Carl* is the founder of a digital marketing consultancy that helps companies integrate client relationship and marketing systems into their business. He was a superb designer but a novice businessperson. Although Carl is very experienced, his business was quite new. He launched on a dream but his only financial capital was his savings. These were fast disappearing as Covid caused his clients to shut their wallets.
Carl couldn’t face going back to being an employee in someone else’s business. He needed to make fast progress to stay in business. I was referred to Carl by a business contact. During an initial, obligation free Zoom call, he told me his story and challenges.
The Business Mentor Need
As the business founder, Carl faced a number of issues normally associated with small businesses, especially in a global pandemic:
- Where is my next client coming from?
- How do I manage cashflow and access capital?
- Where do I find the right team members?
- Will I be able to spend enough time with my family?
He also had issues with some of the subcontractors he used – they were letting him down in terms of quality and turnaround times. And there simply wasn’t enough time in the day – between business development, covering for the mistakes his sub-contractors made, and doing his own work with clients, Carl was exhausted. His relationships with his family, especially his three adolescent kids, were suffering.
The Business Mentor Engagement
I believed I could help Carl, and I presented him with several options on how our business mentoring could work. We agreed on a three month, high intensity mentoring engagement. This included two scheduled meetings per week, with additional unlimited phone/email support.
At the start of each session (which lasted roughly about an hour) I would outline and get agreement on our agenda. At the conclusion, we would agree on next steps and who had responsibility for what.
In between, Carl would occasionally call me to ask for guidance on client and supplier matters. Other times he sought simply a sanity-check or to review draft client presentations. I also arranged some introductions ot my own contacts where I thought there would be mutual benefit.
Carl was exhausted. His relationships with his family, especially his three adolescent children, were suffering.
Let’s face it – Carl is a start-up dreamer who is super at his craft but naive and inexperienced in commercial matters. Importantly though, he is smart, hard-working and persistent. We faced some big challenges:
- Business Plan: finalising a Value Proposition and Ideal Client definition as well as a cash flow budget.
- Pricing: Carl loved what he did, but he undervalued it, like many small business owners. Too often, it seemed like he simply broke-even on a job.
- Marketing: Design and establish a digital marketing strategy
- Support team: Existing subcontractors were unreliable – they had to go and new ones recruited
- Business infrastructure: Poor contracts needed replacing
- Balance Sheet: Sell rental property to free up personal capital
Actions we took Together
First, we finished his business and marketing plan and identified the number of new clients and revenue he needed to live the lifestyle he desired. Ironically, as a digital marketing consultancy, Carl didn’t have a great digital marketing plan himself. Working together we identified a good outsourced solution to produce and manage his digital marketing in a manner congruent with his own brand.
Next, we put together a pricing model to ensure that Carl got not only paid for his time, but also got a profit margin for the risks he was taking as a business owner. Simply having a consistent methodology added efficiency. Now, he had a process for pricing work – not just relying on gut feel!
As a new business, Carl uses sub-contractors as required for projects, rather than hire employees. However, some of them were not performing to expectations. We rationally reviewed their performance. I referred Carl to a new lawyer that was better suited to his needs, who then drew up new supplier and client agreements – no more white-anting of clients! We broke off engagement with unsatisfactory suppliers and established a process which allowed Carl to find three new and better subcontractors.
Growth through Mentoring
Carl had a specific business opportunity in the UK with an Australian client that had offices there. We identified a partner director for him to collaborate with, incorporated an office in the UK and won the UK business of the client.
We reviewed his personal balance sheet and compared it with his revenue needs and business capital requirements. In particular, we ran the numbers on a couple of investment properties he owned. One wasn’t performing, so Carl decided to sell one that was absorbing a lot of his time. This freed up capital for business investment, but also took away a lot of stress and gave back valuable time that he could then devote to his family (he also got $60,000 more than he had valued it at).
In the three months I was Carl’s business mentor, we completed a lot of work and made many positive changes. In addition to the above actions, I’d been able to refer him to some new clients which more than covered the fees he paid me. It was time for Carl to now focus on cementing the gains he had made and build on the momentum. The business mentor engagement was done for now – we now touch base quarterly and he engages me on an ad-hoc basis.
*Names and some details have been changed to protect privacy. Personal references always available on request.