Arizona Franchisees Looking To Weather The Covid-19 Economic Storm
Two months ago Joe and Patty Caradonna were watching their business grow. More and more clients were signing up for secure document shredding services at their ProShred location in Arizona.
"We were doing really well," said Joe. "We were signing more customers and had just closed on two really big clients. I was happy with where we were headed."
Then came Covid-19. The pandemic has forced states, cities, local municipalities, and even some franchisees to shut down in an effort to stop the spread of the infectious virus.
"It has been really tough because customers are putting service on hold until the pandemic clears up," said Joe. "There is not much people can do, we just need to focus on making sure the business stays afloat."
Franchises are struggling through this economic downturn, but franchisees can find proactive ways to keep their head above waters over the next few months.
Business consultant John Waters said, "The most important thing that franchisees need to do right now is to break even long enough to get to the other side. Every business wants to make a profit, but every franchisee should focus on what kind of sales they need on a monthly or weekly basis to continue to function."
That means knowing what their operating overhead is and what they need to do in sales and revenue to cover that overhead cost. The Caradonnas are doing everything they can to keep their office running by cutting down on non-essential costs.
"We are tightening our belts in any way we can," said Patty Caradonna. "We are cutting down on unneeded supplies, limiting our local advertising, and cutting down on overtime so we can continue to pay all of our guys."
Waters agreed cutting costs is one of the quickest ways to reach break-even.
"You can extend your budget by diminishing your cost of overhead operations," said Waters. "Canceling non-essential services and putting certain accounts on hold can help you get through this crisis."
But Waters said it's also important for businesses to be pragmatic and continue to look for business. That means, he said, getting creative and promoting the business and finding opportunities.
"I know opportunities are limited, but in times like these franchisees need to keep making calls and setting up opportunities," said Waters. "Get creative and ask your clients what type of services they need and be willing to add additional services or discounts if that brings you business.
Many times prospective clients don't have the money for your services, but talking to them during economic hardships can mean they will keep you in mind when things improve.
Communication with clients, lenders, and landlords is also key to surviving the coronavirus economy. That's why the Caradonnas are keeping open communication with landlords and lenders.
Everyone is struggling right now, said Waters, so it is important for clients, businesses, vendors, and lenders to all work together to figure out ways to deal with payments.
"The best thing everyone can do is have a polite, open and honest discussion about payments," said Waters. "Work with each other to come up with a payment plan. We are all in the same boat and we have to keep it from sinking."
The Caradonnas are doing everything they can to cut costs and make payroll during this challenging time.
"We have always run a lean and mean ship," said Patty, "We just have to keep doing it."
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