ITB Partners – Management Consultants
Our Business is Your Success
“The No Excuses Guide to Selling Yourself & Achieving your Goals.”
Tue, September 10, 2019
7:30 AM – 9:30 AM EDT
Refunds up to 1 day before the event
Eventbrite’s fee is nonrefundable.
It was my kind of week! I was busy, but I enjoyed a lot of variety and entertainment. I had a productive meeting with one of my consultants, Paul, over cigars and brews; a conference call with my Latin America Managing Director; coffee meetings with two prospective new consultants; and a luncheon meeting with a potential client. I even had time to complete a few administrative tasks and worked on strategic issues. My visit with Paul took an unexpected turn (it became even better) when Jeff, an alumni buddy joined us at the bar. What a lucky break! I couldn’t have been happier to see him. Jeff is a master licensee developing a non-food franchise concept in the state of Florida. He is an excellent connection for Paul, given that Paul is selling an integrated project management software package for franchisers. It was great to catch up with Jeff, and even better because Paul was able to make an excellent new connection. Connecting great people is my favorite part of work.
The highlight of the week was meeting with my turnaround client to discuss the next phase of our work. The first item of discussion was her update on the remaining contract in Florida. She told me she had successfully ended that contract and helped her employees land jobs with the new contractor. She said that she secured the equipment and supplies at a Lakeland, Florida-based storage facility. She went on to say that she plans to move this equipment to Atlanta when she finds an appropriate local storage facility. This last point gave us an excellent opportunity to talk about coordinating Strategy with operations. I reminded her that the equipment left in Florida was purchased to support her employees. And, she has no further need for that equipment as she will be using subcontractors going forward. I applauded her for successfully extricating herself from her expiring contract. However, I advised her not to spend anything further on that equipment except as required for its sale. She took my recommendation to heart and will work with her attorney to ensure compliance with the bankruptcy court to dispose of that equipment. Resolving that issue, we moved on.
The first phase of this assignment resulted in clarification around my client’s business strategy going forward. Now, the client will use subcontractors to execute her contracts, to minimize her reliance on full-time equivalents. Making this change will increase margins, reduce risk, and result in the more effective use of her time. The client also agreed to move away from the public sector (State and Local Government Accounts) to focus on the private sector, both business-to-business and the consumer market. The next phase of my work is to rebuild the client’s business development function. This change in strategy requires an updated positioning statement and value proposition, key tools for generating new business. My responsibility is to help her grow the business through new channels, promoting existing products and services.
During our meeting, we discussed the importance of leveraging our efforts to ensure that we are generating the maximum benefit for the time allotted to that effort. We discussed following the Pareto Principle to guide our work. In other words, to concentrate on the 20% of the activity that generates 80% of the output. To transition out of Chapter 11, one cannot waste their time. My client must ensure that she is getting the maximum payback from her work.
One of the most significant benefits provided by outside consultants is to use us as sounding boards to work through issues big and small. As we have vast experience in various situations, we help our clients make sound decisions in real-time. For questions requiring further consideration, we understand the analysis needed to find the answers. The most important benefit we pass along may be our knowledge of the fundamental principles for setting priorities and managing time.
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ITB PARTNERS
If you’ve dismissed franchise ownership because you don’t want to flip burgers or make sandwiches, you’re missing out on a vast world of opportunities.
Yes, the number of franchises in quick-service restaurants continues to grow, but these are by far not the only successful option. According to FRANdata, an independent research company for the franchising sector, there are more than 230 different industries represented in franchising; and, additionally, 200 new brands enter the market each year.
You may think most of these businesses are run by small independent owners or large corporations. Not true. Let’s take a closer look at 10 out-of-the-box categories crushing it in franchising.
1. Coworking Spaces
Responding to the increasing trends toward shared services, remote working, and short-term fractional work, more small businesses, and larger companies are opting for co-working environments over traditional brick and mortar leases. Can you say, “recurring revenue?”
2. Yoga and Dance
The boutique fitness industry is exploding and now yoga and fitness dance concepts are making their mark. Drivers include the demand for fun fitness activities in a community setting coupled with the high costs of healthcare.
3. IT Services
From cyber-security to strategic growth initiatives, managing your company’s IT services can be a huge headache. Outsourcing overseas often provides lackluster service. Businesses want trusted, local expertise they can count on for the long-term.
4. Drug Testing
It’s hard to imagine a private or public-sector employer without a substance abuse policy. The demand for reliable, fast, accessible testing options is intensifying.
5. Swim Lessons
When I was a kid, my parents taught me how to swim by tossing me in the neighborhood pool. Times have changed and parents are demanding more effective and healthier methods. Not just about learning to swim, the franchises in this category are addressing a safety need in underserved communities.
6. Nail Salons
Perhaps the best example of an industry once dominated by small, independent shops is nail care. The demand for more sophisticated, experienced-based nail care is driving growth. Franchising has nailed this industry with clinically clean, semi-absentee, multi-unit opportunities.
7. Retail Resale
We’re not talking consignment shops. Franchising is transforming the resale market by offering gently used specialty items at affordable prices. The sweet spot of this niche lies between expensive retail stores and low-quality, second-hand thrift.
8. Music Instruction/Enrichment
Music is more accessible than ever; yet, traditional schools are still reducing fine arts programs, thus, driving the demand for quality music instruction and enrichment. Gone are the days of the old-lady, piano teacher. Franchising has turned up the volume on music instruction, making it fun and cool to learn.
9. Tree Removal and Care
In my neck of the woods, trees are everywhere. Care and removal of trees is no longer a business for “Chuck in a Truck” (with a chainsaw) in this $17-billion industry. This is a classic example of franchising bringing professionalism and systematization to a fragmented, high-demand service…and reaping the rewards.
10. Digital Marketing Consulting
The majority of businesses in America are small businesses with a small marketing staff and even smaller marketing budgets. It’s no wonder B2B franchise models exist across the globe to assist businesses with their online marketing strategy and execution.
Because there is such an abundance of profitable franchise ownership opportunities that exist outside of fast food, me and 14 of my friends got together to dispel that myth in the Amazon bestselling book, More Than Just French Fries.
You too can grow a profitable business through the franchise model and it doesn’t have to cost a fortune or take up all your time. Semi-passive business ownership is accelerating as families look to side-gig options for a more secure future. I recommend that anyone exploring franchise ownership keep an open mind and consider a variety of different businesses in different industries, even the ones that surprise you.
Leslie Kuban is a nationally recognized franchise industry expert, CFE (Certified Franchise Executive) and Market President of FranNet in Atlanta; a locally owned and operated franchise consulting firm. Leslie and her team have helped close to 500 individuals and families achieve their dreams of business ownership through a no-cost, extensive educational and coaching process.
Connect with Leslie online or call 770-579.3726 to start the conversation today.
Thank you for visiting our blog.
I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.
Your feedback helps me continue to publish articles that you want to read. Your input is very important to me so; please leave a comment.
ITB PARTNERS
Last week, one of my clients filed for Chapter 11 Reorganization. Now, two of my clients are in Chapter 11, working to find a path back to solvency. In April, I was engaged by a new client to help them find a way out of Chapter 11. In the case of the two former clients, I can honestly say that I wasn’t responsible for the circumstances leading to their demise. In other words, I didn’t place any executives who caused these problems, and I haven’t been involved in consulting projects that resulted in adverse consequences. To the contrary, I placed an executive to help one client navigate through Chapter 11. Regarding the other client, I placed an executive to help them avoid business failure. Regrettably, Senior Executives sometimes fail to heed sound advice. In each of these situations, failure was predictable. Management failed to adequately penetrate their home markets before moving into new territory.
I’ve witnessed the results of many crazy decisions during my career. Some noteworthy situations include an ice cream brand selling franchises beyond their distribution capabilities. Or a California-based brand that tried to move into the Southeast with a single location. I’ve seen Southeastern brands sell franchises on the West Coast, thousands of miles beyond their management reach and distribution network. A Northern barbecue chain leap-frogged into Georgia with a few restaurants placed across the state. That decision was funny, in a sad way, as barbecue has a distinct regional appeal. Another brand added drive-throughs to dogs with the hope of turning them into profitable restaurants. Sadly, they created dogs with a drive-through. From my perspective, the most egregious yet consistent mistake is the urge for start-ups to enter new markets before adequately penetrating their home base. To be sure, many of those mistakes were made by rookies, entrepreneurs lacking experience or solid advice. However, these mistakes continue to be made by experienced leaders who should know better.
The fundamental axiom for success as a traditional retail brand is market penetration. Achieving optimal market penetration, also known as market share, conveys significant leverage to the brand. Greater penetration yields more efficient deployment of supervisory personnel, purchasing and logistics, marketing expenditures, and employee recruiting and selection, among others. Developing an understanding of one’s customer profile becomes more accurate with more stores as well as an appreciation for drive time customers are willing to endure. Additionally, the development learning curve leads to a more efficient use of capital. And, greater penetration increases brand awareness on the street. This is retail 101. The leverage provided by following this strategy results in a healthy cash flow to be deployed in new markets when appropriate.
I can speak with authority on this subject as I spent most of my career working on retail expansion. I began my career as a financial analyst assigned to the new store development group. In this role, I performed analytical work on capital expenditures for new stores and other investments. I learned how to evaluate the prospects for a new store, and the penetration required to optimize the return from a larger market, i.e. city, SMSA, or region. I became a strategic analyst and planner shaping retail store development strategy for several national brands. Finally, I held general management positions where I was accountable for return on investment. In fact, one of my first assignments as a senior executive was to identify and prioritize markets for focused development. As a result, I am confident in my ability to build a retail brand, especially, food-service brands. I appreciate the value of achieving significant market share before developing new markets. Believe me, engaging in the development of a new market, before adequately developing a home market can be fatal to a business, especially so for a start-up.
So, if significant penetration of a home market is fundamental for success, why does management continue to violate this well-established rule? Over the years, I have asked this question of countless CEOs, CFOs, and Chief Development Officers. The only consistent response is “sometimes, management becomes so enamored of expansion that sound business practices are ignored.” Imagine, human emotions getting the better of Senior Executives. Who knew? The only solution is to hire accomplished retail development executives, among others, who won’t hesitate to tell the “Emperor that he has no clothes.”
Thank you for visiting our blog.
I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.
Your feedback helps me continue to publish articles that you want to read. Your input is very important to me so; please leave a comment.
ITB PARTNERS
We have advisors and coaches in all facets of life. But in this most important area for our future, for our family and for our retirement, most business owners are pretty much just “winging it”. Oh, they may have an accountant but not much more of a team to focus on exit planning in all its complexities. An advisory team is critical for successful succession planning.
Business owners start their companies to create their future. But they often lose sight of the key to making that future happen – building value. They get caught up in the day-to-day and don’t get to implementing the sustainable, positive change that allows them to transition on their own terms.
Consider: “…78 percent of small-business-owner clients plan to sell their businesses to fund their retirement. The proceeds are needed to fund 60 percent to 100 percent of their retirement needs. Yet, less than 30 percent of clients actually have a written succession plan…”
http://www.cnbc.com/2015/04/13/ew-small-biz-have-an-exit-plan.html [I would suggest that 30% is generous, and even if accurate, that those plans are not very effective, for growth or for exit planning.]
When I speak on exit planning/succession planning/transition planning, I outline a proven 7-step process. Forming your advisory team is one of those steps.
Build a Team of Advisors.
Nobody knows everything. Many of my clients are in creative industries, designing, creating, building. You don’t want me in that role. But I have worked with many organizations and have a different experience and skill set than my clients. I bring ideas and experience from many industries and many client engagements. The other critical exit planning team members bring their own expertise to the table. These should include:
When I work with a client, we build this team. The players may already be in place. Or, we may bring in advisors where there is a gap. Either way, we need this core team working with the owner. A business is complex. A marketing action impacts finance, HR, and more. Big decisions need to take into account the effect on the whole organization and should support clear goals focused on building value.
The client receives much better advice and guidance with this approach.
This does not mean that you are going to start hiring all of these people and employing them full-time as you work toward your transition…especially if you have a few years to go. But, you should use them strategically as you build your business/succession plan. For major decisions on growth, expenditures, hiring, exit-readiness, business value, deal structure…engage their expertise!
The Bottom Line
Find advisors who understand what you are all about, your growth and exit planning objectives. More importantly, find advisors with whom you feel comfortable. Make sure that they can work together and collaborate on your behalf.
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David Shavzin, CMC
770-329-5224
david@GetOnTheValueTrack.com
The Value Track
Succession Planning / Exit Planning, Building Transferable Value for Sale
Thank you for visiting our blog.
I hope you enjoyed our point of view and would like to receive regular posts directly to your email inbox. Toward this end, put your contact information on my mailing list.
Your feedback helps me continue to publish articles that you want to read. Your input is very important to me so; please leave a comment.
ITB PARTNERS
Jim Weber, Managing Partner ITB Partners, founder of New Century Dynamics Executive Search and the author of “Fighting Alligators: Job Search Strategy For The New Normal” will be joining our BENG Atlanta Chapter in August. Jim will be presenting: “The Three Pillars For Success”
This discussion is meant to career-minded professionals who are gainfully employed, or between situations, and independent business owners looking to become more successful.
Tue, August 13, 2019
7:30 AM – 9:30 AM EDT
The Atlanta chapter of the Business Executives Networking Group (BENG) is a multidiscipline, independent group of job seekers, those currently employed and business networkers, who are willing to help others. Current membership includes mid to senior-level executives with over ten (10) years of business experience. Past attendees have come from the financial management, information technology, legal, manufacturing, engineering, transportation, logistics, distribution, and general management industries. We actively seek new members from all disciplines.
Monthly meetings are structured to help each member get the maximum benefit.
BENG Networking Meetings:
Networking meetings provide members with an opportunity to sharpen their networking skills, meet peers from various disciplines and share business opportunities and job leads.
