Lessons From A $4.8M/Year Marketing Service Business

Cole Scott

•

Published: October 15th, 2024

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About
Business

Cole Scott

Founder, FuseBox One

$420K

revenue/mo

Founders

Employees

FuseBox One

fuseboxone.com

from

started February 2017

$420,000

revenue/mo

Founders

Employees

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Hello! Who are you and what business did you start?

Hello, my name is Cole Scott, and I am the president of FuseBox One. We offer Digital Asset Management and Distributive Marketing/Brand Management to Mid-Size Companies and Enterprises. I started the company in 1997. In the 27 years in this market, I have seen the demand for managing Digital Assets increase, and there is a gap in tools to handle Digital Assets on a large scale.

The Digital Asset Management (DAM) tool helps to streamline your business workflow, organize files & manage brand guidelines. Think like you have to find a file from your system and there are thousands of digital content, photos, videos, graphics, PDFs, and templates and now without DAM it is a time-consuming process.

But here we solve the problem with our Digital Asset Management solutions, Digital Assets software is designed and has a tagging option by which you can search any file in a second. Boost productivity and sharing in no time.

How did you come up with your business idea?

I came up with the idea while working at Xerox. They had software that was trying to help with brand management, but it needed a lot of improvement. The biggest shortcoming is that many companies need white glove support and not just software. In my mind, this is where Distributive Marketing was born. It was about software and service, supporting the brand along with the distribution of all marketing collateral from digital to physical to all channels of the company.)

Many people ask me how I knew it was the right idea to work on and I always tell them because it was the feedback I was getting from the customer when I was working at Xerox. Over and over they would tell me that distributive marketing and brand control were not their core competencies.

They didn't just need the software, they needed someone to do it. This all came together when a customer of mine who had a small data business was looking to make an exit and retire. I felt like I could use what he had in place to build out what I was hearing in the marketplace.

My background prior to taking this leap was working in sales at Xerox focusing on production print, and trying to sell a software called XMPie. THe software had a focus on helping companies build a web interface where all employees could go to order, personalize, or download marketing collateral.

No one can tell your story better than you can. When I hired a salesperson it did not produce the same results as when I went out and told the company story.

Give us a step-by-step process for how you built the first version of your product.

We started with a home-grown solution that managed most digital assets, direct mail, and other physical collateral. With this we started with a small letter shop, to manage the physical production. Because I funded the business using an SBA Loan leveraging $700,000 to get started. This allowed me to acquire the foundations of the software and then in about 6 months upgrades were made to improve the first phase.

Developed our partnership and added licensed solutions to advance the UI on a bootstrap foundation, integration for social media, CRMs, Adobe, and Microsoft. During this time, we added a physical warehouse footprint along with 3pl.

Step three was when we developed a full-fledged commercial print and mail house. During this time, we also worked to build out our automation for order processing and communications. When someone orders a product, it should feel just like an Amazon experience: either they have some kind of digital delivery, or they are being emailed a confirmation. When the order is shipped, they are sent a tracking email and notification it is on the way. They also receive an email that it has been received.

Lately has been a focus on customer help centers as an optional add-on. The sole focus is driving user adoption, and ease of doing business. During this time we have focused on supporting organizations with Digital Asset Management. Our model has changed to support a customer base that also needs support with just digital assets. To do this we have become a licensed partner of Marcom Gather, one of the premier DAM platforms on the market.

Now we are supporting the marketing department as a one-stop shop from storing their digital assets, managing brand compliance, producing their marketing collateral, and distributing. The beauty is that we have some organizations that use some of our services while some use all of our services together in one solution.

How did you “launch” the business?

I started with the acquisition of a small data-focused company called JT Direct. This company also happened to be a customer of mine. Due to having a small budget, we started with direct sales. My main focus was to profile who the best customer was and then call on them. We made a point to work with our current customer base and ask for referrals.

Many of our customers are in the Marketing channel, and it seems to be a small world. This allowed for great networking, cross-selling, and leveraging networking. Later on we started focusing on driving new prospects to FuseBox One. As you will see we have a very rich blog section. We work hard to be the educational leader when it comes to distributive marketing, digital asset management, brand management, 3PL, direct mail, and commercial printing.

The most valuable lesson that I learned starting out is that no one can tell your story better than you can. When I hired a salesperson it did not produce the same results as when I went out and told the company story. It cost us valuable money and time that was not a luxury.

How did you land your first customers?

My first customers were acquired through networking and understanding that they had a sales force that needed help controlling their brand while distributing marketing assets across different sales channels. It took us about 3-5 months to add our first client. The annual revenue of that first client was around $125,000. Because of the longer sales cycles, we started looking for shorter sales cycles as well. This is when we started looking at our company from an ala cart perspective.

Dollars following that first customer were broken up into smaller clients to create more sustainability in our client base. Our revenue started to increase on the manufacturing side of the company for Commercial Printing & Direct Mail. This allowed us to learn about diversifying our client base and not having all of our eggs in one basket. It also allowed us to have a value add to a client base that may not need a Distributive Marketing or Brand Management solution.

Believe the numbers and work off of the data! When I first started the company I was working off of emotion and feeling… be sure you have a strong handle on items like your Profit & Loss, Balance Sheet, Cash Flow, and Inventory.

How have you grown your business?

Some of the growth happened through referrals. Now we have been working on helping educate consumers who are looking for a solution. We are very blog heavy, with LinkedIn support, along with other social networks. This means we are trying to answer questions, be thought leaders. To reach an audience that may have an interest we are blogging on Reddit and LinkedIn. Just the other day we had a demo request that tracked from a post on Reddit. As we become an expert on Brand Management, Digital Asset Management, and Distributed Marketing, we have had more organizations reaching out for support.

For this strategy to work we spend time on long-tail keywords that customers may be searching for, developing the content. We are also working on how our site is viewed by Google organically, to avoid paying for high-priced PPC.

Give us a breakdown of your revenue & financials.

Our average monthly revenue is between $380,000 - $420,000. We’ve grown the business on average 9-12% year-over-year.

Below is a breakdown of our revenue streams:

We had a slowdown over Covid, but now our financials are starting to grow:

Revenue: $4.8M
Gross Profit: 55%
Burden: 37%
Profit: 18%

What does the future look like?

Our future looks great, more organizations have complex sales channels, more content, need for customization, and they are looking for an expert to be an extension of their marketing team. Over the next 6 - 12 months we plan to target lead gen through Gannet and other SaaS platforms that organizations may be using as a research resource. Our lead gen will include some paid campaigns and then measure the ROI. Once we find the best recipe we will start to increase the marketing spend as we onramp new customers.

We imagine this will be ongoing over the next 5 years and onward. Our research has shown that end-users are going to resource pages to compare solutions and different platforms. For us, this is a better spend than Google and the keywords are spread out and expensive.

Through starting the business, have you learned anything particularly helpful or advantageous?

It is full of challenges. I would have never imagined Covid, supply chain issues, and labor shortage issues, but if you have resilience and keep it simple there is a solution. At the end of the day the numbers don’t lie.

During that time some of the best and worst decisions I have made come in the people I have hired. I spoke earlier in regards to salespersons not being able to tell the same story that I tell. That has been by far the worst hire that I have made for the organization.

At the same time, the best hire I have ever made was our VP of Operations. Investing in someone who could fix our ERP system, job costing profitability, and sqft profitability.

One other item that we leaned into that our VP of Operations to lead on was the restructure of our data management. Historically over time, we had created many layers in our folder structure that worked against our automation and software. He was able to bring the folder structure back up to the top two levels so that no human or script was searching for a file.

Advice for other entrepreneurs who want to get started or are just starting out?

Believe the numbers and work off of the data! When I first started the company I was working off of emotion and feeling. In retrospect, this is never a good strategy or business plan when building or running a company. There are lots of false truths and to keep those eroding your business be sure you have a strong handle on items like your Profit & Loss, Balance Sheet, Cash Flow, and Inventory.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

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