Perhaps you’ve heard the old saying, “Keep it small, keep it all”. In business, it typically refers to containing or minimizing the size of your business and overhead, in order to make sure that your company is profitable. This is doubly important with small business, and especially necessary when you’re talking about businesses in industries that change rapidly.
DanMatt Media is one such business. We’re small, family-owned and operated, and we are in an industry that changes very fast, sometimes even daily. Unlike traditional media channels such as print, radio and television, ads in the digital world can be put up and pulled down every single day, and sometimes multiple times in a day. But with that flexibility comes a very real problem; lack of continuity. These days, more than ever, clients come and go. Budgets get increased and then slashed, and customers more and more use price as the single most important factor on which agency they choose. What this all boils down to is that you can no longer count on anything, or anyone, for solid revenue every month. All of this necessitates keeping your digital marketing agency streamlined, in order to help ensure that you stay in business.
My last company (the name of which I won’t mention here) didn’t understand this concept. Perhaps out of vanity, or perhaps out of ignorance, their payroll grew to 4x what it needed to be to run the company. They had an entire floor of a high-rise building downtown, when what they really needed was a small office in the suburbs. This came about because the CEO assumed that the heydays of high revenue would continue in perpetuity. Of course it didn’t, and when it didn’t the company fell on hard times. The company became overstaffed and underfunded. It has subsequently been sold, rebranded, sold again, and is now out of business. The lesson here is that a small business must always plan for the future. The good times never roll month-in and month-out, so you can’t allow your overhead and work force to be dependent on your top quarterly earnings. You have to plan for the lowest common denominator.
Doing so not only ensures that your company can weather a storm of poor months or even poor quarters, but it also allows you to pass some of those savings onto your clients. And that in turn helps you to land new ones, which in turn helps you to grow, save, and ultimately stay in business. Small business owners would therefore be wise to ensure that their overhead and payroll are commensurate with their lowest monthly revenue figures. When the good times are rolling, save the profits and re-invest in your business, which can include additional hires, but only when necessary. And skip the fancy downtown office.