Marketing Business Advice

[MrLizard]

Hello fellow humans, I am hoping you might be able to give me some advice.

MrsLizard runs a marketing company that has been slowly increasing in turn over for the past 4 years and has been operating for just over 5.

We have hit a point where we just cannot find decent staff. The business has no debt and about 25 clients (though most on 6 month contracts).

We have tried employing people at a high level - who seemed fine but then tried to sleep with one of our clients and steal some others

We have had grads and apprentices, we have tried marketing execs and coordinators from other companies. The good people soak up the knowledge and buy into the idea of helping build the business but then leave having got their CV to a good level. The bad ones tend to go on sick leave after passing probation for as long as they can (had like 6 people do this now...)

So we are at a point where the business is set to stay level at 180k turnover this year with probably 60k profit (before Mrs wage) but the Mrs has lost faith in trying to expand it as we just can't find anyone who wants to work. I can only think of a few options:

1. Get someone else to buy into the business, taking a share and therefore having a financial based invested interest in it doing well.

2. Try and merge with another company taking our clients with us somehow

3. Close up shop by slowly winding down - Mrs currently paying herself about 40k (depending on how the business cash flow is that month) but could walk into a job at a higher salary

4. Close up immediately and drive as far away as possible until run out of fuel, then get out and run until can't run anymore?

Any advice welcome!

[Frimley111R]

Getting someone to buy into the business is good in theory but then you have joint ownership and your wife needs to accept that decision making will happen that way and managing such relationships are a whole new challenge.

You could merge with another company but she may find similar issues to the above plus you need to work out how costs etc will merge too.

Why close it down? £40 a year is a good income.

I work part time with a small marketing agency who is excellent at what it does but not excellent at generating new business. If she has got that many clients she has done well IMO.

[MrLizard]

Frimley111R said:

Getting someone to buy into the business is good in theory but then you have joint ownership and your wife needs to accept that decision making will happen that way and managing such relationships are a whole new challenge.

You could merge with another company but she may find similar issues to the above plus you need to work out how costs etc will merge too.

Why close it down? £40 a year is a good income.

I work part time with a small marketing agency who is excellent at what it does but not excellent at generating new business. If she has got that many clients she has done well IMO.

I do agree that 40 a year is indeed not bad the issue is she is doing work she needs an admin to do, or constant hr issues. I hear what you are saying about the decision making, I think she would struggle coming to terms with that.

Its a very frustrating situation as she has obviously made it succeed but feels like a failure because she cant grow the company.

[Simpo Two]

It seems like the kind of business that may not be scaleable, because it's character driven. There's no law that says companies have to get bigger every year; if they do they very often go kaboom anyway.

I'd tuck in, take the 40K and concentrate on not losing clients.

[Frimley111R]

Simpo Two said:

It seems like the kind of business that may not be scaleable, because it's character driven. There's no law that says companies have to get bigger every year; if they do they very often go kaboom anyway.

I'd tuck in, take the 40K and concentrate on not losing clients.

It is but bit is facing the same challenge of any business, staff. In any business staff will come in, improve and then move on. If there is nowhere for them to progress to they have to do so. We've all done exactly the same thing ourselves.

[andy-xr]

Give the good ones a reason to stay if they're wanted around. There's a case that some people will always take a smaller company to get skills and experience before heading off to a bigger agency that's more well known, but there'll be some who's lifestyle and demands are better met with a smaller company.

I got into a brawl with someone on here once about equity, because it was offered to me when really they should have been paying better, but it'd be worth looking at for the top staff to get them more involved with the business.

I do agree though that just looking at growth isnt the be all and end all

[piemuncher]

I run a construction consultancy at a similar size (£220k turnover), slightly higher profit, two employees and two directors. We've only just completed our first year though, so not as established as yours. We've both run seperate businesses for the last couple of years before going into business together.

We're facing the same issues and there is a industry wide skills shortage in surveying. We've decided to focus on doing what we've been doing better, and becoming more selective with our clients.

Growth doesn't actually mean anything in terms of turnover. The key is earn the money you want to earn whilst living the life you want to live. We are now focussing on effectively choosing which clients we take on which ensures that we aren't working ourselves into the ground for the same amount of money as we'd earn out of our good clients. You have to trust that word will get around that you do things well and deliver what you promise.

When a suitable candidate turns up, we always look at them. If we like them we take them on, and find work for them to do. I think the key is to keep money in the business to take the hit when you take someone on until they're at full pace.

[technodup]

Sounds like you need to learn how to head hunt. If you're (and it didn't say you were) reliant on agencies, jobcentres etc you're always going to get the dross nobody else wants, almost by definition.

It's a skill in itself, finding people and approaching then when they're in employment, but those ARE the ones you want. Dependent on the role hotels aren't the worst place to start, especially for customer facing roles, sales etc. Hotel staff work long hours for st pay and are used to being professional with people. Often they'll be qualified in something other than hotel work too. If they'll knock their pan in doing all hours for buttons they'll be more motivated again when they's a decent wedge waved in their face.

I wouldn't go with the tread water option myself, if you're not going forward picking up new business then it's only a matter of time before clients leave or go under and you're quickly going backwards.

[rog007]

As touched upon already, you're in well-trodden territory and there are a number of options as you state. Getting the best staff is possible if your package is also the best. If that's not affordable, then 'tucking in' is a sound approach, but with additional work to ensure you're more effective, efficient and profitable i.e. improve the quality of your offering, select your clients more carefully and put up your prices to stem demand whilst improving profitability. Good luck!

[StevieBee]

Marketing is a broad church and it would be interesting to know what specifically the business does.

I'm guessing from your post that it's more focused towards the strategic planning side of things rather than the tactical stuff. If so, one way to expand is to look at the things you are currently out-sourcing, perhaps things like graphic design, web development and so on, and consider either merging with one of your suppliers or creating a new division within the company that offers these services in-house.

[MrLizard]

StevieBee said:

Marketing is a broad church and it would be interesting to know what specifically the business does.

I'm guessing from your post that it's more focused towards the strategic planning side of things rather than the tactical stuff. If so, one way to expand is to look at the things you are currently out-sourcing, perhaps things like graphic design, web development and so on, and consider either merging with one of your suppliers or creating a new division within the company that offers these services in-house.

This is something we have considered, the issue is that the vision of the business was to try and pursued SMB's to outsource all their marketing requirements, we then had 5 people from tactical to strategy experts who could plan/cost/implement/report on the methods we used. Oddly this did seem to work, businesses liked the idea of getting a proper dept for 1/4 the cost based on hours worked or projects etc. The issue is that we can't afford to pay people above and beyond what a normal salary for the job is, though it is fair, we do however being small have to expect them to work extra hours occasionally.

We have given out bonuses and ipad's or vouchers - even a car to someone. We have tried agencies etc but I think we could improve on the head hunting.

We have been more careful about picking clients this year and have got rid of a couple, we are also looking at shopping offering web development as this just isn't really cost effective anymore.

[Frimley111R]

Have you ever asked them why they left? I have carried out exit interviews in the past which can often be very helpful as people can tend to tell you why they really left without fear of recrimination as they have already secured a new position.