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Expanding a business in the face of financial woes - Q & A

Wayne wants to know how to expand his business even after he’s got himself in a financial hole.

Rich Sloan:   We are going to Wayne, out of Fairfax, Virginia.  Wayne, welcome to the show.

Wayne:  Thank you.  How are you doing, sir?

Rich Sloan:   Doing great.  Jeff, how are you doing?

Jeff Sloan:    I'm doing great.

Wayne:  All right.

Rich Sloan:     All right.

Jeff Sloan:    Bring it on.

Wayne:  All right.  I'm going to bring it on.

Rich Sloan:   All right.

Wayne:  I run my own detailing business.  I would say I got about a 100 clients.

Jeff Sloan:    It's a home detailing business?

Wayne:  Oh, I'm sorry, auto detailing business.

Jeff Sloan:    Auto detailing?  Okay.

Wayne:  It's mobile, and I'm just trying to expand.  You know?  But my truck keeps breaking down, and every time I make a little bit of money, I've got to use that money, you know, to get the truck fixed.  And I'm just on a shoestring right now.  You know what I mean?

Jeff Sloan:    So are you doing all the work yourself, or do you have people employed? 

Wayne:  I got, like, maybe one person.  And, you know, it really don't add up, 'cause sometime he don't come.  You know what I mean? So I'm just --

Jeff Sloan:    How long have you been in business?

Wayne:  A year and a half.

Jeff Sloan:    A year and a half?  Did you keep good financial records, so that you could demonstrate the performance of the business?

Wayne:  Not really, 'cause I'm by myself.

Jeff Sloan:    Yeah.  See, I mean, you know, you're digging yourself into a hole.

Wayne:  Exactly.

Jeff Sloan:    You are, and I'll tell you there's only a couple ways out of this thing.  I mean, number one, either you need to change the method by which you're doing business and figure out a better way to deliver the product or service and make it more efficient and more scalable.  You know, I don't know what that might be.  Bringing on other employees, whatever it may be.  Now, the reason you're digging yourself into a hole, is how the heck do you bring on new employees when you don't have the financial resources to do it?

Wayne:  Exactly, exactly.

Jeff Sloan:    Right. 

Wayne:  I'm getting -- I'm sorry.                 

Rich Sloan:   And one way to do it, if you can demonstrate that this is a good business in general.  So go out, do some market research.  Prove that this can be a good business.  Give other examples of it; build that into a business plan.  Try to figure out how you performed financially last year and be able to demonstrate that to a banker.  You might be able to go out and get a loan or perhaps even friends and family money, or maybe even angel money infused into the business, if you've got a good plan.  You'll be able to get some resources together.  Maybe hire some people, and get that business humming and more efficient.

Wayne:  Right.  'Cause, I mean, the calls is coming in.  You know?  That's not the problem.  The problem is keeping up with the work.

Jeff Sloan:    Well, keeping up with the work -- are you sure you're charging the right fees and so on?

Wayne:  Yeah.  A lot of people tell me I should raise my rates.

Jeff Sloan:    Well, I mean, that's another thing, too.  If you're not making money, but yet the calls are coming in there's demand in the marketplace.  Maybe you're not charging enough.  You know what it sounds like to me?  You need to do some market research.  You need to go out there.  Check the competition.  Find out if it's working for others, and if it is, how. 

Rich Sloan:   Yeah.

Jeff Sloan:    Do a little competitive espionage if you will, and figure out how it's working for others and use that model.

Rich Sloan:   Exactly.  And earlier in the show, we had a marketing coach on, his name is John Jantsch.

Wayne:  Uh-huh.

Rich Sloan:   And we talked to him about the idea that the really important principal of finding a very specific target for your business, a target market.  And when you do that market research, you're going to want to find out who are the people who I am going to put all of my energy toward, to make them aware of my service and to get them to buy my service.

Wayne:  Right.

Rich Sloan:   And that might mean that you do circulars.  That might mean that you, you know, drop off business cards in certain offices where people would definitely be, you know, willing to pay the high-end price for car detailing.  It might be all sorts of things.  You know?  It might be weekend related activities with a community church, those kinds of things.  But you need, as Jeff was saying, a formalized marketing strategy in order to start cranking up business opportunity.  And then, I think, Jeff, the employees may follow, if there's a real business there.

Jeff Sloan:    Well, that's right.  Maybe he's better off fielding the calls and promoting the business and having the employees go out to the field and do the work.