A recession success story
Many companies have had to reinvent themselves over the past three years. Mail Masters is an example of how one small firm transformed itself and is seeing the benefits of making change. Their business was down 45 percent in sales in 2009 from 2008, and they needed to make change quickly to preserve cash, grow sales and start making a profit.
Mail Masters was primarily a direct mail company until the beginning of their transformation in late 2009. That year the owners, Lynndell and Briana Epp, started providing additional marketing services that their client's needed. This included digital color printing, fulfillment services, web development, Search Engine Optimization (SEO), marketing plan development, and creative services (copy writing and design). They identified that smaller companies, firms with less than $5 million are generally underserved and needed the help to start growing their business.
The result of their efforts started showing in early 2010. By the end of the first quarter their profits where 300 percent better than the previous year and they doubled sales in 2010 compared to 2009. 2011 is on track to be a record year in terms of profit and cash flow, with sales continuing to grow. Here are a few areas they encountered on their journey:
The owners of Mail Masters found they did not react quickly enough to the downturn in sales to trim excess labor and overhead costs. They made some changes, but were convinced their sales would come back. It was not until October 2009 did they make all the changes necessary to reach a cash flow neutral position, which allowed them to invest in growing their business.
Being a small business they had very limited resourced so they had to choose investment very carefully. An area they leveraged to increase marketing reach was internet and social media marketing. Lynndell started an email newsletter program to supplement their hardcopy newsletter, developed an online presence with social media tools (Twitter, Facebook and LinkedIn), and started a 3 Minute Marketing Idea video campaign on YouTube (http://youtube.com/user/2minutemarketingidea). Leveraging web tools allowed Mail Masters to grow visibility and communicate with customers and prospects at a manageable cost.
Briana tells us that it is easier and cheaper to keep current customers than gain new. One of their early initiatives was to secure and grow their current customers. They did this primarily through a diligent program of visiting top accounts, increasing communication to all current customers, and listening to what was going on their businesses.
Buying a Competitor
In early 2010 Mail Masters completed the acquisition of another mail shop in Boulder that provided them with increased revenues, new clients and additional services. The acquisition furthered their direction of becoming a marketing services firm and included some operational tools that the owners had wanted to implement for a number of years. The integration did not go off without issues, but overall it was a success.
Lynndell and Briana assembled a team of outside advisors to help them navigate the difficult times and opportunities. Their key partners include an outsourced bookkeeping firm, a business coaching and consulting company, a business attorney and their accountant. The outsourcing of bookkeeping was a key to providing additional financial support to their company as well as allowing the owners to focus on their core business. The bookkeeping firm also provides fractional CFO support, which allows the Epp's to have a better financial understanding to their business decisions.
Mail Masters enlisted the help of a business coaching and consulting firm in late 2009 that allowed them to get an outside look in their industry and business. The consulting firm brought tools and skills into the organization that was lacking by the owners, which provided the support to develop the strategic initiatives as well as the accountability to facilitate implementation.
A Continuing Process
The Mail Masters team is continuing to make progress against their goals, but it doesn't come easy. The management and employees of the firm continually work toward their goals, but can find it difficult to stay focused on the important initiatives that will get them there. The area that keeps them awake at night is constantly thinking of what to do next to stay on top of the business that will set them apart in their market.
Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations. Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value by managing pain, growth and owner exits. Larry is a consultant, public speaker, and the author of two books "Owner Exit Planning: Leave On Your Own Terms" and "Mapping Your Recovery: Grow sales in difficult times", www.roundhouseadvisors.com/growsalesbook . For additional information visit www.RoundhouseAdvisors.com