In 2010, 24 Hour Check Cashing was an eleven-year-old check cashing service with declining revenue and profit, due in part, to fewer employers issuing payroll checks to their employees, opting instead to use pay cards or requiring direct deposit into a bank checking account. Payroll checks were our bread and butter, and unfortunately, they were declining to the point that our company would soon become marginally profitable, or forced to close our doors.

Fortunately, we were referred to Rudy Waldner, who agreed to help us transform our business.  We reviewed every aspect including our facility, people, management, marketing, products, and technology. As we soon discovered, the declining number of payroll checks to cash wasn’t our only issue.

We started with our “place” by rearranging and color coding different stations in our lobby to improve the customer flow. We adopted the mantra “cleanliness equals credibility” by systematically cleaning the floor, counters, windows, and doors at the beginning of each shift. We piped in music from Pandora, added air freshener, installed a digital menu board to promote all of our products including loans (which became our predominant revenue source over the coming years), as well as adding a privacy partition at the loan application window. Our lobby is pleasant, more efficient, and has a really great vibe since making these simple and inexpensive changes.

My biggest concern was finding a new product that we could introduce to bring in more revenue. We had a very modest payday loan business, which was generating $1,500 a month in revenue. Rudy suggested we leverage this business into a significant revenue stream by improving our marketing, signage, communication (scripts), application process, and underwriting. This became a $200,000 product line for us in two years. Subsequently, we added two additional loan products that contribute an additional $135,000 in revenue by utilizing the same marketing and processes Rudy helped us develop and refine for the payday loan product.

Our marketing started with updated signage that emphasized the loan product and our telephone number. We launched a “Refer a Friend” program to find new loan customers, which is very cost effective since we only incur an expense when we add a new customer. Satisfied customers refer their friends and family on a regular basis. We added a Google Places page, which began to increase our local search results for our key products. A comprehensive website with an online loan application was developed to streamline the process for new customers, which in turn, frees up the lobby for returning customers who are able to conduct their business without delay. The website was designed to optimize six critical search terms related to our increasingly loan-oriented business, resulting in 300 to 600 organic online loan applications per month.

We embraced technology by utilizing state of the art loan management software, debit card payment processing and text messaging.  These investments allowed us to easily manage a growing loan portfolio, expand our universe of potential customers, provide customers with more convenient payment options and communicate in a more discreet manner.

Last, but not least, Rudy conducted a management workshop that really opened my eyes. Everything else we were doing wouldn’t have the desired effect unless we had the right team and the right culture. As difficult as it was, I knew we had to make personnel changes and say goodbye to some long-term, loyal employees. As this process took place over time, the new hires didn’t always work out. But I was determined to get it right. We ended up hiring nine and terminating ten employees over three years. Throughout the process, we provided the staff with continuous reinforcement of our values, how we do business, and why. Over time, we were able to change the culture.

At the same time, we also had to address our hours of operation. For eleven years, we were one of only two 24/7 check cashing services in our market. This was one of Rudy’s very first observations. I resisted the idea of shortening our hours of operation because I knew we would lose check cashing business to our competitors. As hard as it was, I had to realize that we were transitioning from a check cashing service to more of a diversified financial services business, and that compressing our hours of operation would provide many benefits, despite losing some check cashing fees. We now operate nine hours daily, Monday through Saturday.

Compressing our hours of operation allowed us to reduce staff from 6 FTE to 2 FTE and 3 PT employees, saving $90,000 in annual compensation expense. However, the two key full-time employees have increased their compensation by 45%, and they now view their positions more as careers and less like jobs. Our current staff has 19 years of combined service. 

Customers prefer working with a stable, friendly staff. We can now have two to four employees on hand at any time so that online requests, telephone calls, and lobby traffic can all be handled simultaneously and promptly.

We were correct five years ago that check cashing revenues were poised fall. They have in fact dropped by $175,000. The good news is that we have added $340,000 in loan revenue and our overhead is $40,000 less than five years ago. Most importantly, the customers and staff are happy, and the owner doesn’t have to be present for the business to run smoothly. Disaster averted. Thanks, Rudy!

Dave Burns

Waldo Financial