As a small business owner, you are constantly alert for new ways to grow and improve your company. You know that your business success depends on your ability to plan well and wisely and stave off potential problems. So, what are the guiding principles you should follow to maintain optimal performance? In this article, Jim Weber, Managing Partner of ITB Partners, reveals how successful entrepreneurs stay ahead of the game.
Be a planner.
Goal Setting
Good business management is a continual cycle of planning. Before you even launched your company, you had to draw up a comprehensive business plan. And planning needs to be ongoing. Even if it feels as though your company can run on autopilot, it does not mean that you discard sound management practices. Your management system should include periodic financial forecasts with appropriate adjustments to remedy deficits to the plan. As Zenbusiness explains, failing to have a good plan in place is a common mistake that small businesses frequently encounter. So, avoid this pitfall by having everything organized and mapped out.
Be a Leader.
Your leadership skills may be the most critical part of successful management. No matter how great your vision, no matter how positive your workplace culture is, it is not possible for a company to thrive in the long term if it lacks clarity, discipline, and recognition. Poor leadership tends to trickle down from management into every part of a business, with devastating effects. You can maintain a high level of performance by using business technologies that help you schedule tasks, manage projects, keep track of inventory, communicate with team members, and recognize desired behavior.
Be a listener.
Have you ever had the experience of dealing with someone who didn’t seem to be listening when you spoke with them? Or someone who never seemed to embrace your message? If so, you know how frustrating this can be, whether in business or your personal life. Don’t be that person: make a point of listening to what your partners, advisors, clients, and team members have to say. Practice active listening, addressing their questions or observations directly. Active listening fosters a culture of creativity and responsibility. Make a sincere effort to hear, respect, and understand your team’s concerns.
Be flexible.
The logical progression for a leader is the willingness to change when necessary. Share on X Change can be difficult when you are committed to a belief system or a particular course of action. And no, you shouldn’t deviate from your plan for just any minor issue. When it becomes clear that your goals are at risk, altering your plans is good management. Remember, good leadership means owning and correcting your mistakes.
Be current.
Good management also means staying abreast of current trends in finance, marketing, and technology. Business intelligence must be a team effort. As professionals, each of your department heads should be current in their field. They should share their learning, and you should update the company’s plans accordingly. As their leader, you must ensure that your team has access to high-quality information and resources to perform at peak capacity.
Be a good Corporate Citizen.
Failure to follow the laws and regulations that govern business activity can be costly. As a leader, you must work within the framework of employment law, permitting, licensing, taxation, among others, to ensure the success of your business. One area where new business owners risk expensive fines and penalties is in payroll tax compliance. Minimize this risk by using a sound payroll system with competent oversight. It’s also essential to choose the proper legal structure for your business. For many small business owners, a limited liability company makes the most sense, as it reduces paperwork and may yield tax savings. Save time and avoid added expenses by having an online service register your company as an LLC. Your lawyer and accountant can guide you in this area.
Think of good business practices as pillars supporting your business. Make sure your whole company understands and embraces these principles. By doing so, you will improve the likelihood of continued success and increased profitability.
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I work with many startups and emerging brands. They have become the core of my business. It gives me great satisfaction in helping them with their recruiting needs. When my colleagues and I created ITB Partners, our strategy was to focus on this sector. Companies in this phase of their life cycle face decisions that carry significant risk. One or two bad choices can sink an otherwise viable company, even if they have proof of concept. We believed we could help emerging companies achieve success by avoiding business-killing mistakes. Recruiting new employees is one of those high-risk activities.
A growing company will eventually need to increase its staffing level. They must approach this high potential risk with caution. For many of my clients, i.e., emerging brands, the first consideration is to find an outsourced solution. Many job functions can be outsourced, including accounting and human resources. A recent client had even outsourced most of their marketing function. However, a viable outsourcing strategy requires a strategic-level employee on staff to manage the outsourced function.
A good example is to hire a Controller or CFO to manage the outsourced accounting function and interface with the financial community and investors. Mission-critical job functions probably cannot and should not be outsourced. Early on, outsourcing non-mission-critical job functions may be a better use of a company’s resources. It is also a valuable way to reduce the risk associated with an expanding workforce.
Some Pitfalls.
Adding too much staff too soon.
Failure to use outsourced solutions
Lack of prioritization of positions to fill
Lack of processes for recruiting and selection
Lack of training for interviewing and selection
Lack of a coherent reason why someone should join your company
Recruiting for startups is different from hiring for a going concern. As I say, the risk is more significant. The costs for hiring a non-competent employee or someone whose behavioral issues negatively impact the culture may significantly affect a small company. Established companies have less difficulty attracting good employees. They have people, processes, and systems to ensure an effective recruiting and selection process and lower risk profile. They have an established culture and look to fill positions with people who reflect their mission.
Small, emerging companies have fewer resources, are less political, and have a bias for action. Speed rules! Entrepreneurs often have unconventional management styles. They can be chaotic. Employees working in these environments must demonstrate a high degree of flexibility and adaptability. Job roles have a wider scope, requiring employees to have a broader experience. It requires employees with greater self-confidence who are comfortable in an ambiguous, less-structured work environment. Many entrepreneurs lack training in recruiting, selection, onboarding, and retention. Job descriptions are challenging to create as ideal candidate profiles, and behavioral components may be more important than skills and experience. Finally, an emerging company may have more difficulty selling employment opportunities as their brands are unknown.
What to Do?
Begin with a plan!
Set staffing priorities w/timeline for hires
Can function/position be outsourced?
Establish processes for recruiting, selection, and onboarding.
Determine training needs of key managers and decision-makers.
Determine selection criteria (skills, experience, cultural fit)
Determine employer’s Unique Selling Proposition – Why should I join this company?
Let’s assume that you have a process in place to determine if a function should be covered by a contractor, an outside resource provider, or to hire W-2 employees. You have determined that you need a significant addition to staff in one or more mission-critical areas. Your solution is to hire employees to meet this need. How should you proceed?
As with any initiative in business or life generally, a successful outcome usually begins with a plan. Actionable data is required to develop an effective plan. So, what is the information you need? First, understand the work to be done and the importance of that work to the current year P&L. In other words, a cost-benefit analysis for each position you need to fill. This information provides the priority for filling each position.
To summarize, you have determined that increasing your company’s employment base is necessary for growth. But adding employees carries risk. You understand that minimizing this risk is critical to your company’s survival. Fortunately, you can mitigate this risk by improving the skills of those responsible for recruiting and selection. The solution is to find a consultant or a program that will give your managers the training and development they need. The cost of failure in this regard cannot be understated.
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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.
POSITION SYNOPSIS:
As a key member of the senior leadership team, the highly entrepreneurial Head of Marketing will drive the development and execution of a comprehensive marketing plan and growth strategy to align with the company’s objectives. The position oversees the organization’s branding, digital & traditional marketing, partnerships, event planning, public relations, community outreach programs, and customer experience group.
Key qualities for success include:
● Entrepreneurial
● Can get things done tactically while moving a business forward strategically.
● Has successfully built a team, in a phased approach.
○ Balancing readiness for the investment against spend for agencies.
● Understands and believes in holding consultants accountable via contracts with performance metrics.
● Understands that a budget is a guideline, everything must be evaluated as time and direction change.
● Is fanatical about the numbers — especially about CAC and conversion
● Ability to shift between tactical and the strategic
● Has managed an e-commerce DTC brand – either someone from food
delivery or someone who comes to the table with great ideas on how to
apply their experience to food/meal delivery.
KEY RESPONSIBILITIES:
● Work collaboratively with other members of the leadership team to define objectives, KPIs, develop budgets, strategies, and achieve targets in line with founders’ vision and the company’s mission
● Lead development and execution of a differentiated, consumer insight-driven brand strategy.
● Diversify the mix of digital and analog acquisition channels to more effectively target prospective higher affinity customers, increase conversion and LTV, reduce CAC, and scale.
● Monitor and optimize the payback period of each cohort of users making the necessary adjustments in the quality of acquisition.
● Set up frameworks to create successful funnels. Design an acquisition mix that is truly user-centric and leads media buying to bring traffic that converts to new users that meet our growth targets.
● Design, develop and execute formal customer retention strategies and programs.
● Identify and engage key strategic partners to increase brand awareness and drive growth.
● Develop and manage the consumer-facing digital and offline experiences.
● Oversee the company’s customer experience group
● Develop value-add presentations to engage key internal stakeholders, investors, and partners.
● Drive company vision, messaging, and brand consistency; instill a growth-minded culture.
● Full P&L responsibility for the marketing department
● Recruit and lead talented internal and outsourced teams
QUALIFICATION REQUIREMENTS:
● Minimum 10 years of marketing experience, and a successful track record formulating and leading marketing strategy, implementation, and team building for direct-to-consumer e-commerce companies.
● 5+ years of marketing experience driving customer acquisition across marketing channels (PPC, Display, Paid Search, Paid Social, Retargeting, etc) – startup experience preferred.
● 5+ years of marketing leadership experience
● Subscription experience is preferred
● Experience working with ad-serving platforms and digital monitoring tools, as well as offline marketing tools and strategies as well.
● Experience in leading and managing A/B testing, embedded media, and marketing program optimization
● Demonstrated data insights (KPI’s, traffic, revenue, conversions, ROI) to improve marketing efforts
● Demonstrated interest and/or experience working with or coaching a fast-growing company.
● Excellent oral and written communication skills with the ability to effectively communicate with and influence colleagues at all levels.
● Excellent eye for design and can understand and interpret design language (digital and analog), experience managing designers, developers, and agencies.
● Sense of urgency in assisting the brand to navigate the ever-changing landscape to commercialize opportunities.
● Strong leadership, talent mentoring, and talent development skills.
● Enthusiastic, can-do approach, with the ability to prioritize effectively in a rapid-paced environment.
● Self-motivated with critical attention to detail, deadlines, and reporting.
● Bachelor’s degree in Marketing, Communications, Business Administration, or related field of study. MBA Degree preferred.
Compensation and Benefits
● This position is an “at-will”, full-time, salaried, exempt position. The salary will depend upon the candidate’s relevant experience
● Competitive benefits are available – medical, dental, vision, life, disability, and 401k
Location
We work in the East Coast Time Zone. The majority of work is remote. Available for periodic meetings – after the pandemic in greater NYC. Relocation expenses are not available.
The Company is an equal opportunity employer. We value a diverse workforce and an inclusive culture. We encourage applications from all qualified individuals without regard to race, color, religion, gender, sexual orientation, gender identity or expression, age, national origin, marital status, disability, and veteran status.
Ideal Candidate Profile
Who comes from a Tier 1 D2C Meals Company that has grown to become a market/sector leader:
HelloFresh
Freshly
Factor
Tier 1 D2C Consumer Brands:
Magic Spoon
Stitch Fix
Allbirds
Warby Parker
Away
Bonobos
Glossier
Casper
Harry’s Razors
Dollar Shave Club
Or Tier 1 Early Stage Branding Agency who has helped companies like the
above ideally early on that led to a growth inflection point: e.g. Red Antler.
Join me and the “What’s Your Plan B?” Executive Development networking group for this informative, interactive online discussion.
Am I Cut Out for Self-Employment?
Thursday, June 24th
8:00 am ET (45 min + Q&A)
FREE event (join at 7:45 am for networking) RSVP – click here
While the autonomy and flexibility of self-employment are appealing, how can you know if it’s for you? Can you achieve your desired success as your own boss? What are the risks and rewards? What are your available options? If you are considering self-employment, or find yourself at a career crossroads, this session will answer:
Common traits of successful, happy self-employed professionals.
Pros and Cons of Acquisition, Consulting, Franchising, and Start-ups.
Affordable funding options.
Free resources for new business owners.
The COVID-19 impact for considering starting a small business (benefits and challenges) will be discussed.
Want to chat with me now? Please use my scheduling link to choose a time to take my call: https://calendly.com/leslie_kuban
To your success,
Leslie
Business owners working on exit planning and maximizing the value of their company for sale often take a wrong turn. Litigation is a nightmare. When we work with owners to sell their companies and advise on the value-building process, we find they are sometimes destroying business value without realizing the extent of it.
We are human beings – we get into disputes. This is America – people sue people. If you have been through business litigation of any sort, you know it is not pretty. In the end, it’s rarely worth it. You may be in the right, there may be real damages or loss of money, and darn it, they should pay!
Certainly, there are situations in which you cannot avoid the dispute dragging on. It may be a substantial amount of damages or it may be a more complex situation tied to other potential liability. Often, however, the relentless, unending fighting – especially going all the way to court – can reduce the value of your company. If each year over a few years you are paying $100,000 in legal fees and your net income takes a hit of $100,000, the reduction in business value can be in the hundreds of thousands of dollars.
Revenue Decline: There is no question that you will be distracted by the process. Even with your attorneys handling much of the work, it will always be on your mind. Stress grows and you will have a less-than-100% focus on growing your business, exit planning, and building value for a sale. Revenue will suffer.
Bad Decisions: You will – consciously or subconsciously – adjust the decisions you make away from your best course of action because of the ongoing dispute and its implications.
Attorney Fees: They add up very quickly – quite possibly ending in more money than it would have taken to just pay the *$*&* and get it behind you to focus on value growth.
Brand Damage: The longer the fight continues, the more likely this will get out to hurt your brand and image, even if you are right!
36 to 53 percent of small businesses are sued in a given year.
So just forget it?? Well, sometimes, yes, as much as it pains you. Work with your attorney to make a fair offer, even go a little higher to get it settled! The investment can be worth it!
There are great attorneys who know that doing right by their client is to quickly come to an agreement. Make sure your attorney is not encouraging you to fight without considering all options, the financial implications, and the effect on business value. Consider the options, despite your frustration. You may be on the right side of the dispute but don’t reduce the value of your business any further.
Don’t let one of these issues delay or derail your exit planning, value-building, and the sale of your company. Resolving these issues quickly will help you maximize value and move through the business transaction process more smoothly and quickly.
Call if we can help you think through your specific situation. Always happy to have a conversation to provide some guidance on the business sale process, business value, exit planning or building value for sale.
David Shavzin, CMC, Exit Strategist
David Shavzin
Transactions, Value Growth, Exit Planning, Succession Planning
Businesses and consumers cannot be without their technology systems and devices working properly. If you are interested in having your own business in a high-demand industry then join me…
Wednesday, March 10th, at 12:00 pm EST, I’m hosting a 20-minute, online presentation about a compelling IT Services franchise opportunity – click here to save your spot.
Why is this IT Services franchise opportunity special?
The parent franchise company is one of the strongest organizations in franchising today. The marketing and lead generation department alone houses 30 professionals dedicated to driving brand recognition and customer growth.
No IT Background is necessary – franchise owners execute the marketing plan, focus on scale, and oversee the P&L – they do not work in the field.
Executive model – franchise owner oversees a small, professional staff.
You might be thinking… ”I don’t have an IT background, so how could I possibly own an IT services business?” This is often surprising…less than 25% of successful franchise owners have a background in the industry of their new business. Franchising is designed for new business owners to thrive in a new industry with less risk.
HR trends and best practices for business owners and management.
Distress in the workplace lately? You’re not alone. Flex HR consultants often get asked to come to speak to businesses in various industries regarding the vital HR functions to keep their businesses sustained properly. Thus, Flex HR offers a Human Resources Bootcamp for business owners and managers.
Recently, Flex HR hosted a Human Resources Trends Bootcamp in Denver, CO. This discussion focused specifically on Veterinary Practice initiatives essential to HR that owners and managers must comprehend to stay compliant with labor and IRS laws.
This presentation took a deep dive into HR best practices, current HR trends, clarifying policy, laws, handbook communications, managing millennials, HR operations, onboarding & termination, and of course the impacts from COVID-19. Jim summarized tangible situations and how the repercussions can cost tens of thousands of dollars to your organization. He also outlined the “Risk Factor” of actions that are critical for managing the human side of an organization’s enterprise providing examples on how to get the most out of your human capital, along with tools to take back and implement in your practice. It’s imperative for businesses of all sizes to protect and grow their assets, but lack the HR knowledge to do so. Consequently, nearly 85% of organizations outsource at least some HR functions.*
Jim Cichanski – CEO FlexHR
Jim Cichanski was the presenter. He is the founder and CEO of Flex HR, Inc. and a Preferred Partner of VSG. Jim also spent 26 years in the Army National Guard achieving the rank of Colonel, was inducted into the Officer Candidate School Hall of Fame, and received numerous awards including the Legion of Merit. Jim holds a BA in Applied Behavioral Sciences, is a graduate of the Department of Defense Equal Opportunity Institute, has served on the board of HealthSource of Georgia, and was an inside board member of 17 companies. He is an active member of many HR professional organizations. He recently served on the Board of Directors for HomeStretch and is an Angel investor in several Human Resources related ventures.
FlexHR
Flex HR, Inc. is among the top HR outsourcing and consulting firms, based out of the Atlanta, GA area. They were selected Best of Johns Creek Award in the Business Human Resources Consultantcategory by the Johns Creek Award Program last year, and this year was inducted into the Johns Creek Business Hall of Fame. The Atlanta Journal-Constitution awarded Flex HR “Best of Atlanta Business Profiles” while Outsourcing Gazette magazine listed Flex HR as the “Top Most Promising HR & Staffing Service Vendors.” For 3 years INC Magazine recognized Flex HR as an Inc 5000 “Fastest Growing Privately Held Companies in America”. Jim was also recognized by the North Fulton Chamber of Commerce as the “Small Businessperson of the Year.” Catalyst Magazine acknowledged Flex HR as 1 of 18 Companies CEO’s in Atlanta would like to own.
Visit our Coronavirus pandemic page or more information on how businesses are managing their HR assets during the continued consequences of COVID-19.
Do you need an HR Bootcamp for your business or more information? CONTACT US NOW
As the CEO of a small or mid-sized organization, you understand the urgent need to take a significant step forward in your DEI (Diversity, Equity, and Inclusion) efforts. You want to take the right approach, but resources are tight. Your instinct is to proceed slowly and thoughtfully. This critical decision revolves around selecting the right person to lead your efforts. In my first blog, I offered several tips on how to go about this critical decision.
So, let us dig into this selection process even further. The person that you select and their title, yes, their title, will send a message within the company on how sincere you are along with your personal commitment level. For example, I recently worked with a new President of a large gaming company who was sincerely committed to taking the right steps forward. He truly wanted his business unit to lead this multi-business organization in the Diversity and Inclusion (D & I) arena.
Unfortunately, many in his employee base came to a quick determination that his actions were a token not to be taken seriously. Why?? He hired a wonderfully dedicated woman but brought her in at a “Manager’s” level. While she had a strong passion and desire to succeed, her background, skillset, and experience reflected this entry-level title. To make matters worse, she was faced with a matrix reporting relationship which created total confusion. Predictably, the results have been minimal and frustration levels are high.
Here is the moral of this story. This very large and financially successful conglomerate could only muster a “Director” level as the company’s D & I lead. Now, here you sit as a small to mid-sized CEO trying to chart a course back to financial viability. Your organization’s resources are stretched, especially in these turbulent times. So, what is the answer??
My strong advice is to find a highly qualified person, inside or outside of the organization, while being cost-conscious. Seems like an oxymoron, doesn’t it? This strategic move is no different than any other that you have or will make in the future. Throwing money, money you do not have, at this strategic imperative is not the answer. As I have mentioned before, a well thought out strategic plan that integrates with your current strategic plan is the way to go. So many organizations of all sizes often take a very tactical approach that focuses on entry-level employee training versus a more strategic top-down plan.
My next blog will provide recommendations on how to focus on the right steps for your organization, once you have selected the correct person who can provide real and sustainable results for the organization, now and in the future. If you have this person who can absorb this role internally, you are very fortunate. Most likely, you will have to look outside. Consultants are a dime a dozen; a sunset “Fractional” CDO (Chief Diversity Officer) may meet the qualifications and cost criteria. Feel free to reach out to find out how this can work for you.
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.
Have you gotten this phone call, regardless of where you are in your exit planning? During challenging, tumultuous times, this call comes from many corners. Some are legitimately interested, some are fishing, some are trying to take advantage. It may or may not be the right timing for your exit planning.
Over the last few months, we have heard from several business owners asking for help because they received “the call“.
When this question comes at you, it can be interesting, even exciting. How do you respond?
The best response is to ask for some basic information and let them know you will get back to them. Whether they say they are the potential buyer or representing the potential buyer, ask for their name, phone number, email address, and website. If you can’t get that, politely end the conversation. If they say they are representing another party, ask for the name of that person or company. They may not share this initially but ask. Getting some basic information will help you do some digging. It may be something like “I have buyers that are interested in your business.” If you hear that, consider ending the conversation! In any case, do NOT share any information, financial or otherwise, on this first call. Step back and consider your exit plan.
Even if they are legitimate, remember that they are representing the seller. This is a complex transaction, probably the most complicated one you will ever consider. It will impact your life, retirement, family, and employees for the long-term. Succession planning takes some time.
As I discussed in my last blog (Sell My Business Now? Wait for the Economy?), you need to consider so many factors when deciding if this is the right time for you to sell. It may very well be. Even then, you need experienced professionals who provide transaction services to help guide you through this most important decision and avoid the expensive pitfalls of trying to go it alone.
If you are ready to sell, get professional representation to help manage the process. A business sale is always complicated, even more so under current conditions. If you are not ready yet, start with an estimate of value and some advice on preparing your exit plan – whether your target is one year or 10 years. If you do have time, focus on getting through COVID-19 and building business value: Rebuilding Post-Crisis.
Call if we can help you think through your specific situation. Always happy to have a conversation to provide some guidance!
Stay Healthy & Safe!
David Shavzin
David Shavzin, CMC Exit Strategist – Value Growth, Exit Planning, Succession Planning, Transactions
From the mind of Don Turner – “Creating Clarity in a World of Complexity’
We are in our last installment of “Company Restoration in the New Normal.” I hope you are finding it informative and it is prompting some of your own thoughts about what to expect as we conduct business in this new world, we have found ourselves. Again, I invite you to leave comments on your thoughts so we can all learn together.
“The capacity to learn is a gift; the ability to learn is a skill; the willingness to learn is a choice.”
~ Brian Herbert
In Part 3 we introduced this mind map of the “5 C’s Restoration Strategy” and discussed the first three. In this final Part 4, we finish introducing the last 2 “C’s” and talk about the future.
5 C Restoration Strategy
COMMUNITY
“Alone, we can do so little; together, we can do so much”
~ Helen Keller
Your business operates within a community of Suppliers, Customers, Lenders, Local Government, and more. In “normal” times there is always a level of dependency with each member of this community. I know many companies like to talk about “partnerships” over “vendorships”, but the reality is that there is always a recognition that if needed there are options to replace one member of your community with another – i.e., the “law of supply and demand.”
Given the increased requirements of conducting business in the New Normal, you will be forced to have more detailed, more transparent, and more involved “heart-to-heart” discussions with everyone in your Value Chain. You will certainly need them to be accommodating to your liquidity pressure as they will require the same of you.
If there ever was a need for commitment over-involvement, the New Normal is the time.
With all due respect – and somewhat “tongue in cheek” – you and your business community need to embrace the “swine mentality.”
What does this mean?
For Suppliers associated with some form of fabrication, you may have to jointly work out the flow of raw materials with the flow of cash. As mentioned in the last installment, this will likely have several characteristics to it:
You may have to interactively negotiate cash flow terms between your Supplier and yourself and with your
Customer and yourself. This will require a level of trust
AND transparency that all parties are most likely not accustomed to. Expect to have honest discussions around “normal” margins and temporary New Normal margins – i.e., “I’m working at 20% less margin, can you sell to me for 20% less?” Who knows? In the short-term, you may have to “open the books” to negotiate with your Suppliers and Customers.
If – and that is a big IF – this is done successfully, would fully expect these relationships to evolve into strong “shared goal” partnerships as we evolve into later stages of the New Normal.
For service Suppliers, the challenges maybe even more difficult given that in tough times cutting back on outside services is typically one of the first burn rate reduction initiatives. With this in mind, there will be a renewed focus on monetarily quantifying your value-add to your Customer. This will be a rude “wake up call” for many Service Providers who have ignored this service-providing fundamental for way too long – i.e., paying “lip service” to it in promotional literature without routinely reviewing, refining, and enhancing their value to the marketplace.
You may have to provide a partial service to your Customers for a heavily reduced amount just to keep the business. In this case, you may have to significantly broaden your Customer base providing a narrower focus of services for heavily reduced prices.
All this said, with either fabrication or service Suppliers, I would expect that those business communities that survive and evolve into the New Normal to represent phenomenally stronger entities. This should serve them well in the future.
We addressed “Customers” as a stand-alone item in the 5C Restoration Strategy but it deserves some additional discussion in the context of your business community.
Customers should be open to discussing mutually beneficial arrangements where you can offer a temporarily reduced price and in turn, they will give you a long-term commitment to continue purchasing as the market becomes healthier. As with your Suppliers, you will likely have discussions that involve an entirely new level of transparency.
Again, everyone is simply trying to engage in commerce again. Communication, creativity, transparency, and commitment are the ground rules for the New Normal.
Lenders have always been willing to talk about helping in a distressed situation. Trust me, they don’t want to see you fail – costs them money, time, and a whole lot of paperwork. In the New Normal, there may not be much new capital available through traditional lending institutions (ED: we will briefly address the role of Private Equity at the end) but that is likely not your issue. Early in the New Normal, businesses will most likely be looking to “buy time” in dealing with existing institutional debt.
Relative to new lines of credit, I don’t see this as an impossibility if the Lender is brought into the interactive and integrated discussions that you are having with your Suppliers and Customers. At the risk of repeating myself ad nauseam, this will require complete transparency and a commitment by all members of your business community to work together. “Good and Services” move on the current of “Cash Flow.”
COMMERCE
“When only one party makes a profit that’s robbery; when all parties make a profit that’s business.”
~ Amit Kalantri, Wealth of Words
Last but not least is the business itself. An involved topic but the key points are:
New Normal Marketplace Ground Rules – you must take an honest, fresh look at your value proposition into the marketplace. Think through the real value your offering has to your Customers. If you can’t answer the following four questions succinctly then you have a true “value proposition problem” with your business:
“Why should the Customer listen to you?” 2. “Why should the Customer listen to you now?
“Why should the Customer buy from you?”
Why should the Customer buy from you now?”
There is a “brave new business world” coming via the New Normal and I see only quantifiably value-offering businesses surviving, much less thriving.
SHORT-TERM GAME PLAN – the first step in your Restoration is to deal with all of the aforementioned. In addition, have a Restoration Game Plan that you look at EVERY day, THROUGHOUT the day. Each day should involve laser-focused attention to balancing:
Delivery Cycle Excellence – if your offering is still relevant in the marketplace then there will always be Customers for those who can deliver real value quickly, cost-effectively, and with superior quality.
Liquidity Management – in the early stages of the New Normal, liquidity hiccups can be deadly. Constant vigilance and constant communication backward and forward in your Value Chain is critical.
Culture – remember your employees are no longer coworkers. If you have made the management to leadership transition effectively they are your “Battle Buddies”, your
LONGER-TERM GAME PLAN – obviously the longer we look into the future the less clear our “crystal ball” will be. However, looking into the future is something we all must do – the alternative is to face the professional ignominy of being a “Reaction Manager” versus a “Proactive Leader.” Note, this “looking into the future” is where the art and science – and trust me it is clearly both – of Strategy comes into play.
The fact is that we may not make strategic decisions daily, but in a lifetime of developing and executing strategy, I guarantee you that you are exposed to “strategically-relevant” information EVERY day, throughout the day.
If you don’t have the processes and tools to capture in real-time you should at least set aside some time at the end of every day and ask yourself, “what did I learn today that may impact my long-term direction at some point in the future?” This observation can involve the market in general, Customers, Competitors, Offerings, or the underlying technology that is part of your marketplace. Sometimes it is nothing more than a “tidbit” of news – you need to learn how to identify “potentially” important strategic data (ED: it is a sad testimony to our Business School educational system that many professionals have never been taught to be “Strategic Thinkers”).
An additional observation based on a little bit of experience on the topic is to understand what is becoming LESS important in the marketplace. Many professionals only try to understand the emerging or growing trends – remember how we said that is the “essence” of strategy – and that is a good thing. However, what is often ignored from a resource planning perspective is also trying to understand what is becoming less important. It is amazing how many times I have found organizations still investing significant resources – time, personnel, and capital – on items that are becoming less relevant in their marketplace.
Bottom line, the objective is to gather and organize strategic information in a way that it is useful when you formally sit down with your Team to refine your strategy – whether that be monthly, quarterly, semi-annually, etc. (ED: timing is a function of the “velocity” of your particular marketplace).
“It’s amazing how a little tomorrow can make up for a whole lot of yesterday.”
~ John Guare, American Playwright
FINAL RANDOM THOUGHTS
Given that in recent years I have worked with a lot of Private Equity organizations, a comment or two about how they will play and play into the New Normal seems appropriate.
First and foremost, they will be laser-focused on the survival of their current portfolio companies. They always hold back extra capital – i.e., “dry powder” – to further invest in their portfolio companies when either things have not gone as planned or there is an opportunity to grow even faster. Obviously, nothing prepared them for this economic calamity of a global scale. It is likely that some “fire sales” will be taking place as they identify portfolio businesses that simply aren’t relevant in the New Normal and need to be jettisoned.
That said, once their portfolio is relatively stabilized, expect them to be on a “rollup” frenzy – where a “rollup” is when an investment firm buys multiple smaller companies in the same market with the intent of developing economies of scale and becoming more of a dominating force in that particular marketplace. With the expected business casualties of the New Normal, it is likely to be what we refer to as a “target-rich environment” for buying distressed companies.
As a business professional, it would be to your benefit to follow these rollup activities and look for opportunities for your own business. Ahhh, but that is a topic for another day.
SUMMARY
As we come to a close on our look at restoring companies in the New Normal, let us review what we discussed:
We are NOT going back to normal, there will be foundational changes in our society, our culture, and the manners of how we conduct commerce.
Surviving – much less thriving – will involve far more involved techniques than normally associated with “Restructuring” or “Turnaround” – though the actual stages remain the same
Successful business Restoration will require innovative approaches to managing Cash, Customers, Culture, Community, and Commerce itself
So. we are headed for a New Normal – of that, I have no doubt. Here is to hoping that we can use these “interesting times” to our advantage and make a better world for all.
Particularly in challenging times, success is NOT about knowing the answers to tomorrow – few have that prophetic ability.
Future success is based on asking the right questions today.
Good luck. May you and yours be safe and healthy.
Don Turner, 24 Apr 2020
Don Turner
Don Turner is a serial growth and turnaround executive with success in a broad range of marketplaces and business situations. He is also an internationally recognized Strategist who has deployed his VOGI® Strategy Methodology in over one-hundred organizations ranging from startup to NYSE and NASDAQ public companies. Routinely called in to deal with some of the most difficult business problems, one executive summed it up as, “everything Don touches is better as a result.”
From the mind of Don Turner – ‘Creating Clarity in a World of Complexity’
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Your leadership skills may be the most critical part of successful management. No matter how great your vision, no matter how positive your workplace culture is, it is not possible for a company to thrive in the long term if it lacks clarity, discipline, and recognition. Poor leadership tends to trickle down from management into every part of a business, with devastating effects. You can maintain a high level of performance by using business technologies that help you schedule tasks, manage projects, keep track of inventory, communicate with team members, and recognize desired behavior.
Good management also means staying abreast of current trends in finance, marketing, and technology. Business intelligence must be a team effort. As professionals, each of your department heads should be current in their field. They should share their learning, and you should update the company’s plans accordingly. As their leader, you must ensure that your team has access to high-quality information and resources to perform at peak capacity.
I work with many startups and emerging brands. They have become the core of my business. It gives me great satisfaction in helping them with their recruiting needs. When my colleagues and I created ITB Partners, our strategy was to focus on this sector. Companies in this phase of their life cycle face decisions that carry significant risk. One or two bad choices can sink an otherwise viable company, even if they have proof of concept. We believed we could help emerging companies achieve success by avoiding business-killing mistakes. Recruiting new employees is one of those high-risk activities.
Business owners working on exit planning and maximizing the value of their company for sale often take a wrong turn. Litigation is a nightmare. When we work with owners to sell their companies and advise on the value-building process, we find they are sometimes destroying business value without realizing the extent of it.
Again, everyone is simply trying to engage in commerce again. Communication, creativity, transparency, and commitment are the ground rules for the New Normal.
then there will always be Customers for those who can deliver real value quickly, cost-effectively, and with superior quality.
The fact is that we may not make strategic decisions daily, but in a lifetime of developing and executing strategy, I guarantee you that you are exposed to “strategically-relevant” information EVERY day, throughout the day.
