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From new hires to fewer cash-flow woes to rethinking how to expand, here's an update on half a dozen companies that have had the advice of our experts in our regular Challenge series
Hire a first employee or a business partner?
THE CHALLENGE: After working alone for five years putting in up to 18-hour days, Dan Yurman, the founder of Toronto-based copywriting agency Page 7 Copywriting, was finally in need of some help. However, he was waffling between whether he should hire his first full-time employee or bring on a business partner, who could also invest in the company.
THE UPDATE: All of the Challenge experts thought a partner was not a good idea: Mr. Yurman would have to give up some control and end up needing to hire an employee at some point He, himself, wasn’t completely sold on selling part of his business, so he was happy to go the hiring route. He hired someone who sent him a résumé after reading the Challenge article. She lived in Ottawa but, after they clicked, she moved to Toronto to work with him So far, it’s worked out better than he even expected, Mr. Yurman says. Revenue is up 34 per cent over last year, a gain he attributes mostly to the new employee; he’s freed up more of his own schedule by passing on some work, and he’s learned a lot about running a business. “I’ve matured tenfold since I’ve started working with someone,” he says. Morever, he hopes to hire a second employee in early 2013. “I didn’t realize how much you can make off a full-time employee.”
(Deborah Baic For The Globe and Mail)
Throw a launch party to build buzz?
THE CHALLENGE: About a year ago, Square One Insurance Services Inc. opened for business, and Daniel Mirkovic, co-founder, president and chief executive officer of the Vancouver-based startup in home insurance, was ready to spread the word. He wanted to throw a launch party, but wondered if that was really the best use of $20,000 to build buzz for his business.
THE UPDATE: A launch party, the Challenge experts said, was an outdated and wasteful way to try to gain attention. Mr. Mirkovic heard them, and decided to use that marketing cash in other ways. He handed out orange Square One branded umbrellas at the entrance of two of Vancouver's rapid-transit system SkyTrain stations in exchange for people's contact information; put up six Square One posters at the Vancouver City Centre and Waterfront stations for two months; and advertised in newspapers and on elevator TV screens in Vancouver condo buildings. Such moves helped the 11-employee company generate about $1-million in revenues in its first year. In hindsight, Mr. Mirkovic believes a launch party was a silly idea. “It is, to some degree, more of an ego thing,” he says. “I know we wouldn’t have had the same type of response if we threw a party for a small group of people.”
(Rafal Gerszak For The Globe and Mail)
Protect a company name?
THE CHALLENGE: Sean Brophy, president of Kingston, Ont.-based Spaces Self Storage Centres Inc., had big expansion plans to take his storage business across the country. The catch: At least one other business in one of the cities he targeted shared the same name. Mr. Brophy had spent about $25,000 to trademark his moniker and wanted to know whether he should pursue legal action.
THE UPDATE: Two pieces of advice led to a decision. First, he was told litigation would be expensive and, second, protecting a trademark is a complex process. That made him decide not only to forget fighting to protect his company’s name, but also to shelve expansion plans, at least for the time being. There was no way he could afford a court battle. Besides, he realized thanks to the experts’ advice, he’d gotten ahead of himself: He should pay attention to growing his business locally first. “Before we look to expand too far outside of our comfort zone, we have to make sure everything we’re doing at home is perfect,” he says.
(Lars Hagberg For The Globe and Mail)
How to get more cash upfront
THE CHALLENGE: Grail Noble, founder and president of Toronto-based Yellow House Events, runs a 10-person event-management company, which brought in about $5-million in revenue in 2012. The company ran about100 events this year, which means a lot of costs, such as food and hotel space, must be paid for upfront. Clients, though, had typically been paying 60 to 90 days after an event, so Ms. Noble had to dip into her company’s coffers to cover them. How could Yellow House get clients to put more money upfront so as not to become a cash-flow casualty?
THE UPDATE: After a year and half, the company’s cash-flow concerns are mostly no more. As one Challenge expert suggested, Ms. Noble had to become stricter with clients, seeking payment of most of the charge before an event took place. She now has a new policy for all clients: She asks for 80 per cent upfront, before or on the day of the event, with the balance to be cleared 30 days after. If a client can’t deal with those terms, she’ll say so long. (So far, everyone’s agreed.) She’s also letting clients pay by credit card, which gets her needed money right away, while the client has some time until its credit-card payment is due. Finally, she’s asked vendors for better terms. For some, she now has a 60-day window, rather than the day of the event, to make payment; for those that want immediate payment, she’s also paying by credit card rather than cash to give her, too, a few weeks before having to cover payments. “I’m definitely less concerned about cash flow than I was,” she says. “We only paid $100 in interest all year.”
(Brett Gundlock For The Globe and Mail)
Expand in uncertain times?
THE CHALLENGE: Expansion in uncertain times was the question facing Marc Gauvin, founder and president of Burlington, Ont.-based Aluminum Surface Technologies, a 35-employee company that provides aluminum coating for vehicles. Mr. Gauvin had planned to expand his 26,000-square-foot warehouse by about a third after landing a huge contract. But in a shaky economy, the client put the project on hold, also putting Mr. Gauvin’s own expansion plans up in the air. He wanted to know whether he should still go ahead or wait for an improvement in the economy.
THE UPDATE: Mr. Gauvin decided not to take the risk. He felt it would be difficult to recoup a $600,000 investment if the big contract wasn’t revived. Instead, he took one expert’s advice and rented an additional 5,000 square feet of space right across the street from his current location. Turns out that was a good move. He also followed another piece of advice, which was to ask the client directly about its plans for the big contract. After regular communication, he’s learned it is going ahead; Mr. Gauvin expects to begin work on it in April. By renting space, he’ll be able to handle the $500,000 contract – which will be a nice boost to the $4.5-million in revenue generated in 2012 – without the headache of overseeing a major construction job. “What’s the point of worrying?”
(Peter Power/Peter Power/The Globe and Mail)
Tracking employees’ time
THE CHALLENGE: Ben Zlotnick, the founder of Toronto-based commercial and residental landscaping company Aden Earthworks Inc., faced a big challenge in keeping track of his offsite employees’ time. About 80 per cent of his 50 employees are in the field and paid hourly; he wanted to find ways to better track and manage their time.
THE UPDATE: One expert suggested time-tracking software. Mr. Zlotnick took that suggestion by buying software that he’s now having customized internally to suit Aden Earthworks’ needs better. It will be ready to go in January, allowing him to create online schedules that all can see and staff will also be able to “tap in” to tell the office they’re on a job site. No one will have to use paper logs and time sheets any more; everything will be electronic. The program, he hopes, will make workers more productive, but also free up the time it takes to go through all the logs that staff currently submit at the end of the week. Partly due to this increased productivity, revenues, which were around $5.5-million this year, could get a 10-per-cent boost in 2013, he predicts. “More time means more jobs and more jobs means more revenue.”
(Michelle Siu For The Globe and Mail)