Tag Archives: Expand

How Do You Implement Your Vision for the Future? Seven Points

Situation: A CEO has a clear vision for the future of her company and what she wants to build. Her ambition is to revolutionize her industry. What are the most important things that she should to make her vision a reality? How do you implement your vision for the future?

Advice from the CEOs:

  • It is critical to take charge of the vision for the company and to see that the company has or hires the right people to implement the vision.
  • As CEO, remove yourself from the day to day.
    • Hire a Director of Operations ASAP.
    • With the right experienced Director of Operations, the infrastructure to support the program will fall into place. This individual will help to assure that this happens because he/she will be incentivized and motivated to perform.
  • Concentrate the focus for the next 4-6 months to scale the present operation to the point where the model can be “franchised.” Consider expanding the model through sites with managers who have an ownership interest.
  • An important initial step is rounding out the training process.
  • The greatest value of the present site is to serve as a demonstration site to show potential customers how installation of the technology in their operation would work. With this in mind, build a working demonstration model on the present site to the dimensions and scale that customers would see on their sites.
  • To shorten the lengthy sales cycle, create and sell a feasibility study for the technology. Agreement to a feasibility study represents commitment from the prospect and conducting the study will create buy-in on the part of the customer.
  • As the new technology is launched, CEO time will be spent away from the initial site. Prove that the site can run in the CEO’s absence before leaving for extended periods of time.

[like]

What are the Key Points to Make in an Investor Presentation? Three Views

Situation: A CEO wants to raise money to expand the company. Target investors will be private equity investors with a minimum investment threshold of $10 million. What are the key points to make in an investor presentation?

Advice from the CEOs:

  • To demonstrate the company valuation, and the potential increase in value to investors, calculate the EBITDA trend for the last 3-4 years and project it out for the next 5 years.
    • The valuation is the whole company – not just the investment piece.
    • Show the increase in exit valuation with and without the target investment. Show impact.
    • Show revenue and EBITDA on the company’s current trend and what this will become with the investment.
  • An alternate view: Don’t focus on valuation. The company is profitable and growing. Pitch the plan and the financials associated with the plan. Let the potential investor come back with an investment proposal and terms. KISS – Keep It Simple Silly – take all the risk out.
  • There are periodic Shake the Money Tree events in Silicon Valley, sponsored by SVASE – Silicon Valley Association of Startup Entrepreneurs. Start attending these.
    • Ask for advice – not money. There is an adage in Silicon Valley is that if you ask for money you get advice; whereas if you ask for advice you get money.
    • There’s a subtle difference between the two asks. The point is that potential investors don’t just want to invest money. They want to be involved in the decisions as to how the company spends that money. By asking for advice, a potential investee demonstrates that they respect the opinions and input of potential investors and will listen to them.

[like]

How Do You Productize an Offer? Four Recommendations

Situation: The CEO of a new company is struggling to generate sales momentum. Part of the issue is adequately productizing their current offer. A second issue is building a good sales team and sales momentum within the team. How do you productize an offer?

Advice from the CEOs:

  • The issue may be that the company is regarding its product and the sales process too narrowly. Look at the sales process in new and different way.
    • Role play the current sales-to-close process. Have salespeople document what they do. Look for a product concept that appears from this exercise.
  • Try different models to determine what works best at the company’s current stage of growth.
    • Position the company’s ability to deliver outcomes. Make it risk free if nothing is produced. “Here’s our package – it costs nothing if we don’t produce results as promised.”
    • Consider specializing in services that enhance other companies’ sales – a need that is always present.
    • Look at the car dealership model – lower level salespeople qualify prospects and bring the qualified prospects to more experienced colleagues for the close.
  • How is the company currently positioned – as a generalist or a specialist? Potential clients more often look for a specialist to help them solve specific needs.
    • Conduct local surveys to help define prospects’ and clients’ top needs.
    • Start developing and advertising specialty areas. Add to the list of specialties as the company expands.
  • To build the sales team look at younger salespeople currently with competitors. If these individuals have been recruited right out of school, they will often look for other opportunities after a year or two.
    • Target good salespeople who are currently employed. Tell them that the company is interested in getting to know their business and look for salespeople who are good at selling themselves as well as their offering.

[like]

How Do You Transition from Boss to CEO? Three Insights

Situation: The head of a small service company wants to become more strategic – more like a CEO. Ideally, he wants to create a small samurai team to help him expand.  He prefers working with a range of clients to develop creative, out of the box solutions. How do you transition from boss to CEO?

Advice from the CEOs:

  • The eMyth Revisited by Michael Gerber is a valuable primer on how to bring in more clients and revenue. The critical question that this book helps to answer is “what do I want to build?”
    • The book walks you through the critical questions that will help to answer whether your true ambition is to be a Picasso with helpers or a company. The answer may be either, but how you build each is different.
  • The more that skills can tied to a tangible outcome the easier it is for clients to hire a company. Quantify past successes. Make it easy to justify hiring your team.
  • To add to your pipeline:
    • Help friends help you. Make it easy for them to refer you. This can be simple: YouTube videos or improving the company website to highlight past successes.
    • The company web site can’t be just OK – it must be the all-important credibility builder that the company needs. Recreate the site to wow the visitor and tell the company’s story. Make it fun and compelling.
    • Participate in groups or forums that your targets attend. Create presentations, webinars, etc. Establish the company as an expert with the answer and as a trusted resource.
    • Also present to professional organizations to establish expertise and credibility.
    • Testimonials are powerful – particularly if backed by metrics.
    • Collaborate with people with similar depth of experience who can help develop the pipeline. Offer them a cut of total job revenue.

[like]

How Do You Expand Your Market-Base? Six Suggestions

Situation: The CEO of a service company needs to expand its market base due to concerns that a significant service and referrals partner may decide to stop working with them. A break-up would have significant impact on salaries, effort and focus. The company’s priority is to expand client growth to minimize the impact of a break-up. How do you expand your market base?

Advice from the CEOs:

  • To expand or build a market requires a champion. Someone like the company’s founder who has the passion and contacts to build new business.
  • Second, incentives must be established to reward success bringing in new clients. These incentives must have teeth – no success, no incentive. No safety valves.
  • Third, create a plan to support the new business development – including marketing, event attendance, etc.
  • Initially, be selective and target just a few highly desirable new clients to test and refine the client attraction model before expanding to the broader potential client audience.
    • Build a set of case studies of services and results for new clients.
    • Track and prove out the profitability and workability of this model.
  • How should the effort to expand the market base be constructed?
    • Start with preparation. Research the current prospect list to assure that they are good prospects. Also look at the current company culture – do the company’s strengths align with what is needed to attract and serve new clients?
    • If the research shows that a significant number of prospects are different from current clients, think of this as a new channel. Create a different business unit to specialize in serving these clients. Hire a team to focus exclusively on the new client group, with proper incentives tied to achievement with these prospects.
  • Another company had a similar choice. They created a program to increase their market base and went after it with full focus. It took five years to accomplish vs. the two years that they had planned. Nevertheless, the results have been worth the effort and expense. If the company believes in the model, invest in it.

[like]

Which Is More Important – Long or Short Term? Five Points

Situation: A CEO is concerned about long term trends versus short term volatility. While the business has done well over time, short term volatility has made it difficult to project both personnel needs and cost. As the company expands geographically these issues are becoming more critical. Which is more important – long or short term?

Advice from the CEOs:

  • Does the company find that capabilities are not fully understood until they get into development? In this case, is the problem with variables of schedule, budget or capability more important?
    • Going forward, evaluate each of these variables to determine which is having the greatest effect, positive and negative, on project performance and profitability.
    • If the problem is time constraints in the project planning phase, assure that sufficient time for project iterations is allowed in both the schedule and budget. It may be that the clients are not sure of what they want until they see a model, and that several iterations are required to assure that clients’ needs are satisfied. Plan and bid for this.
  • If fixed costs impact margins during dips between active projects, assure that enough fixed cost coverage is built into project bids to cover dips.
  • For geographically remote offices is the company’s issue a question of volume or resource cost or is it a pricing issue?
    • If it’s a pricing issue to stay market competitive focus initial activity where this issue is minimized. As market presence expands, add additional capabilities in phases according to the ability to cover costs profitably.
    • If it’s a resource cost issue use the same solution, adding resources according ability to cover costs profitably.
  • Build the company’s sales and marketing structure in phases while expanding into new markets. If sales compensation is base plus commission, vary commissions paid according to resource rates negotiated. This will tie sales incentives to negotiated resource rates and will help to assure that costs are covered.
  • Dealing with short term issues effectively will improve long term planning and profitability.

[like]

How Do You Identify Key Managers? Three Suggestions

Situation: A software service company wants to expand operations. Their business model is to build clone offices that operate like the home office in new markets, much like a franchise operation. The founder CEO is struggling to identify key managers who can manage remote offices. How do you identify key managers?

Advice from the CEOs:

  • The key managers must be individuals who are business savvy, not talented engineers. The key managers must understand:
    • Management – with a proven management record;
    • Basic accounting;
    • Recruiting and hiring;
    • How to manage an office;
    • A bonus will be experience in a similar field, but this experience does not substitute for the above four critical requirements.
  • Looking at current employees, is there the bandwidth within the current team to help bootstrap new remote offices?
    • For example, is there a key senior manager who can become Director of Franchise Operations? In this role, the DFO will serve as a resource to the individuals opening new offices.
    • As this individual’s focus switches, an important question will be who replaces this individual in their current role?
  • It will be beneficial if the individuals who are chosen to lead new offices have at least some experience in sales. This will help to quickly build new customer bases for the remote sites. However, a new site manager must have balanced experience. While sales will be part of the responsibility these individuals must also be able to build and oversee the other critical functions necessary to build viable remote sites.

[like]

How Do You Balance Core and New Businesses? Five Guidelines

Situation: A company has built a solid core business and wants to expand its product portfolio by adding new business. Core functions can serve both existing and new business, reducing overhead on individual businesses. What pitfalls must the company avoid? How do you balance core and new businesses?

Advice from the CEOs:

  • New business activity cannot impact core business. The core business is the company’s bread and butter. It is important to make this clear to both employees and clients and to structure the handling of new business opportunities accordingly.
  • From a staffing standpoint, new business opportunities cannot impact marketing, service and operations staff supporting the core business. New business development activity and operations cannot result in a pull from their focus on the core business. This separation may be facilitated by placing the staff supporting new business in separate facilities, or in an area separate from the staff supporting core business.
  • In the case of support functions that will serve both existing and new business, recruit and hire staff to support the new business to assure that both existing and new business receive proper support.
  • Hire a new person, one with experience and contacts, to develop the new business opportunities. Look for a sales person who can bring in significant new business. This will pay for the individual quickly.
  • How does leadership communicate these changes to staff?
    • Meet with key managers to identify potential concerns. These may include impact on company culture and client focus. Use the responses gathered to develop a communication plan to allay employee concerns.
    • As new business opportunities are added, it will be necessary to bring in new, experienced personnel. Previously, the company brought in experienced personnel to build the current business. Be open and up-front about this and explain that as the company grows there will be new opportunities for existing employees.
    • The company’s objective is to improve the quality of the organization and to raise the boat for all. Current owners and managers will automatically benefit from the efforts of new people to expand the business.
    • Building new business opportunities as separate businesses diversifies the company and reduces the risk of overdependence on existing clients and key vendor relationships. This enhances the job security of current employees.

[like]

How Do You Prepare for an Acquisition? Six Suggestions

Situation: A company is purchasing another company to expand its product offering. The CEO is concerned that the employees need to stay focused through the closing date. He is also concerned about retaining key employees both of his company and the company that he is buying. How do you prepare for an acquisition?

Advice from the CEOs:

  • Until the deal closes, don’t change anything about your current direction.
  • As you negotiate and move to close, be mindful of competitive bids.
    • This will help to keep the deal in place.
    • It may also open the option to put together the deal and then seek competitive bids to fund the deal through private equity groups.
  • Get three second opinions – learn what could go wrong with this deal so that you can plan and anticipate.
  • To assure that you retain key staff take the following steps:
    • Hire consultants: HR, financial, see what they recommend.
    • Offer key employers favorably priced options for a combined minority position in the company. This offers them an upside and will be an effective retention package.
  • What else can be done to retain key employees.
    • Let them know how this acquisition will position the company as the Dream Team company in your space.
    • Explain how this acquisition gets the company closer to a true exit strategy which will be financially beneficial to them.
  • If you can assure key employees that they will not experience any change in their job, title, responsibilities or compensation, retention may not be an issue.

[like]

How Do You Plan for Business Expansion? Five Factors

Situation: A company has built a very successful single site business, and wants to expand geographically. They are investigating where it makes sense to duplicate operations in new sites and where it makes sense to consolidate operations. The company’s secret sauce is in their system and procedures. How do you plan for business expansion?

Advice from the CEOs:

  • Look at the shared services piece and the cost/benefit tradeoffs. What services are best centralized, and what are the critical on-site services that you want duplicate in remote sites?
  • Other companies use remote offices for field personnel, but centralize all shared services. Centralized shared services include invoicing and collections, financial reporting, telemarketing, anything dealing with trade names and print or trade-marked collateral, and an array of other services which would be too expensive for individual sites to duplicate, or where leaving things to the individual sites might result in inconsistency of service and erosion of the brand.
  • How do you replicate key talent? Consider whether key talent can be retained in the shared services side of the business, not the cloneable service delivery sites. Typical franchise operations have people who are difficult to replace or replicate so most do not try to include these roles in the service delivery operations.
  • You will need to provide for a sales role in your remote offices as business development will be critical to early success of new sites.
  • In the transition from “successful small” to “successful large” most businesses find that the medium stage is the most difficult. Issues to consider include:
    • Does your direction match your expertise – do you have support of individuals knowledgeable about franchising?
    • What are the margin differentials within the business? Do you want to clone the high or low-margin areas of the business? Develop profitability models for your central and remote sites, and assure that the sites will have sufficient profitability to assure their short-term success. This will make it easier to proliferate the remote sites.

[like