How I marketed myself out of a $150,000 black hole
Nixon Advantage turned over $4.67 million in 2009, with annual growth of about 74%. But it wasn’t always that easy – when the company first started, Nixon found himself short $150,000 after the bookkeeper was found to be misstating key figures.
Nixon immediately moved into action, and was able to market himself out of the problem – and he says other businesses can do the same.
So what happened when the incident occurred?
The business was about one or two years old at that point. It was during the first few years of business. What happened at that point was, this particular person was overstating the income in the business, and understating our expenses.
So what happened is that you have a situation where profit is vastly inflated than what it actually was, and expenses were greater than what we thought they were.
And what was the actual problem?
Simply, I had a bookkeeper who just couldn’t keep the books. It came down to incompetence. We were doing fine, at least I thought, and then she presented me with a bill of some sort that said we’re going to be “X” amount short in six weeks. The number of $150,000 springs to mind.
What was your reaction?
Of course, I hit the roof. You start asking the obvious questions, such as, “How did this happen?” and “What’s going on?” So after that I’m faced with this challenge – in six weeks’ time, I’m going to be short $150,000, about a month’s revenue or three month’s profit. That is a big problem to be dealing with in a short amount of time.
What happened to the bookkeeper?
I hit the roof and she got fired, obviously. Once we got through the entire problem I fired her for incompetence.
This person actually wasn’t an internal bookkeeper and wasn’t an accountant either. So the next person I hired was a CPA internally, and right now we have another CPA who recently joined. For our size business we really need to have someone of a certain calibre that can produce accurate reports.
So once you dealt with that, how did you move forward?
Right. What I did then is something that I’ve done for a number of years. Firstly, you have to understand the situation and look at what the reality of the problem is. That’s the most important part. Secondly, the hardest part, is innovate something new. Or rehash something old. Either way, take a new product or service, and then literally market myself out of the problem.
And what was your solution?
I basically invented a new $7,000 service which was marketed as a planning session. It would be a questionnaire, plus a three-hour phone session. I marketed it and only had to sell 24. I sold 24 in six weeks, and just marketed it to everyone. After the six weeks, our cashflow problem had disappeared.
That must have been a stressful six weeks.
Of course, that period was a stressful time. You need to calculate quickly how much you’re selling the service for, what type of advice you’re giving, and so on. How many you can sell, and the deadline needs to be figured out pretty quickly.
Is this something all businesses can do?
Many businesses get into trouble during their lifecycles, and I’ve had my fair share of them. But I think if you have marketing and sales skills within the business, and some creativity there, you have the ability to market and sell yourself out of any problem.
The very first thing you’ve got to say is, “Let’s trade our way out of this”. But whatever you do, it has to be in line with your current products.
What else do they need to keep in mind?
You also need to think about why someone is going to buy something in such a short time frame. So you need to make it a time-based offer to get the person to buy things on your own terms. And at this stage, you’re able to get the ball rolling. If you use a time-based or scarcity-based deal, it induces people to buy and they do so on your own terms.