September 2019

Serving Up Optimal Cash Flow in the Hospitality Industry | Blue Door Communications

10 minute read

Spotting a market gap and seizing the opportunity is the secret sauce to business success. Having the working capital and infrastructure to support your business launch, however, is what will really determine whether you can survive startup mode.

Laura Silver is the founder and CEO of Blue Door Communications, an agency catering to the hospitality industry based in Toronto. Here she shares her agency’s growth story.

Q: What inspired you to start your company?

Laura: I was working for a top Toronto law firm when I was made an offer to join a strategic communications firm. With little to no experience in this area, I started as an administrative assistant to one of the partners and over the course of 10+ years climbed to a senior associate position on the PR team. In that role, we worked in all industries (technology, healthcare, retail, manufacturing), but I was really in love with the hospitality sector and wanted to focus all my time there. I grew up in a family that owned restaurants as well as a brewery. The food and beverage category was where I belonged and where I could excel.

I saw an opportunity to build and launch a niche agency that would focus all its energy and expertise on hotels, bars and restaurants. I sat down with the owners behind some of Toronto’s top dining spots to see if my inclination for the space was right. Each of them told me that they struggle to find affordable agencies in the city that truly understand the ins and outs of the hospitality industry. I spent the next few months building a business plan and finding suitable investors.

A few months later, I resigned from my full-time job, moved into a small office space and Blue Door Communications was born. We started with one client on August 1, 2016; today we represent more than 50 venues across Canada. We were recently nominated for a Holmes Best New Agency in North America award and were voted Notable’s Best Agency of the Year in 2018.

Q: What business problem does your company’s services solve?

Laura: Most restaurants operate with a profit margin of approximately 3%, so that doesn’t give them much room to invest in marketing. Each dollar they spend has to have a return on investment (ROI), and they need to trust the people they bring aboard to help shape that growth.

We offer our clients the assurance that we are a strategic, ROI-centric agency that truly understands their business. When we can sit in a restaurant across from its executive chef and talk about food costs, it makes them feel good knowing we know how to market them better than any other agency. You can’t just understand media and advertising, you have to know the entire business you’re servicing—how it works, how they make money, how they lose money and what motivates them.

Q: Tell us about Blue Door Communications’ services.

Laura: We pride ourselves on being a full-service PR and digital agency with two distinct departments for each initiative and one of few agencies to offer both services under the same roof. We believe it provides great synergy for our clients when the person who manages their media profile sits next to the person who manages their Instagram strategy.

Our core services for PR include media strategy development, media relations, event management, media monitoring, copywriting and crisis communications. Our digital arm offers digital advertising strategy and execution, as well as social media management and branding. We also provide professional photography, videography and graphic design in-house.

Q: How did you get started?

Laura: Blue Door began with two employees working out of my loft and sometimes out of a local nightclub. We worked 24 hours a day, sacrificed our personal lives and worked for free when we had to just to have the chance to show off our work.

Together with our investors and advisors, we found ourselves lining up meetings and being invited to the table for major clients. All the while we were building our foundation as if we were a public company. We believe structure is very important, which is why even when we had just two employees and not even a logo, we had a board of directors, advisory board, investor groups and so forth.

People say you have to dress for the job you want; we look at it like we have to build the company we want to be in 10 years.

Q: How did you prioritize your finances?

Laura: At Blue Door, watching our money is just as critical as structure. We have three levels of accounting that help us manage our day-to-day, monthly and yearly cash flow. We watch our cash flow very carefully, down to every office supply.

We invested our first investor injection into software so we could measure our work and show our value to clients. To this day, our highest expenses fall under technology so we can have access to the latest tools to do great work, including software for analytics, employee time-tracking, project management, graphic design, etc.

We love our employees, so this is always a priority. We invest in culture but this doesn’t mean fancy lavish dinners. It means picnics in the park, take-out Chinese food on Fridays, half days on long weekends, and surprise bonus cheques.

We save money so we can afford to recruit and retain great talent. We believe this is how we have successfully expanded to a staff of 25 full-timers within two years.

Q: What have you learned about business finance?

Laura: Business finance is a full-time job, and it needs constant attention. In addition to our three levels of accounting, my director and I review everything.

I can recite our AR, AP, monthly expenses and cash flow projections off the top of my head. As CEO, I need to be aware of and privy to all the financial dealings of my company. It is time- intensive, but for a two-year-old company, we must be diligent.

When we first started, we couldn’t get a credit card from any bank, so I had to use a personal line of credit to pay for expenses. Today, Blue Door exclusively uses American Express®—it was one of the best financial decisions I have made. We depend on it for all expenses, big or small, and we use it as our bible for money leaving the company.

Amex helps us easily track what and where we’re spending, so I have the insights I need to assess how we can run the business more efficiently.

Q: How do you manage cash flow?

Laura: Cash flow is always top of mind. Trying to run a business without managing cash flow is like trying to paddle a boat without an oar.

We pay close attention to the speed at which clients pay, we maintain a strong collections team for outstanding amounts and we prioritize keeping our books accurate and up to date. We also hold a cash reserve, which gives us piece of mind and acts as a cushion to manage unexpected events. It gives us the confidence and finances we need to grow Blue Door.

Q: What made you choose Amex?

Laura: My dad was an avid American Express Corporate Cardholder and used it to start his company in the ‘80s. He always had his American Express Card with him everywhere he went, and always said it was the best card. Now that I started my own company (and since he's one of my investors), he was insistent—‘You need to have an Amex Card!’

All our expenses go through Amex, and we use the Membership Rewards® points we earn for things like gift cards for our employees. We use the Business Platinum® Card because it has great travel benefits designed for frequent business travelers like myself. We also use the Amex Cobalt™ Card because we work with restaurants and can earn 5x the points when visiting our clients, as well as 2x the points1 on transit when traveling around the city.

We went from having a tough time getting the right financing solution to not having to worry that a payment won't go through on our credit or charge cards. I feel like Amex saw our potential and that I have the ability to grow with Amex.

Learn how American Express solutions can also help your business today.

1. You can earn Membership Rewards points for eligible consumer purchases at American Express retail merchants as follows: 5 points for every $1 at or for (i) restaurant, quick service restaurant, coffee shop and drinking establishments in Canada, (ii) stand-alone grocery stores in Canada, (iii) delivery of food and groceries in Canada as a primary business up to a maximum of $30,000 in net purchases posted to your account annually based on Cardmembership anniversary date. 1 point for every $1 in eligible purchases thereafter. Calculation resets to zero each year on the Cardmembership anniversary date; 2 points for every $1 at or for (i) stand-alone automobile gasoline stations in Canada, (ii) travel services or travel bookings including air, water, rail and road transport, lodging and tour operator sales, (iii) local commuter transportation in Canada including subway, streetcar, taxi, limousine and ride sharing services. Purchases at merchants where these categories are not their primary business such as general merchandise retailers do not qualify. Merchants are typically assigned codes and categorized based on what they sell. Earn rate of 1 point for every $1 applies when the merchant code is not in an eligible category using a payment account or service of a third party, a card reader attached to a mobile phone or online retailer that sells goods of other merchants or the merchant category is otherwise not identified.

TM, ®: Used by Amex Bank of Canada under license from American Express.