For six consecutive years, Cameron Herold grew 1-800-GOT-JUNK by 100%, grew the workforce by over 2,000% and took the company from $2 million to $106 million. So, he knows a thing or two about business.
Today we’re going to show you exactly how he recession proofs businesses and give you a step-by-step guide, so you too can protect your training organisation throughout these uncertain times.
Where to start...
As the world burns around us, that doesn't mean we should throw in the towel and call it a day. Besides, Jack Welch (successful American business executive) once said, "Never miss out on an opportunity like a good recession".
Now, we're obviously not in a recession (yet), but we can certainly apply the principles of what has gone before to the current situation - you know, the global pandemic, unstable politics... you get the idea.
So buckle in and get ready, because what we're about to tell you is only for those ready to forget everything they think they know about handling business in a crisis and prepared to follow Herold's unorthodox steps...
Increase your expenses
Grow your team with the right people
One of the best ways to safeguard your company against financial hardship is by having the right people on board. Strip out employees who don't share your values and the company's interests and start hiring in those who do. This is especially important in a training organisation where staff are representing the company day-in and day-out.
Each training session is a chance to impress and generate further business, so you certainly don't want trainers who are anything less than enthusiastic about what they do.
Hire another salesperson
When the going gets tough, businesses tend to focus on clients and shift their focus away from staff. This is one of the WORST things they can do, as it leaves prize staff for the picking.
When organisations start laying staff off, EVERYONE in the company starts to worry, even the top performing people. If your training organisation is the one hiring in the midst of a sea of redundancies, that positive buzz is going to radiate and attract proactive workers to you like a moth to a flame.
By doing this, you can snag top business development managers who will in turn generate more leads for you.
Give everyone a commission based raise
Hear me out, when you give everyone a stake in finding new business, and everyone is in a position to benefit from bringing in quality new business - they will build business you. Even those in delivery teams, whose job isn't normally business development.
Heck, go one step further and provide them with network and marketing training to increase their chances of success.
The more business you get through, the more training you can provide, the more training you can provide, the more professionals there are in the workplace and the more professionals there are, the more business and money you will make in return. It comes full circle you see.
Referrals
Similar to commission based raises, incentivise referrals and sit back as your employees 'do the work for you'.
Fire poor customers
80% of results come from 20% of your clients, so in theory you should fire 20% of your clients who can be sucking up to 80% of your time... Sounds terrifying doesn't it?
Deciding who to fire
In training, you always get those challenging clients who demand the earth and have 10 learners in 10 locations around the country. So one of the best ways to start is by asking your different teams, such as delivery and ops, who they would like to eliminate.
Generally they will all be singing from the same hymn sheet, which will provide a good indication of who is best for the sack. Remember, this process is less about perfection and more about getting rid of the obvious offenders to boost revenue.
Focus on profitability
Drill down into the qualifications and subjects you deliver in and make sure your delivery teams are working on profitable contracts with clients they enjoy.
Once you have identified these contracts and have cut your 20% of dead weight, you’ll also save the time and overheads spent on discussing those clients and pouring work into them with little or no return.
Someone has money, so go find it
Explore funding opportunities for training organisations
One of the bet places to start for funding opportunities is the Education and Skills Funding Agency website. This provides a breakdown of all funding from the government and where it is allocated to.
From here, you can look at a myriad of funding opportunities:
- Advanced learner loans - funding to help people aged 19 and over cover the cost of undertaking regulated qualifications at levels 3, 4, 5 and 6
- The Adult Education Budget - this is the main source of funding for all adult education outside of apprenticeships
- Apprenticeship funding - currently one of the most popular forms of government funded training
Align with profitable sectors
Align with sectors that are doing well in the struggling economy. Right now, it’s pharma, healthcare, logistics, food supply chain, e-commerce etc.
By diversifying into more cash rich industries, you will increase your chances increasing profit and revenue for your training organisation, even in the most dire of economic climates.
Keep track of which of your clients are doing well
Spending time with your top clients to increase revenue is easier than going out and finding new business. Don't be afraid to ask clients what percentage of their business you’re currently receiving and discuss how you can increase that.
Increase spend with existing clients
Once you have identified which of your clients are more profitable, upsell to them by adding on commercial training courses. Not only will this benefit them, it will also generate an extra line of revenue for you.
You can also agree revenue shares with channel partners that you can sell to clients, for example; recruitment or HR services.
Need help with funding? Let us put you in touch with an expert
Eliminate competition
Know your market
"Know thy enemy and know yourself" - General Sun Tzu
You'll see competing training providers at pitches, sure, but you need to go one step further in keeping an eye on the competition. Keep your friends close and your enemies closer. Ok, they're not your enemies, but you get the idea.
Instead of the occasional bumping into each other, keep track of your competitors vacancies, services, social media and website offerings.
Treat business like a sport and seize on vulnerability
If your competitor is lagging behind, don’t wait for them to overtake you, work harder and get further ahead.
Ray Kroc, the guy who brought you McDonalds as it is today, once said: "If any of my competitors were drowning, I'd stick a hose in their mouths and turn the water on".
This is pretty brutal, but you get the idea. In order to succeed in ensuring your training organisation thrives through hard times, you must power ahead and seize on the competition's vulnerability.
Snag the best players
If you were building a football team, you wouldn't want to just bring on anyone. You would want the best striker, the most promising defender and so on. Successful managers are always looking for emerging talent and constantly reviewing their own team.
And you should be doing the same. Watch out for new entrants coming into your space with new offers, inspired by the current pandemic. They may bring with them a fresh perspective and set of skills that can benefit your training organisation.
Look for acquisition opportunities and hire an intermediary to make a confidential approach on your behalf. Bolt associates are experienced in M&A can do this for you.
Bonus: If you need help mapping your market competitors, we have have delivery areas across the whole sector mapped - get in touch to find out more.
Steal customers through discounting
Steal customers through discounting
Customers will switch from competitors for even the smallest discount, so don’t be afraid to adjust your pricing in tough times, everyone is looking to tighten their belt, so even reducing by just a little can attract business.
Go above and beyond
Reducing prices isn't for everyone, so another way to increase business is by looking to do more than others.
So, be the best instead! Excel at customer service, deliver the most value for both employer and learner and don't forget to shout about it.
Once you've completed a positive transaction with a client, don't forget to ask them to leave a good review. This will further promote your business and win you clients.
Want Us To Help You Recession Proof Your Organisation Using Tactics From This Guide?
We can hold your hand to build you a talent machine.
We get results. This might mean you outsource all of it to us, or we give you the tools you need and move on. In reality, it’s usually a mix of both.
What you need to succeed:
- Hiring managers actively involved in the talent acquisition process. We don’t believe in shipping the hiring problem off to HR and forgetting about it. Out of sight, out of mind doesn’t work when it comes to good recruitment.
- A long term mindset. You need to commit to a variety of methods to develop a consistent flow of great people into your organisation. We’ll help you become a super desirable employer but this involves trying things and it won’t happen overnight.
If you want to hear from us weekly on the FE, skills and learning jobs market, you can subscribe below.
If you have any questions, you can find our founder Alex on Linkedin.
Finally, if you think someone would benefit from reading this article, please give it a share. we’d really appreciate it.