Tag Archives: Site

How Do You Scale Up a Product That Is Taking off! Four Points

2 Replies

Situation: Demand for a product produced by a company has increased dramatically. The CEO realizes that they need to scale up production quickly to meet this unexpected demand. The company is small and the CEO wants advice as to how his company can accomplish this without killing the product. How do you scale up a product that is taking off?
Advice from the CEOs:
• This represents a major change of both mentality and culture. Essentially, the company needs to move from a “handmade” process to a commodity volume process. This may also mean moving from low volume/high margin production to high volume/lower margin production. This shift will significantly change the company.
• If there is high confidence that the company will land a contract for long-term production consider establishing high volume production at a new site. Rent or lease another facility. Alongside this hire a set of experienced people who understand the challenges of scaling up rapidly. Consider giving this facility a new name to suit the new team. This will help to establish a new culture suitable to the new opportunity.
• While negotiating a lease, ask for an option for additional space to be included in the lease. If things don’t pan out, look at this new space as the eventual location for your existing team.
• Two other options to consider: (1) Outsourcing to a 3rd party manufacturer. This is an option unless the company is an OEM outsourced producer itself. However, be careful – you could be telling your customer that they could go directly to your OEM source at a lower price. (2) Establishing an overseas production capability – one where you own the facility and manage quality control. This will be a challenge if the customer wants to specify “Made in US”, or where quality concerns are essential.

[like]

How Do You Find and Train Staff for Satellite Offices? Five Points

Situation: A company plans to grow from a single site to additional distant sites. The CEO has two concerns: how to bring in the new people, and how to preserve the culture that they have developed as they build new sites. How do you find and train staff for satellite offices?

Advice from the CEOs:

  • First, how does the company currently identify customer targets?
    • Typically the company targets specific personnel within a potential client who will be decision makers or influencers on the company’s projects. Market developers then build relationships with these individuals.
  • Points of focus in selecting employees in other geographic areas.
    • What will be the office configuration? Likely 3-4 individuals, including an engineer, office manager and project manager.
    • Promote the company as the preferred place to work in the new locations. Offer signing bonuses for employees who identify and bring in new people, as well as for the new employees.
  • Does the company anticipate that maintaining company culture will be a challenge as the company expands? Yes.
    • Train new employees in the home office for one month to help them understand the culture. Immerse them in a project so that they experience the work ethic.
    • Have current personnel serve short term stints in the new offices. This will help to build consistency of service and delivery between the offices.
  • What is the best way to recover from a service challenge?
    • Occasionally we all make mistakes. Don’t miss the opportunity that “service recovery” presents to strengthen relationships with clients.
    • A competent and timely response to a problem situation can create an indelible impression on the client.
  • What else can the company do to improve its marketing?
    • Assure that there is an existing cost calculator in each remote site. This speeds response without having to wait for decisions from the main office.
    • Install a traffic plug-in on the webpage for each remote site and feature this on the site webpage. This allows current and potential customers to schedule their visits to their convenience.

[like]

 

How Do You Position a Company for Value and Growth? Six Points

Situation: A CEO wants to set up her company for long-term growth in value. The business has favorable margins relative to competitors and high cash flow. It is currently single-site but has a good model that could be expanded to multiple sites. How do you position a company for value and growth?

Advice from the CEOs:

  • Paint a picture of growth and cash flow. Use this picture to inspire both the home site and remote sites as they are developed.
  • Develop and demonstrate a Growth Model. It is important to demonstrate the success of the model so that it can be replicated in remote locations.
  • Get multiple sites up and running as proof of a profitable growth model.
  • As the company moves to a multi-site model, assure that each site manager has a financial interest in the success of the site. Develop a compensation system that rewards the manager for both growth and profitability. Develop a complimentary system that rewards key site personnel.
  • Develop additional products and accompanying services. These can be sold to current customers as well as new customers at the home and remote sites to boost growth.
  • As the model grows use the improved cash flow to buy other companies that are complimentary or expand the capacity of the existing company.

[like]

How Do You Finance Site Expansion? Three Recommendations

Situation: A company wants to expand to new sites. It’s business model relies on high levels of customer service, with high customer retention and efficiency. The challenge is that the model is low margin, because only a few employees are billable. How do you finance site expansion?

Advice from the CEOs:

  • To evaluate profitability and start-up time create a low-cost prototype site to test the model and collect data.
    • Develop a template with a high likelihood of survival over the first 6-12 months when investment will outweigh income.
    • Consider a SWAT resource team to accelerate early success for new sites.
  • Key areas of focus:
    • Understand the value of the business. For example, is it:
      • Improving client operational efficiency?
      • Building the team?
      • Response time to client needs?
    • From experience define the most important variables for success:
      • What is front office, what is back office?
      • How important are the dynamics between key people? Is it better to hire key people as the number of sites expands or grow them internally.
      • Determine what is being sold, with a reasonable prospect of return – methodology or services?
  • Consider a franchise model. The model must show a reasonable return to the prospective owner, including the cost of franchise purchase and start-up costs.
    • As franchisor, it is important to know what this model looks like to a prospective franchisee; however, take care not to create a representation to which would be bind the franchisor as a promise.
    • A successful franchise should have a branded presence.
    • Offer potential franchisees a guarantee: if after one year the net costs to establish and maintain the site are below a certain level, the franchisor will credit the difference between their estimate and the actual net costs in Year 2.
    • MacDonald’s does not allow franchisees to choose store locations. Similarly, the franchisor can choose locations, determine the availability of key talent, select anchor clients, and develop a reasonable estimate of the value of a new franchise before selling it. This increase the value for the franchise sale and creates a more predictable ROI for new franchisees.

[like]

How Do You Compete Against Free Software? Six Tactics

Situation: A boutique software company with superior expertise in their market competes against a large corporation that provides similar software for “free.” The competitor sells systems with their software pre-installed; however, these systems are known to work better with the boutique company’s software. How do you compete against free software?

Advice from the CEOs:

  • Create an alternate message that rings consistently through your advertising, speaking, and media. The core of this message is that if you want a successful experience with the competitor’s installation, the only clear choice is your software. Feature data from your case studies showing improvements in performance, savings of time and resources, etc.
  • Your best target is customers who are in the proof of concept stage. Here they are learning about the system and dealing with the early challenges with the software installed by the competitor. They not only have to pay for the system, but they must pay for installation services. If you can demonstrate both cost savings and smoother operation they will be open to your pitch.
  • Keep a list of the competitor’s trial sites and approach them three months after they try the pre-installed software. Have case studies in hand that demonstrate the clear superiority of your software. At this point they will have experienced enough during the trial that they will be open to your sales message.
  • Focus on the regional rales organizations of your competitor – the people who sell the competitor’s equipment. The RSOs are driven purely by sales performance. Show them that it is easier to sell their systems, and that trials go more smoothly when they recommend your software as part of the sale.
    • Your message: with our software your trial installations go more smoothly; without our software, the entire system sale is at risk.
  • Continue to refine your search engine optimization so that you appear in the first five hits when anybody asks about the competitor’s systems or software.
  • Find an independent Blogger who cares and wants to spread the message that your software is the only way to go with the competitor’s system. Continually feed this blogger with fresh material from your field sales experience.

[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

How Do You Boost Your Internet Marketing? Six Guidelines

Situation: A company wants to boost their marketing through the Internet. They have had a web site for years, but the site doesn’t bring in much new business. How do you optimize visibility for your web site, and how do you boost your Internet marketing?

Advice from the CEOs:

  • Among search engines, despite Microsoft’s efforts to boost Bing’s presence, Google is the elephant in the room. They host 65% of search engine traffic, and represent 75% of buying activity. Google writes the rules, others copy.
  • As an exercise to test your web presence, go to Google and search for your company and city. See whether you appear in the local directory. If not, have your web master put your address and phone number on each page of your web site. If you can’t find yourself or easily find your contact information, others won’t be able to find you either.
  • Use the Google External Keyword tool – just search and you’ll find it. This will help you to tailor your key words so that potential customers will find you. Another tool is wordtracker.com. Both will show you domestic and international hit rates over the last month on different key words.
  • What is the optimal number of words per web page? About 250. Put your key words in your titles, in the first sentence and the last sentence of the first paragraph.
  • The typical web user will form a lasting impression of your web site in the first 3 seconds. Can they find information easily? Is the layout pleasant? Is it informative? Does it have the information that they’re looking for?
  • Hitting high on Google searches counts. Only 20% of viewers will go to Page 2 of a search, and most only go 5 hits deep on Page 1.
  • Stay fresh. Change SOMETHING about your site at least monthly.
  • Thanks to Kevin Dean of WSI NetAdvantage for his contribution to this discussion.

[like]

How Do You Respond to a New Competitor? Six Options

Situation: A company performs service that is primarily locally-based.  A competitor is establishing a new site less than two miles from the company’s location, offers a broader array of services and is larger than the company. How can the company protect its business by responding to this new competition?

Advice from the CEOs:

  • Your most important asset is understanding what you are doing right, and what is most important to your customers.  Remember that business is more than just a product or service. It’s a relationship. Your customers depend upon your for more than just what you offer for sale. Reach out to your customers for these answers. Make sure that you respond to their needs. As a benefit you may also find new growth opportunities.
  • Ask current customers whether you need to expand your service offering, or whether your current offering and lead time is acceptable to them. Ask how their needs are changing and how you can better serve them.
  • Reestablish the connection to your customer and listen. Preempt new competition by contacting your customer base before the competitor gains a stronghold.
  • Study your options and avoid knee-jerk reactions.  You may be in better shape that you think.
  • Major retailers and service companies have moved into many locations. Local businesses who survive their presence do so because they are focused on their customers’ needs and are better at serving the customers that the big companies are.
  • Invest in key components of your business relationships:  services, payment terms, responsiveness, your facilities, and so forth.

[like]

How Many Web Sites Should One Company Have? Three Thoughts

Situation: A company has two businesses in different locations serving different sets of customers in two separate markets. The CEO is evaluating whether it makes more sense to have one umbrella web site with pages for each of the two businesses, or to create two complete web sites with different URLs. How many web sites should a small business have, and why?

Advice from the CEOs:

  • The first question is whether you call both businesses the same or different names. Many small companies have separate businesses at different sites, and just differentiate the businesses through division names. Moreover, because you use the same company name for both businesses, you want to make it easy for customers to find your web sites. This argues for at least a single splash page, listed under your current company URL.
  • There are many corporations with diverse, unrelated businesses. Generally, these corporations don’t have any problem having a general web site, with separate links to the individual division web sites where customers and partners can drill down to detail specific to each division. The advantage to this strategy is that by having one corporate site, the larger entity strengthens its own market presence.
  • Given that the advice of the group is to have a single splash page how do you construct it?
    • You want to prominently feature your company name on the splash page, but not to include much detail. Maybe just an overall positioning message that expresses your core values or a distinctive visual that shows what you do.
    • On the splash page, create two links with distinctive pictures and names that enable your customer to easily go to the side of your business that interests them.

[like]