Today is one of the most difficult days for us at Promotehour.
We are announcing a freeze on all the refunds. For the next 60-days we won’t be able to process any refund - pending or upcoming.
Instead, we will be working with affected clients and offer them a way to utilise the amount, equivalent of refund amount, in PR activities in year 2023:
- Press release writing
- Press release distribution
- Media database access
We understand that some of the clients will not be happy with this decision but we have run out of options.
It has pretty much come down two options for us:
1. Take the above mentioned step and turnaround the company
2. Declare bankruptcy.
We picked the former.
We had been trying very hard to avoid this situation for the last 2 months but the current slowdown and extreme lack of demand forced us to take this call.
What Really Happened:
We are a bootstrapped company. We run the business with a 1-2 months of runaway, just like most other bootstrapped service businesses.
2021 was a great year for Promotehour - we grew 100% and generated decent profit.
We were bullish on 2022, so much that we wanted to grow 400-500%. So we hired aggressively, invested our savings from 2021 and sacrificed profits for growth.
First half of 2022 was all about investing in growth but we didn’t see the anticipated growth.
In fact, in June we started seeing a dip in the revenue which only worsened in subsequent months.
July and August were particularly bad.
By September, we started cutting costs but it was too late.
By October, we had exhausted all our runway to honor wages and refunds.
This hunger for growth also meant we made some lofty promises to win contracts. Started serving clients from different industries which only ballooned our employee costs. And we failed to fulfil some of the contracts which resulted in refund requests.
We are caught in a double whammy.
Where are we now
- We have reduced our costs by 80% - so we can go back to profitability in 2023 and honour our obligations toward clients in 2023.
- We are also narrowing down our focus to consumer electronics to offer PR service. This way we can deliver better ROI an stay profitable at the same time.
Being a discretionary service doesn’t really help when you are in a recession and trying to ensure consistent sales.
So we request all of our affected client not to loose faith in us and be patient.
We will be reaching out to each one individually.