Unexpected growth, unforeseen turns in business highlight the final results of our 2013 business owner makeover initiative
Story by Sean Fitzgerald, New North B2B publisher
The three years of conducting New North B2B’s Firefighters of Northeast Wisconsin initiative has provided no shortage of surprising outcomes.
From companies divesting themselves into separate entities, businesses on the brink of financial disaster rightsizing their balance sheets in order to receive new loans, to taming the ambitions of an entrepreneur taking her shop in too many nonstrategic directions, our firefighting business consultants have helped struggling or otherwise stagnant business owners find the path toward exceptional growth. Our 2013 edition was no different, with one of our two companies exceeding its timeline for growth by several months and another more settled in on an exit strategy for the future.
Finding the perfect rental match
When readers were first introduced to RentSmartRewards founder, owner, president and only employee Jo Edwards back in B2B’s April 2013 article, she had tiptoed through the first 18-months of a start-up online website helping renters find their ideal apartment, duplex or rental home available in the market. Edwards had big goals for growth, knowing that she offered a more unique service than many of the rental guides available online or in print.
We paired her up with Stop Selling Vanilla Ice Cream guru Steve Van Remortel, president of Green Bay-based SM Advisors, to drill down and define the unique competency of RentSmartRewards, then build a strategy to market that to its target audience of ideal clientele. Van Remortel developed his proprietary Stop Selling Vanilla Ice Cream process through his work with more than 500 clients who simply had unique products and services, but were simply promoting them in a vanilla manner among their competitors within their industry. He’s since published a book by the same name and conducts seminars across the region, the country, and even internationally.
Edwards’ RentSmartRewards website includes a 43-question profile renters fill out when registering for the site, offering a much more narrow focus of the kinds of rental properties they might be interested in pursuing. From the perspective of rental property owners and managers, RentSmartRewards offers a crop of pre-qualified rental candidates who already know a property they’re considering is within their budget and offers the amenities they’re seeking. Edwards said she and Van Remortel came to recognize her service as “a Match.com for renters and rental properties,” she said.
Marketing it as such would better define why renters and property management firms should consider RentSmartRewards as a valued tool. She changed the company’s tagline to “We’re different. We match.”
“I think that was kind of a breakthrough for her to think about her business that way,” Van Remortel said in a recent wrap-up interview after five months of working with Edwards. “We just weren’t sure how to transfer it to a go-to-market process.”
The two worked out a strategy around sales and marketing which includes a branding campaign through social media and direct marketing to rental property managers and owners, particularly through in-person, outside sales.
“Her strategy is in place, and now it’s just about execution, specifically, sales execution,” Van Remortel noted.
Building a growing team
As the only employee of the company, Edwards knew she needed to grow her organization. In mid-June she hired Jason Gegere as a web developer, followed by Brian Jannusch in early July to manage business development and social media strategy. A few weeks later she hired another business development representative, Max Krzyminski.
“I definitely needed to bring some people aboard. I needed the help,” Edwards said.
Edwards worked with Gegere to redesign the process renters use to answer the 43-question profile. She said it previously took about six to seven minutes to complete – far too long for someone online looking to find that perfect fit for an apartment. It’s now down to half that time, Edwards indicated, while still capturing all of the valuable data renters would find useful in making a smart decision. The goal is to reduce the duration of the profiling process down to two minutes.
Through a smattering of Craigslist postings and Jannusch’s work to define a concise social media strategy, RentSmartRewards saw a surge in the number of renters coming to the site to complete a profile and ultimately find an apartment. Back in April, Edwards said she’d like to attract at least 400 new renters to the site by the end of 2013.
“We’re way over that already,” Edwards said in mid-August. “Our analytics – even over the last two weeks – have had about 1,400 hits and about 80 percent of those people are filling out a profile.”
Such metrics are critical to the success of selling RentSmartRewards as a marketing destination for rental property owners and managers since that’s how the company earns its revenue. The job of her two-person business development staff is to sign on new properties, demonstrating the effectiveness of RentSmartRewards as opposed to other more traditional marketing channels that don’t offer the site’s breadth of screening qualified renters.
In the past few months, RentSmartRewards has expanded to include properties in the Milwaukee market – in addition to the Green Bay, Fox Valley and Madison markets mentioned in the initial Firefighters article in B2B this past April – well ahead of her schedule for penetrating Wisconsin’s largest rental market during the spring 2014 apartment move-in season. It’s mostly been by accident.
“I think what’s happened in the last six months is that we’ve been adding the most properties to our site in the Milwaukee area,” she said.
Edwards’ new goal for 2014 is to branch out to rental properties in the Chicago and Minnesota markets. In that regard, RentSmartRewards would like to grow its staff by adding a new business development representative every 90 days or so, Edwards said, allowing it to reach out to even more rental property owners and managers.
Van Remortel believes Edwards’ goals for growth are more than reasonable.
“She hasn’t even hit her stride yet,” Van Remortel said. “She has to educate the (rental) industry, because she’s changing how the industry does things.”
From Edwards’ point of view, the assistance she’s received from Van Remortel has been invaluable, and she fully recommends his Stop Selling Vanilla Ice Cream process and book.
“His book is a great roadmap for people – particularly startups like myself – but I’m sure it also works well for existing companies,” Edwards said.
Flattered by her endorsement, Van Remortel said the book is directed at smaller business owners who can’t afford tens of thousands of dollars to hire a consultant.
“The reason I wrote the book to begin with was to help someone exactly like Jo,” he said. “They can go through it on their own and at their own pace.”
Plugging revenue gaps
Kaukauna-based Cake Anatomy continues to gain more popularity, but not because of any outrageous marketing campaign. Word of mouth praise regarding the made-from-scratch quality of Dawn Bybee’s wedding and special event cakes made from premium ingredients has her kitchen working overtime, particularly during the busy wedding season between spring and fall.
The 8-year-old business run by Bybee and her daughter, Brianna Ropski, typically ramps up production during the summer months, sometimes to the tune of making as many as six or seven wedding cakes for each weekend.
“We are already incredibly busy that we sometimes had to turn clients away with the demand that we have,” Bybee said in late August. “People are booking their birthday cakes already three months out just to get on our books!”
Unfortunately for Bybee, the sheer number of weddings drops off substantially from December until March or April of each year, creating a meaningful revenue gap during the year. She’s considered adding retail sales, including a scenario in which she’d purchase additional retail space to provide walk-in bakery counter service of products like cookies, cupcakes, pies and other pastries, “all made from the same high-end quality products clients have come to expect and deserve,” Bybee said.
In April, B2B connected Bybee with Gary Vaughan, president of Appleton-based Guident Business Solutions, for five months of consultation on how Cake Anatomy can attract consistent revenues while continuing to grow. Vaughan’s philosophy contends that every decision a business owner makes is ultimately a financial decision, and as a result, having accurate, up-to-date and prudent financial information is critical to making well-informed decisions.
Vaughan and Bybee initially worked to sharpen the bookkeeping of Cake Anatomy, which Vaughan acknowledged was already in good shape. At Vaughan’s guidance, Bybee worked to separate QuickBooks files for Cake Anatomy LLC with those for the building she and her husband own which houses the downtown Kaukauna business as well as five residential rental units. While all lumped together previously, Vaughan urged her to separate the two entities.
They next crafted a budget for Cake Anatomy for the coming year which would lay the groundwork for the expansion options Bybee is considering.
Hurdles to growth
Vaughan said Bybee built her business on quality – a reputation earned and now more recognized by customers. But just offering “excellent quality” all the time can be a double-edged sword, Vaughan suggested.
“She doesn’t offer ‘good enough’ in her cakes,” he said. “A lot of her clients are coming in looking for ‘just good enough.’ You have to be careful with that because you could be limiting your business.”
For most business owners, excellent quality often costs much more to deliver than “just good enough.” It’s a financial decision Bybee will need to consider if she expands her product offerings to include day-to-day snacks around her customer’s homes, such as cookies, cupcakes and dessert bars.
“She’s very particular, though. She doesn’t want the quality to go down,” Vaughan observed.
Meanwhile, one of Bybee’s concerns back in B2B’s April introductory article was how she would keep Cake Anatomy a family business. She discovered along the route of her work with Vaughan that her daughter, Brianna, wasn’t necessarily planning a future working for her mother’s bakery fulltime. In fact, she’s headed off to college this fall to pursue a degree in art, a passion reflected in many of the award-winning 3-dimensional cakes she and her mother decorated for special events over the years. Bybee is nonetheless excited for her daughter, even though she won’t be by her side regularly in cake Anatomy’s kitchen.
“With Brianna going off to college, Gary and I discussed starting the search in finding a business partner to come in and help potentially expand into these many new areas of opportunity,” Bybee said.
Vaughan concurred, noting it’s a relationship Bybee will need to achieve her goals for growth.
“For her to go ahead, she needs a partner,” Vaughan said, noting it would be ideal to identify a candidate who might eventually become a successor to Cake Anatomy down the road.
At present, expanding the bakery’s product offerings is taking a back seat to identifying a potential partner in the business. Both Vaughan and Bybee said they hope to identify a partner and have them on board at least as an employee by spring 2014. That’ll give Bybee some time during the winter off-season for weddings to give serious reflection to the type of partner she’d like to consider bringing aboard.
One advantage for any potential suitor to partner in Cake Anatomy is the culture and reputation Bybee has already created, Vaughan noted.
“She’s not just selling wedding cakes, she’s selling a cake for your wedding,” Vaughan said. “She’s selling a whole experience, not just a cake.”
And that’s an intangible asset worth its weight in gold.