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How Marketing is Risk Management

by | Apr 7, 2022 | Risk Management | 0 comments

How Marketing Is Risk Management

Written by Eric Petersen, CIC

Yes, you read that title correctly. The marketing your company is doing to attract new customers and employees is actually a form of risk management. In a previous article, Building a Risk Management Mindset, we discussed how a business intentionally creates opportunities and avoids problems by installing a risk management mindset. Those same principles are very true when looking at your marketing. 

Let’s first define what I mean by marketing. Marketing can be any outward action or impression of your company that is released into the world that will either attract customers or employees to your company. Most people think of marketing in an active sense only, where the sales flyer or social media post that is created is marketing; however, many times marketing happens in a passive way without the business owner truly knowing that it is occuring. The appearance of who you are sets the stage for the customers and employees that will be drawn to your company. 

We are going to explore marketing from a risk management perspective to help you intentionally create the business you desire by looking at both external marketing (for customers) and internal marketing (for employees). 

 

External Marketing – This is what most people think about when they use the word “marketing,” which is the action taken by a company to attract new customers or sell more products/services to existing customers. All too often we see tree services advertising or promoting a unique one-time job that they did for someone, that, while they are really proud of that job, chances are they won’t be doing it again for a long time. This could be a removal job on an island or large crane job or a project in a remote area. Whatever the job is, when the company advertises it, their potential customers begin to connect that unique job to the expertise of the tree service. 

Those unique jobs typically are not ones that you want to rely on as a business and more often than not don’t fit into your Sales Sweet Spot. Your Sales Sweet Spot is where your Specialty Service intersects with your Ideal Customer. (To learn more on the Sales Sweet Spot read our article here). When you are operating outside of your Sweet Spot, the risk to your company increases dramatically. 

Therefore, it is the goal of your marketing to showcase the type of work that you are truly experts in and the type of work that you want more of so you can continue to operate within your Sweet Spot. To help your marketing team utilize a risk management mindset, ask yourself these questions: 

  • Have you defined the Sales Sweet Spot? (For one-on-one help in developing this, enroll in our Thrive Sales & Marketing Package)
  • Does your entire team, including the marketing team, understand your Sales Sweet Spot?
  • What type of jobs are you attracting through your marketing materials? 
  • Do your social media posts talk about and show the type of work that you want more of? 
  • Does your website accurately depict what type of work you want more of?
  • Have you ever run a marketing campaign that focused on a product/service that was outside of your Sales Sweet Spot? If so, how did the results end up?

 

Internal Marketing – Internal Marketing is the action or inaction to get new, quality employees interested in your company. This can be more difficult than external marketing, because it often happens without your conscious thought, yet is one of the main drivers for whether or not you are actually attracting quality employees. It goes without saying, but the better, more professional employees you have, the lower the risk of injury and accidents happening within your company is. 

Therefore, by intentionally marketing to the type of employee that you want, you are practicing risk management. To subjectively look at the internal marketing that is happening within your company today, ask yourself these questions:

  • Have you defined what your ideal employee’s characteristics are? (For one-on-one help in developing this, enroll in our Thrive Hiring & Recruiting Package)
  • What type of employee are you attracting through your external marketing? The adrenaline junkie or a professional arborist? 
  • Are all of your marketing pictures and messages focusing on projects or jobs outside of your Sales Sweet Spot? 
  • Does your messaging align with your staffing needs, today and into the future? 
  • What do your trucks, equipment and uniforms say about the professionalism of your team?
  • Do you promote employee appreciation in your social posts and on your website? 

 

Simply put, marketing, both external and internal, is happening every day within your company. How intentional you are about getting your desired customer and employee is what separates the good companies from the great ones. Employ a risk management mindset when thinking about your marketing and your company will be miles ahead of others in your area. 


If you’re struggling trying to implement a risk management mindset within your marketing, reach out to an ArboRisk team member today or enroll directly into our Thrive Sales and Marketing Package for one-on-one help.

Margaret Hebert

Budgeting

by | Nov 9, 2021 | Business Strategy | 0 comments

How To Help Budgeting Be Less Painful

Written by Joseph Toppi

Whether it is with personal or business finance, budgeting can be a struggle, time consuming, and sometimes down-right complex; not to mention the uncertainty and the questions that come up when thinking about making a budget.  For example:

“What do I include?”

“How much should I budget?”

“How do I follow my budget?”

Budgeting does not have to be painful, and it is vital to running a business. Being diligent with a budget can also be the difference between profitability and insolvency… direction and chaos… predictability and guesswork.

There are different types of budgets, but for this article we are going to take a look at an overhead budget, and answer the questions above. 

What Do I Include?

To best answer this, we must first look at what overhead is. In the simplest form, I define overhead as “the amount it takes for a company to be in business with no work going on.” If there is no work going on in your business, what are the things you would still need to be paying – rent, utilities, sales person, CEO, etc. Without knowing what to include in your overhead budget, you could inadvertently be charging too little, and hemorrhaging money.  It is important to make an extensive list of the overhead of your business. Some commonly missed items on an overhead budget are:

  • Warranty & Service
  • Un-billable Hours or Indirect Labor
  • Professional Fees (lawyer, accountant, etc.)
  • Estimating & Bidding
  • Indirect Materials
  • Sundries
  • Company Events
  • Bank Fees & Interest
  • Company Apparel (and other promotional items)

If you are unsure on what to include, ask yourself the question: “If I had no work going on, would I need…?”

How Much Should I Budget?

The amount you should budget per line item is going to be different for every company. The best way to get started knowing what to budget, is to look at the previous couple of years’ income statements.  The income statement is broken into revenue, costs of goods sold, and expenses.  The items under expenses are what your overhead is – for the most part. Take the line item amounts as your starting point, then ask yourself a few questions:

“Based on my goals set for the year, will this be enough?”

“Was I efficient last year spending this amount on ‘X’, or can I decrease my budget through better efficiency?”

“Do I anticipate a growth – or lull – season that I should account for?”

Do your best to be as accurate as you can be to achieve optimal control of your business’ profitability.

 

How Do I Follow My Budget?

Just like with goals, a budget can only be achieved and followed if it is before you, and the progress is tracked. The simplest answer is data tracking and budget-to-actual records. Let’s take a look at each of these.

Data Tracking – This does not have to be complicated or stressful, but does take diligence and a good system. It starts with discipline from the business owner to ensure that the expenses are accounted for, followed by good bookkeeping that allocates these expenses to the right line item. A good bookkeeping software will be able to track this for you, as long as it is entered in correctly by the bookkeeper.  That is why it is so important to have a good bookkeeper, and bookkeeping system.

Budget-To-Actual (BTA) – This is done by taking all the data you have tracked, and putting it into a program or spreadsheet next to your budget.  Having the amount budgeted next to the amount actually spent allows you to see where you are.  Updating and reviewing your BTA often allows you to make more budget friendly decisions, and will lead to more control over your budget.  For example, let’s say your Company Apparel budget for the year is $5,000, and in September your BTA shows you have already spent $4,500 on company apparel, then you can make better choices on how much winter clothing you are going to buy.  

Without creating a budget, tracking data, and compiling it in a way that allows you to review it; you are running your business blind. At that point, the financial aspect of your business – and it’s profitability – is just a guess. 

For more specific one-on-one budgeting help, sign up for our Thrive Finance Package today!