I have been asked to crunch the numbers again and look at the budget which I had only planned to do in February. I know have to put my planned trip to Europe on hold by a week or two as this is too important to just leave plus the client raised the topic. Our business has been running for 10 months and we have managed to stay under budget every single month even with our client not making things easy.
I was chatting with them earlier this week and told them it was like dodging bullets having them as a client and that made everyone laugh, but the reality is this is actually the truth. We all know it is the truth and sometimes instead of beating around the bush you have to say it more directly. I actually do not care if they were offended and laughed out of shock and embarrassment, but that is my personality and I do speak my mind. When your business is supporting so many families this is not a game.
The business is very much a hands on business and even more so working to a tight budget as everyone needs to have multiple roles and know what needs to be done. Any other logistics business would not cope with what we have to do as managers and those in charge would delegate the work resulting in a work force twice the size.
The number crunching that needs to happen is not on our service partners, but more about what the real cost is each month and the cost of the total value we provide. I know if I went to another logistics company offering a similar service the price would be close to triple what we charge. This means we should at least be half that figure so a 50% increase is where my head is right now.
Our clients business has grown over the last 10 months and would never just hit them with a massive increase so we have to be fair and after crunching the numbers expect to be around a 20% increase with a few adjustments that they will have to pay service provides directly. The problem has been that their business has increased so the volumes that the original budget was calculated against needs to be adjusted or we will end up working for free.
Our clients mistakes and there were many have cost us time and money and as long as lessons are learned it makes everyone stronger. My initial investment has doubled from where I was previously comfortable and now I am at the uncomfortable stage so the service fees I charge have to increase.
This is a good business, but starting out from scratch with a limited budget does hold you back. The initial aim was to turn the business around from a business that was failing into a sustainable profitable business by using common sense, knowledge and experience.
There is still so much to add to expand the business and this all needs investment to take it to the next level. Purchasing a truck and upgrading our fleet would be a good start, but with the drivers we have I am rather hesitant. This all depends on the new negotiated budget which will determine how quickly we can expand the business.
The positive is our client has raised the budget topic and feels we need to be earning more which tells me financially their business is improving. They would have gone under if we had never taken over the logistics side so they do owe us that plus they recognise without us they have no business. We just want to get to a point that if they were not around we still have a business and I think that is the change in thought 10 months down the line. This is where I would like to be within the next 12 months and I know it will be possible to achieve with hard work.