Growth Options, Am I Limiting Myself?

Your business is doing ok but you want more....  You feel there is more potential and you want to capitalize on your energy and drive while you can...  Are you in that position?  What are your options?

Each situation is unique as it varies by products or services, large or small products, your target market, maturity of the business, profitability, infrastructure and many more factors.  Let's look at some potential options.  The most obvious step is continue to do what you are doing as it works and just be more aggressive in defining your market, segment wise or geographically.  Ramping up the marketing and sales effort is generally the one thing that is tried first as it can be done with least additional expense and is just an expansion of the existing strategy.  In geographical expansion it may work with sales people working from their home until a customer base is established enough to justify some infrastructure.  This can be applied to an international expansion as well.  However, on the international side of things many more factors come into the equation and it is less comfortable and familiar combined with higher costs and additional paperwork associated with it. For example if you have need to maintain inventory in your target market, this leads to a relation with some form of storage facility either directly or most likely via a third party vendor and then you have to address all the control, documentation and paperwork issues for those products in that country.  Again depending on the nature of your product, you may be able to drop ship to your customers.

There are also other options via independent sales representation companies or agents in various locales, especially internationally.  However, caution needs to be exercised as they are generally very independent and performance oriented so agreements need to be constructed to provide the guidelines encouraging them to represent your company they way you envision.

Another area often overlooked is a merger or acquisition with a vertical or horizontal competitor or supplier.  It gets written off early on because of the higher cost associated with these transactions.  True, however, what is the return.  Before it is ruled out, analyze it with an eye toward the addition of their margin and what economies of scale on the expense side and potential cross selling on the marketing side. Where does this position your company? Now consider how I might pay for it and when I am paying for it?  How confident am I that it will work?  What am I willing to risk?  What if your business brings benefit the the other company as well, a synergy if you will, then it becomes a matter of finding the common ground where you both win.  Maybe the owners are older and looking to slow down or semi-retire or retire.  Then the focus becomes one of security and return to them.  Mostly they will be looking to cash out on their efforts and will need assurances that you can deliver and what are you willing to risk to bring it to fruition? In the past, I have seen these transactions work through some cash and a note.  The note was actually a convertible preferred debenture that was convertible into controlling ownership of the common stock with very clear performance provisions and rights to cure time frames.  This can be established for a potential succession plan as well.  In that there is a rate and payment plan structured in the debenture.  As long as the performance criteria are met then everyone is happy.  Yes, I know Murphy's Law always comes up.  Thus the right to cure provisions allowing you time to fix issues that may be just temporary.

The point here is that you never know if you do not open the dialog.  What if they have no family to succeed them and are looking for a strategy over say 5 years to cash out.  Can you capitalize on their customers and/or expertise to exponentially grow the combined business? What if you are acquiring a supplier and you can not only absorb their margin but improve upon it through efficiencies through combinations or cheaper locations?  The possibilities are endless.  The question to ask yourself is have I explored all my options?

Seeing Positive in Complex World

Wow!  It has been quite some time since I sat down and shared some thoughts!  Has your world been that busy and seems out of your control or that you are just going through the motions?  Probably the case for many of you who may work for or have your own small business.  So many topics, so many different opinions and a very small amount of real facts.  Everyone seems to be drawn to reality issues so the media saturates the airwaves and the market with any and all it can get its hands on.  You in the meantime are trying to filter your way through it to find items relevant to your needs today or next week and to best utilize the limited time and resources you have.

Don't fall into the trap of being sucked in to the every widening search for "truth" or answers or more likely just "dump".  It previous posts I have talked about planning and execution.  Now it is even more important to have a plan (form is not as important as having a direction and steps to get there).  What is needed from you to attain that plan, today, next week over the next month?  Ask yourself does my product or service lend itself to social media participation?  Will it spread my brand identity translating into new customers or opening opportunities?  Or do I need a presence for feedback or for marketing?  Your energy and resources need to prioritize the best and most cost effective method to reach your market.  Social media can be cost effective but it consumes a lot of time ( a very valuable and scarce commodity).  Do I need to enlist a third party group to handle that and what about the cost?

Add to this mix the cultural and demographic spread that may exist in your market and how they are reached. The younger generations seem to thrive on the social media avenue and while some of the older generation embrace it, there is still leeriness when using it. Let's also mention that if your market is more global, what are the idiosyncrasies of some of the cultures or countries. There can be many factors that weigh in and they are different of course, depending on product or service.

In each and every case and in today's fast paced instant information age, corrections/adjustments can be made often as long as they are seen as more of a course adjustment and not a complete redirecting. So we come back to the planning side of things and how well you analyzed your market, selected your marketing approach and how effectively you monitor and manage your marketing strategy, prospects and customers.  This is not rocket science but it can be overwhelming.  Solid planning reduces the areas of concern and allows you to focus on implementation which is what translates into market presence and ultimately success.

So what is the first step?  I would say take deep breath, pull out a note pad and list what you feel needs to be done (irrespective of where the resources will come from at this point).  When you have completed the list, then go back and place a priority number on it (i.e. what's most important or should I say what you believe is most important), make notes besides those that you can about resources (people who can do it, in your organization or that you know) and then when you feel it needs to be completed.  You have a document that you can use to take the first step.  Now in some cases you may feel that you are weakest in this area and will visit with some friends or possible hire a professional to visit with you about your ideas and possibly offer alternative ideas or resources.  Whatever the case, many times action on even a rough plan will reduce the stress allow you to progress.  This is not a yes/no type exercise and it is dynamic as it should be ongoing quarterly or at the least annually and it should cover more than just marketing.  It does not need to consume days when it can be done in hours after the initial time when you have a better idea of how to work through it. One last note, there are many helpful hands out there who may have some valuable information for you, but you need to control the input, the cost and the time on your schedule.  It is your business!