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Hello Kisha, how do handle a business that has been in existence for six years and you have not received any profits? How do you handle marketing of the business?

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What kind of marketing paid or word of mouth have you done so far? Have you done an analysis of your cash flow?

Report Carlos's answer

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The business in question is a school, we have done some marketing through door to door distribution of fliers, newspaper advert through the young readers magazine, subscribed to an online paper for some time, did radio adverts, and carried out a drive announcing to all our Neighborhood. We are on face book and on Google

We would love to do more sales promotion but our cash flow is not so good either. We have a number of bad debtors or receivables of about 8% per annum. Every time we employ very aggressive policies on school Fees we lose students

Report Stephen's answer

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If the business has no profit for 6 years and you still in business, you must be very rich, can afford to live with income for 6 years.

I believe your business still survive and break-even with small profit sometimes. If this is not the case, and if you borrow money from the bank to finance these 6 years, you are in very big trouble.

Base on your description, if we just address your sales and cash flow, there is a high chance that very small sales progress due to many reasons and a small investment in marketing will have high cash flow impact.

If you can or engage someone to perform a deep analysis (to gain great insights) to understand your business capabilities, performance/ productivities, and the growth gap. Once you know your situation well, you can develop a programme to include the following:

  1. Make immediate adjustment to increase sales, profit, cash flow

  2. Reposition for long-term improvement plan

  3. Transformation as an ongoing basis

Report Quek's answer

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You are losing money from accounts payable, i.e., bad debtors and non-paid fees. If you're interested, let's dive into this and see what changes we can make to get your business profitable.

I'll PM you.

Report Carlos's answer

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Dear Carlos Thanks for your response, it made me question a number of our strategic issues.

For all these years we have financed our business without any loan from the bank. The annual loss gap has been reducing but we have not reached that break even point. Every year we have been expanding by adding a class, this has stressed our resources as well

Now the current lock down has put all operations down, at the time of closing business about 45% of our expected revenue for term one was still outstanding. This money we may write it off, we’re not even so sure when term 2 will open but we’re meeting some operational costs like part of staff wages and rent payable is expanding per day

Report Stephen's answer

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U will need some training beyond ur thinking box, ask me what I mean then I will chat u up

Report Victor's answer

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Dear Stephen you said something about when you impose sanctions you loss student. First you must know you are not running a charity organization and secondly you need to have a target audience, you must understand that your business is not for everybody but a targeted population. I strongly believe in quality and not quantity, I will advice instead of focusing on expansion and having more students, why not improve the quality of service. Remember the students are your products and if they are sound and unique, I assure you that parents that know the important of quality and sound education will pay anything to give their child that.

Report PRECIOUS's answer

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The problem is that,YOU DONT HAVE A BUSINESS PLAN. Do you? I dont think so.

You see a business plan is not a textbook exercise. Its a comprehensive document that deeply analyses your business operation and determines the breaking even point. With a business plan,you have a section that is called the break-even point and sensitivity analyses. This part will strategically narrow your business and business environment to determine the viability of your business. Well,truth be told. Profit is not really an indicator of a viable business. Afterall,Tesla Motors, the biggest electric car company in the world has not made any profit in the last 5 years. But,dont get excited,Tesla is not focused on short term profits. They are growing and expanding very fast. They did make a profit one quarter but then focused back on growth. They are in a very new and unique industry. So they will make PROFIT.

First of all,why are you not making profit? You are into education and training and i think its a unique industry.

Your Pricing Strategy is Wrong Solution: Reverse engineer your prices. pricing? How did you come up with the prices you charge for your service? Many entrepreneurs make the mistake of basing prices solely on what others are charging or on what they “feel” is fair. This is a a wrong approach. Your financial plan,after a detail feasibility analysis,would have helped you. You see the importance of a business plan.

Your Business Isn’t Attracting the Right Kind of Customers/Clients Do you know your ideal customer.

Do you have a great product, but you’re not making many sales? Are you amazing at what you do, but you can’t get prospects to convert to paid clients? Are you getting a lot of difficult clients or dissatisfied customers? You, my friend, may not be attracting the right people to your business.

If your business is attracting the wrong kind of customers or isn’t attracting any at all, I’m afraid it’s back to the drawing board for you. You need to revisit your customer avatar. Never created one? Well, there’s your problem! A customer avatar is also known as your buyer persona or ideal customer.

WHAT TO DO TO IMPROVE YOUR PROFIT 1) Prepare a strategic plan with 1-year, 3-year, and 5-year goals .Its a MUST,DO IT NOW. 2)Implement and monitor a budget 3)Seek input from outside your organization. I love what you are doing NOW, Trying to get help from consultant through this GREAT FORUM, but you know this is just a forum. Seek a professional who will dedicate to your business and revitalize it for you. 4)Benchmark revenue and overhead percentages to the leaders in your industry. 5) Develop a cost accounting system to determine exactly what it costs you to deliver a service or product, This is where a FINANCIAL PLAN of your business would have helped you.

Revaluate again. Your niche in Uganda is mind-boggling because of the level of illiteracy in Uganda, So entrepreneurs in the educations sector are in a profitable business.

Report Aaron's answer

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Your business is a school for children; you need to contact your local government and file proper business papers (ie. building/energy/employee contracts) for the school to be maintained and operative.

Report Margaret's answer

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Dear Precious and other Mentors Your advice is really spot on, we are using this lockdown period to seriously review a number of things. you questions or tips have helped us think deeper and We are going to have a consultant to talk to physically and also to evaluate our current situation as we forge a way forward

Our long term strategy is to relocate to our own premises with big space, we acquired land and plans are underway. Initially we were interested in the high class parents but after failing to attract and maintain a reasonable number we compromised on our targeted market , we are going to review this as well

Although the school project has failed to pick up our 2 restaurants are doing fairly well. This reassures us that we have what it takes to run successfully business.

Report Stephen's answer

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Dear Precious and other Mentors Your advice is really spot on, we are using this lockdown period to seriously review a number of things. you questions or tips have helped us think deeper and We are going to have a consultant to talk to physically and also to evaluate our current situation as we forge a way forward

Our long term strategy is to relocate to our own premises with big space, we acquired land and plans are underway. Initially we were interested in the high class parents but after failing to attract and maintain a reasonable number we compromised on our targeted market , we are going to review this as well

Although the school project has failed to pick up our 2 restaurants are doing fairly well. This reassures us that we have what it takes to run successfully business.

Report Stephen's answer

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The ideas shared by the others are good. Find some time and we meet up for further guidance. I am based in Mukono, Uganda

Report James's answer

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