and our job is to convince people that branding is extremely important for their business!?
Our job is to teach them that without it, they will never be remembered.
There are 2 things that are guaranteed in life…. Death and taxes.
We can’t control either of those, so let’s play on people’s fear of both, but instead let’s switch the emphasis to: MONEY and TIME.
Ever heard the phrase time is money? Well its true and as we get older we start to realise it even more. But if you have 1 you most of time don’t have the other. Got both? Well done, you are a SUCCESS!
So how does this come back to you me and our businesses?
It’s simple, we have to convince people that without us they will not be successful. As success = Time + Money. If you can convince someone you can give them 1 of these 2 things then you will likely be a good marketer. If you can convince people you can give them both, then you are a legendary marketer!
Walk into a meeting and say “I will give you 10 minutes to listen to me” What do you do, you instantly remove the control from the prospect. I know this takes balls of steel but there is no reason why you can’t do it. And after 10 minutes (even if you presentation is not complete) say are you ready to sign up. This is a very odd but extremely successful way of doing business.
The next step is to show them how you saved someone both money and time. Think of it from the businesses perspective. Hi we are going to save you time, which will save you money, oh and also we are going to make you money…. So yeah!
Never forget the foreign market either! Hablar De Dinero makes a killing from translating their make money online content into Spanish!
If they believe you then they will say yes to any price you quote. You save us 4 years and 10,000 hours of staff time, sure we will pay you £100,000. It’s stupid not to as you save them £150,000. Oh and also in this time we should be able to generate a 200% return on investment. Which means we can earn your business £200,000. So this means over 4 years this business is saving £150,000 and earning £200,000 whilst at the same time paying you only £100,000.
I’ll leave you with one final sentence: BE SMART!