Cash Flow Crisis? 10 Ways to Kickstart Your Business
Ed: If you are in business sooner or later you are going to hit a Cash Flow Crisis. Its embarrassing and stressful but you have to take action to deal with it. This week Wardy of 3 Minute Angels shares what he did recently to solve a short term cash problem.
Can you really think through your own growth tactics objectively? This was the question I found myself asking myself last week.
Are you too close? Is this all too subjective for you? Usually people get consultants for this…
You see about a week ago I had a cash flow issue. I had more bills than income. I had over extended myself by working on my stable of startups.
There was certainly bad management on my side.
I’d also had my fair share of bad-luck events contributing to it. Including two deaths, a typhoon, two quick turn around international flights and bad man-flu.
Whatever the reason I knew I needed to liberate some cash and quickly. Going to a sheet of paper and pen I jotted down what my massage company does already as business models.
For the sake of the story let me tell you about this business so you have a context.
I have been running 3 Minute Angels (one of the largest massage companies in Australia) for over 13 years.
3 Minute Angels had early success with pioneering a new pricing mode for casual massage. We introduced the “pay what you think it’s worth” pricing model to our customers which were typically delivered in short bursts in a casual setting in bars, airports and festivals.
This business was a lot of fun and cash based however the hours were long and the margins low.
We then added a business to business offering for corporate wellness and reward for their staff and event massage for corporate promotions.
If you’ve worked for a big tech company – you may have been the recipient of one of our massages in your offices, big companies such as Google and Atlassian use our team regularly.
The business to business market is better hours, better margins and now makes up the majority of work we do. It’s main weakness is fluctuating demand where month to month we see swings of up to $100k in sales.
Clients ring us, they don’t want proactive sales for massage. In fact, they can only be attracted in and sold massage when they want to provide it to their staff.
We are an order taker in this market. Our product in corporate land has what we call low GAFF (give a f..k factor).
The business has revenues of just shy of $1 million (Ed: Thats a lot of massages) and gross profit of about 30% and ebit of 10%.
After so long running the business having a rainy day reserve for fluctuations and bad runs makes sense, but alas I’m the sort of entrepreneur that puts everything I earn to work.
So faced with only 2 things written down on a sheet of paper I challenged myself to think like a consultant and liberate my creativity on my old stalwart of a business.
Here is what I did
- I smoked a joint
- I went on the websites of overseas massage companies
- I wrote a list of strengths and weaknesses of our industry
- Repeated point 1
- I then gave myself 3 minutes to write down 9 ideas *
- I did that 8 more times
I went and removed duplicates and scored ideas on ease, cost. And time to test
I’ve now got 6 decent ideas including providing
- Full body mobile massages with huge discounts for locked in regular gigs
- Full body mobile massage quick turn around service
- Retail massages in pop up areas of existing retailers
- A return to pubs and clubs with an alliance with promotions going on for anti hangover pills
- An alliance with concierges that sees our services listed with uber and other services people use in hotels
- Expanding our airport operations beyond Virgin blue lounges
And then there’s the 60 other ideas I couldn’t do for free or in a single month. Or ones that require capital or ongoing time from my diary.
We then used the following free resources
- Leadpages.net to create a’squeeze page’ (there are other firms like my landing pages, use what suits you)
- I recorded a video on my laptop, uploaded to YouTube and embedded in the squeeze page template
- I setup an exit grabber
- and sent a well crafted email to my existing clients’
Less than a week later I am running the first test. And it seems to be ok. 2-days in and we have a$1200 sale and $3250 sale.
I’m excited instead of fearful about the business prospects and I’m back in the swing.
This was pretty easy to execute and didn’t take much time or cash to create. It’s possible you have all the answers. It’s possible you are your own best consultant.
The real lesson here is not that consultants are unnecessary for objectivity – or maybe that’s too subjective for me to call – what do you think?
Check out our new test landing pages here – you may even like a massage for you and your team.
* the process of rapidly developing and assessing ideas is derived from blitz thinking which comes from Australia’s very own Dr Ken Hudson