My business' profits cut in half. Update: Now Growing.

[valueinvestor]

I recently quit my full-time job and started a data-driven marketing company. It started strong, but my profits has been cut by half because of this epidemic. Although it was unexpected, it was also expected...

 

My business is ROI-focused (or RoAS-focused), and we've provided a ~60% increase in revenues for businesses in just under six months, especially more if they never used programmatic advertising. Even with the epidemic, we are generating revenues for clients who are leaving at the end of the month, through their marketing.

 

Yet with the additional business coming in with our service between the date they put in their request to cancel the service, and the service termination date - they are still adamant. However, this is why it was is also to be expected because my niche is in the event hospitality space (banquet halls, convention centres, venues, hotels, etc.), which has been hit hard with cancellations of events, and I have a hunch most of them were overleveraged...

 

Partly because the only clients I have are medium-sized businesses with owners who anticipated a downturn to begin with and had liquidity to begin with such as a Hilton Hotel in the GTA.

 

I also think this will be a great time for an entrepreneur and investor alike, even though I believe this may become worse than 2008 because we have an pandemic that will get much worse before it gets better.

 

So good people of COBF - what industries do you think will thrive TODAY with the economic backdrop that we are facing currently, and any other industries to consider when things start becoming optimistic? Any feedback would be great!

 

 

 

[rb]

Nothing will thrive today!

 

Some stuff will do well but not thrive. This is a temporary event and most businesses can't scale up quickly. You can make a lot of money manufacturing mask. But the problem is you can't manufacture them. You can't double production because u weren't operating at 50% capacity before. And by the time you build capacity there's no need for it.

 

Normally in dislocations like these you thrive using pricing and ripping off your customers. So in the GFC the bank I was working for had no problem making a ton of money in the interbank market when spreads went to high heavens. Nobody would blame us because we were LENDING money. Nevermind the rates. But what's the reaction gonna be if you're a mask manufacturer and you jack up prices 10x during a pandemic?

[Read the Footnotes]

Let's help out valueinvestor. I have a friend who has had a business for several years. She literally lost 100% of her clients. She plans on going to work on the front lines, probably with a hospital.

 

There have got to be some ideas that would help out during this time. Remember, if you can make money on something it's because somebody wants it or needs it. In some areas the need may be extreme in the future.

 

My tip is a reminder to solve other peoples problems. There are going to be a lot of problems. Go figure out how to solve one.

[mcliu]

Maybe live-streaming? Gaming?

[valueinvestor]

Nothing will thrive today!

 

Some stuff will do well but not thrive. This is a temporary event and most businesses can't scale up quickly. You can make a lot of money manufacturing mask. But the problem is you can't manufacture them. You can't double production because u weren't operating at 50% capacity before. And by the time you build capacity there's no need for it.

 

Normally in dislocations like these you thrive using pricing and ripping off your customers. So in the GFC the bank I was working for had no problem making a ton of money in the interbank market when spreads went to high heavens. Nobody would blame us because we were LENDING money. Nevermind the rates. But what's the reaction gonna be if you're a mask manufacturer and you jack up prices 10x during a pandemic?

 

It depends if you're just looking at price as the only lever, but there is volume, and inorganic growth. At the end of the day, there will be winners, such as Costco, Zoom (other remote-services), and even more winners if they use the opportunity to invest more in their product and service, while their competitors or scaling back.

 

Let's help out valueinvestor. I have a friend who has had a business for several years. She literally lost 100% of her clients. She plans on going to work on the front lines, probably with a hospital.

 

There have got to be some ideas that would help out during this time. Remember, if you can make money on something it's because somebody wants it or needs it. In some areas the need may be extreme in the future.

 

My tip is a reminder to solve other peoples problems. There are going to be a lot of problems. Go figure out how to solve one.

 

I full-heartedly agreed, you're paid in proportion to the value you bring - at the end of the day, there are businesses with enough dry powder to take advantage of the situation.

 

However as typing this, maybe rb is right - no industry will thrive but maybe I can find one or two players in a few industries that are ripe to take advantage of this downturn.

 

Maybe live-streaming? Gaming?

 

Good ideas - I will look into them. At the moment, I'm looking for industries with high CLV because that way I can charge more for the targeted leads my company brings to be closed by the client's salesforce.

[Parsad]

Nothing will thrive today!

 

Some stuff will do well but not thrive. This is a temporary event and most businesses can't scale up quickly. You can make a lot of money manufacturing mask. But the problem is you can't manufacture them. You can't double production because u weren't operating at 50% capacity before. And by the time you build capacity there's no need for it.

 

Normally in dislocations like these you thrive using pricing and ripping off your customers. So in the GFC the bank I was working for had no problem making a ton of money in the interbank market when spreads went to high heavens. Nobody would blame us because we were LENDING money. Nevermind the rates. But what's the reaction gonna be if you're a mask manufacturer and you jack up prices 10x during a pandemic?

 

You would think!  But our telemedicine business could not have been given a bigger boost than this...a perfect storm...and we will be the first telemedicine  business to market with a Covid-19 assessment module this week. 

 

Clinics will be overwhelmed...hospital emergency wards will be overwhelmed...social distancing is forcing people to use telemedicine...remote patients need telemedicine...and we are scalable into millions of visits for assessment and prescription delivery, whereas heavy infrastructure hospitals and clinics cannot handle the volume. 

 

I'm not happy about benefiting from a crisis, but this will allow goevisit.com to survive and thrive, providing an essential service during this pandemic.  Cheers!

[Read the Footnotes]

Nothing will thrive today!

 

Some stuff will do well but not thrive. This is a temporary event and most businesses can't scale up quickly. You can make a lot of money manufacturing mask. But the problem is you can't manufacture them. You can't double production because u weren't operating at 50% capacity before. And by the time you build capacity there's no need for it.

 

Normally in dislocations like these you thrive using pricing and ripping off your customers. So in the GFC the bank I was working for had no problem making a ton of money in the interbank market when spreads went to high heavens. Nobody would blame us because we were LENDING money. Nevermind the rates. But what's the reaction gonna be if you're a mask manufacturer and you jack up prices 10x during a pandemic?

 

You would think!  But our telemedicine business could not have been given a bigger boost than this...a perfect storm...and we will be the first telemedicine  business to market with a Covid-19 assessment module this week. 

 

Clinics will be overwhelmed...hospital emergency wards will be overwhelmed...social distancing is forcing people to use telemedicine...remote patients need telemedicine...and we are scalable into millions of visits for assessment and prescription delivery, whereas heavy infrastructure hospitals and clinics cannot handle the volume. 

 

I'm not happy about benefiting from a crisis, but this will allow goevisit.com to survive and thrive, providing an essential service during this pandemic.  Cheers!

Sanjeev, this is excellent news for the business and for the end users of the business. I was thinking of you and hoping this business would benefit. Telemedicine is going to play a huge roll in creating better outcomes. It keeps providers as a safe distance, doesn't require tons of PPE (both plant property and equiptment and more importantly Personal Protective Equipment), and is very scalable. The real difference between 1918 and today is communications technology. Communications is going to save more people than ventilators and telemedicine is just one of those tools. Most people will never even realize it.

 

There are probably even members of this board that are going to have better medical outcomes because they saw the Coronavirus discussion building months ago. Most people will never think about that either.

[cubsfan]

Nothing will thrive today!

 

Some stuff will do well but not thrive. This is a temporary event and most businesses can't scale up quickly. You can make a lot of money manufacturing mask. But the problem is you can't manufacture them. You can't double production because u weren't operating at 50% capacity before. And by the time you build capacity there's no need for it.

 

Normally in dislocations like these you thrive using pricing and ripping off your customers. So in the GFC the bank I was working for had no problem making a ton of money in the interbank market when spreads went to high heavens. Nobody would blame us because we were LENDING money. Nevermind the rates. But what's the reaction gonna be if you're a mask manufacturer and you jack up prices 10x during a pandemic?

 

You would think!  But our telemedicine business could not have been given a bigger boost than this...a perfect storm...and we will be the first telemedicine  business to market with a Covid-19 assessment module this week. 

 

Clinics will be overwhelmed...hospital emergency wards will be overwhelmed...social distancing is forcing people to use telemedicine...remote patients need telemedicine...and we are scalable into millions of visits for assessment and prescription delivery, whereas heavy infrastructure hospitals and clinics cannot handle the volume. 

 

I'm not happy about benefiting from a crisis, but this will allow goevisit.com to survive and thrive, providing an essential service during this pandemic.  Cheers!

 

Terrific value add for those in need (everyone) , at the same time, reducing burden on critical resources. 

You'll certainly benefit from a crisis - but what could be more important at this time..

[oddballstocks]

Nothing will thrive today!

 

Some stuff will do well but not thrive. This is a temporary event and most businesses can't scale up quickly. You can make a lot of money manufacturing mask. But the problem is you can't manufacture them. You can't double production because u weren't operating at 50% capacity before. And by the time you build capacity there's no need for it.

 

Normally in dislocations like these you thrive using pricing and ripping off your customers. So in the GFC the bank I was working for had no problem making a ton of money in the interbank market when spreads went to high heavens. Nobody would blame us because we were LENDING money. Nevermind the rates. But what's the reaction gonna be if you're a mask manufacturer and you jack up prices 10x during a pandemic?

 

You would think!  But our telemedicine business could not have been given a bigger boost than this...a perfect storm...and we will be the first telemedicine  business to market with a Covid-19 assessment module this week. 

 

Clinics will be overwhelmed...hospital emergency wards will be overwhelmed...social distancing is forcing people to use telemedicine...remote patients need telemedicine...and we are scalable into millions of visits for assessment and prescription delivery, whereas heavy infrastructure hospitals and clinics cannot handle the volume. 

 

I'm not happy about benefiting from a crisis, but this will allow goevisit.com to survive and thrive, providing an essential service during this pandemic.  Cheers!

 

Maybe you should connect with the OP and use their digital marketing to boost the telemedicine revenue and visibility by 60%.

 

I agree, telemedicine is a sweet spot.  For most things you can provide effective care over the wire, saving substantially.  The circumstances are unfortunate, but glad to hear you are seeing a big boost!

[LC]

Another area in terms of telemedicine is for regular script renewals.

 

We picked up an inhaler at the local walgreens for my wife, from a script written by a teledoc service that her company offers as part of their benefits package. She's never really needed one as an adult (had bronchitis as a kid apparently) but it's good to have on hand - especially with COVID19 flying around. Same goes for things like epinephrine.

 

This seems like an area easy to consolidate. Maybe now is a good time to grow the business as much as possible and sell to a larger market participant (TDOC)?

[valueinvestor]

Another area in terms of telemedicine is for regular script renewals.

 

We picked up an inhaler at the local walgreens for my wife, from a script written by a teledoc service that her company offers as part of their benefits package. She's never really needed one as an adult (had bronchitis as a kid apparently) but it's good to have on hand - especially with COVID19 flying around. Same goes for things like epinephrine.

 

This seems like an area easy to consolidate. Maybe now is a good time to grow the business as much as possible and sell to a larger market participant (TDOC)?

 

Haha more than happy to be of service! If any of you require marketing at this time - feel free to pm me.

[valueinvestor]

Another area in terms of telemedicine is for regular script renewals.

 

We picked up an inhaler at the local walgreens for my wife, from a script written by a teledoc service that her company offers as part of their benefits package. She's never really needed one as an adult (had bronchitis as a kid apparently) but it's good to have on hand - especially with COVID19 flying around. Same goes for things like epinephrine.

 

This seems like an area easy to consolidate. Maybe now is a good time to grow the business as much as possible and sell to a larger market participant (TDOC)?

 

Haha more than happy to be of service! If any of you require marketing at this time - feel free to pm me.

 

I think I found more niches to find!

 

Commercial Lenders

Investment Bankers

Advisory Firms

Consulting Firms

Mortgage Lenders

 

I need niches that are high in CLV because our targeted advertising generates leads with a cost of $100. Therefore customer lifetime value has to be at least $2,500.00 for the leads to make sense.

 

If anyone can help me with more niches, it would help. I really do want to take advantage of this downturn.

 

[Gregmal]

Mortgage related biz is obviously on fire right now. Anyone who's bought a house going back one year, to infinity, can refinance. Esports I would think is currently going to do well. Also, home delivering services. I recently started up a local group to do it for free, because I'm a good hearted piece of shit, but if I wanted to make some quick money, offering to go out in this dangerous world and acquire good for folks scared or unable to leave home, is probably very profitable.

[valueinvestor]

Mortgage related biz is obviously on fire right now. Anyone who's bought a house going back one year, to infinity, can refinance. Esports I would think is currently going to do well. Also, home delivering services. I recently started up a local group to do it for free, because I'm a good hearted piece of shit, but if I wanted to make some quick money, offering to go out in this dangerous world and acquire good for folks scared or unable to leave home, is probably very profitable.

 

Thanks for the suggestion! I will take a look at esport! Much appreciated Gregmal!

[jeffsreng]

I'm starting a technology business in South East Asia. Focus on your talents and try to monetize it.

[valueinvestor]

I'm starting a technology business in South East Asia. Focus on your talents and try to monetize it.

 

Agreed! Any chance you would want marketing we have a great track record of increasing sales via marketing.

[jeffsreng]

Free Cash from Facebook:

 

https://www.facebook.com/business/boost/grants

 

https://www.facebook.com/facebookblueprint/

[valueinvestor]

Thank you all for reading and commenting. You have no idea how much your comments meant, as I was going through a real tough time.

 

So here's an update. Just finished "restructuring" my business a few days ago, and  started cold-calling again.

 

Probably too early to celebrate, but much to my surprise I was able to close a client for few thousand dollars with a RoAS of 10% over a fixed hurdle rate.

 

Should translate to $100k+/year in revenues, also levers to upsell, as it's a hotel with a restaurant, spa, etc.

 

Going to send over the retainer agreement for the client to sign soon.

 

So thing's are looking up for me, as I was really worried how long I will be able to keep my team, follow-through on social commitments, and increase overall stakeholder value.

 

I've also booked several online meetings with mortgage brokers, investment bankers (rather M&A advisors), affordable housing, etc.

 

So thank you all! Couldn't have done it without you all!

[valueinvestor]

I didn't want to create a new thread, as I just wanted to keep the people here who supported me informed on my progress. In addition to anyone who would like some good news - here's a client (Ramada Jackson's Point Hotel) of mine explaining how they doubled their venue business and fully booked their summer - all before Phase 2 opening.

 

Hopefully this gives some hope for all of you who run businesses or are in industries that were decimated by this pandemic.

 

https://keywestvideo.wistia.com/medias/whg9car4mr#

 

Super happy to be part of the community.  ;D

 

[SharperDingaan]

Rather than look for new opportunities, strengthen your balance sheet, and tighten your value proposition.

You have been given the gift of time, and the runway to rethink and tighten your delivery - something that you could NOT do, were you operating normally.

 

Example: Why? and HOW is your rented space making you money? At current margin, how much MONTHLY revenue do you need to cover it? Should you even be renting? If gross margin is 10%, every 1K of rent is 10K/month of revenue - if that is >40% of your revenue, your footprint needs to shrink, today.  The immediate fix is higher margin = better value proposition = higher pricing.  Volume gains will come later, maybe.

 

Our beer business has reduced BE sales by 70%+, just by rethinking the business. Wage subsidies pay the staff making sanitizer in our small facility. Contract brew larger quantities of beer elsewhere. Trucks deliver sanitizer/beer in the same trip. Craft beer as BY-PRODUCT, time saved going to redesigned art-work and production set-ups comes 're-start''.

 

Good luck.

 

SD

 

 

 

 

 

 

 

[valueinvestor]

Likewise SharperDingaan  ;D