Our recent café client was having a tough time before Christmas. They’d been trading for five years, were propping up cashflow with personal cash and credit cards, and had planned to close. The worst part of their ordeal was paying wages each week and dreading the shortfall they would need to make up personally.
They love their business but they were essentially paying to go to work. They were also struggling with work/life balance trying to juggle family, fill in shifts and do all the extra running around for the cafe.
Here at Revive Financial, we took a special interest in this business because it was one we knew all too well. Being local to one of our offices, our staff would drop in all the time. They do great food and coffee, are friendly and have a great work culture. We definitely didn’t want to see them close.
Now, just three months after we started talking to them, they’ve had their best day, week and month of sales ever and we are all wearing big smiles.
Small business challenges
Their challenges were no different to other small businesses. Like many SMEs, they were already running lean so cutting costs was not going to help. Sales and marketing, pricing, and time-consuming processes were their main challenges.
Taking a closer look
They thought they’d been doing terribly. But even though they had a ‘good’ accountant, after five years they didn’t know their basic operating figures. For example, they weren't sure about:
- how much they needed to sell each month to cover costs
- the profit they made on what they were selling
- the amount left in their pocket after overhead expenses were paid
Two minutes into our meeting we had these numbers and they could see they were actually really close to where they needed to be and could get there with a few small tweaks.
Solutions to common small business problems
They had a list of ideas to improve their café’s finances, but being so involved in the business, they couldn’t step back and see where to start.
We worked through their ideas, and added a few of our own, to address the above problem areas including:
- Pricing adjustments to improve their gross margin. They were using premium products but weren’t pricing their goods accordingly.
- Deciding on new products and food specials to keep customers coming in.
- Refining their customer service to make sure everyone has a great experience.
- Upping their social media activity and raising awareness of the products they offer.
- Refinancing some of their personal credit card debt to reduce their interest expense.
- Working on streamlining some of the time-consuming processes like restocking to reduce their time running around for the business.
With their new-found direction and drive, they’ve brought on some great new staff and the community support has become stronger than ever.
How we help small businesses
Every small to medium business has the same conundrum. Striking the right balance between earning enough to live on and not letting all your time go into running the business.
Helping many clients strike that balance in their unique businesses and personal situations, we understand the challenges people like you face running your business.
We’d love to help you find your right balance. Chat with us now on 1800 534 534.
For more information on business turnaround and restructuring options for business debt, check out our information page here.