Envision Something Well Beyond Your Means

Then Share the Vision w/ People Who Have Money

Visit www.Natirar.com and you will see photographs of a 500 acre estate with lovely rolling hills, a winding river, and beautiful foliage. And you will also read information about the 90 Acres Restaurant, the farm that provides organic produce for the restaurant, the culinary center, the wine cellar, the refurbished mansion, and the planned SPA. I am not sending you to the site just to enjoy the pretty photographs. NATIRAR is a lesson in joint ventures and marketing.

The history is fascinating. The original owner was a wealthy Quaker woman whose will required that the mansion be used as a convalescent home for women for at least 50 years following her death.  Go to the “our story” section of the site to read how Bob Wojitowicz envisioned something better for the 100 year old estate. Read how he reached out to Sir Richard Branson (yes…The Virgin Airlines Branson) to become business partners to purchase the 500 acre estate from the Royal Family of Morocco. Read why and how they now have a 99 year ground lease with Somerset County for the 90 acre parcel that includes all of the buildings.

Are your visions larger than your own resources? I hope so. The best projects involve other peoples’ money.

This week I participated in a reunion of NJ300 (a group of very influential women) at NATIRAR. Bob Wojitowicz shared the history and plans and then provided a tour of the mansion, restaurant, culinary center and wine cellar. Our private dinner included paired wines and culinary delights.  I am certain that several NJ300 members will be returning to NATIRAR. Some will host client events there. Some will wait until the SPA opens. Some may suggest NATIRAR to their daughters when they start planning their weddings. A few will take cooking lessons at the culinary center.  And most will return to dine at the restaurant.

Are you hosting events for prospective customers who have the resources to utilize your products and services?  As influential as they/we are, the members of NJ300 have busy lives. The majority of the NJ300 members had not heard of NATIRAR; but they/we know about it now.

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her current service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™. Ambler is wrapping up her 7^th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business. VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8^th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com             

 

BEFORE You JUMP into a Joint Venture, a Strategic Alliance, a Franchise, Equity Deals, a Roll Up, an ESOP…

 

Recently, I’ve noticed more and more executives of midsized companies JUMPING into strategy implementation.

It’s too easy to fall in love with one strategy over another because you’ve heard a peer share a success story. “Hey, we could do a strategic alliance. George did it.”  Well written articles or webinars with great case studies can convert some people into raving fans of joint ventures or roll ups.  One of our clients became enamored with the idea of franchising his company after his wife was hired by a successful franchise.

The economy has created uncertainty.  Bright ambitious executives (perhaps you) feel like caged cats and are “itchy” for a change. It becomes very tempting to JUMP right into a strategy.  At least that way, something is happening, right?  Well, disruption might be happening that way, but your team will not understand the rationale behind the strategy you have jumped into. You lose credibility as a leader.  And successful implementation is risked. Some folks are JUMPING into strategies when they don’t know the differences between them, what each really involves, and the pros of cons of each. And then they are surprised when bankers are still reluctant to finance them.

Instead of jumping right into a strategy, this would be a great time to involve your executive team. Everyone could benefit from some concentrated learning.  Your controller could be asked to analyze the costs associated with strategies like franchising, roll ups, joint ventures, etc.  Your VP Business Development could be asked to analyze which approaches are being used in your industry and why.  Your General Manager of VP Operations could study pacing and look at what is involved with each strategy.  Everyone would be smarter and by the time you and your team select a growth strategy you will all have a much better sense of WHY it was selected.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called The Growth Strategist™. She has won over two dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across four recessions.  Her midsized B-to-B service, technology and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search, etc.) help midsized companies in Achieving Accelerated Growth With Sustained Profitability®. Ambler is in her 7^th year hosting a weekly peer-to-peer-to-peer online radio program Growth Strategist Radio Show, at www.GrowthStrategistRadioShow.com, that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy of the week. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

 

It’s Time to Address Two Expensive Executive Behaviors

If you read my weekly blogs, you undoubtedly also know that I host a weekly on-line radio show called The Growth Strategist™. I’m in my seventh year hosting it and just LOVE hearing about what people have done to make growth strategies like acquisitions, franchising, market expansion, etc really work.  My guests are all Presidents/CEOs of midsized companies (typically $20 -200Mil/yr) so they are all bright and experienced. Most convey enthusiasm and are articulate.  We are coming up on our 300^th show soon (YEAH!) plus I’ve provided strategic guidance to over 800 consulting clients over the years.  The point is…by now I can hear some distinctive patterns. Some of the patterns may not be surprising.  But in a way, if they are so predictable, wouldn’t you think that more executives would be addressing them by now?

For example: When I am rehearsing with the President/CEO of a family-owned business, I usually get candid responses to questions about target markets, primary customers, and key products.

Don’t get ahead of me here.  Of course, I can’t start with questions about succession, exit strategies, or executive compensation.  Heck…an executive doesn’t have to be running a family owned business to be reluctant to talk about all of that.

Take a step back from all of that. The answers from executives of family owned businesses seem strained when the topics of strategic alliances, joint ventures, or acquisitions come up. The implication is that internal relationship issues make negotiations with outside entities more difficult.  These days, that fact would certainly turn “family owned” into a handicap because customer expectations are going up and up.  The cost of trying to do everything yourself is becoming prohibitive.  Plus the world is getting smaller and smaller.  Today, a family must proactively address relationship issues that slow down strategic analysis or decision-making.  It sure comes across in media interviews. The radio guests who attract new business opportunities as a result of appearing on my show have conveyed openness, clarity of direction, a capacity to interact with a wide range of people, and an understanding of how deals are struck.

I’ve also noticed that most of the female executives avoid directly answering questions about strategy. I repeat, my guests are all Presidents/CEOs of midsized companies. These are accomplished executives!  I’ve been amazed how many times I have had to encourage (no plead) with the female guests to share the logic behind major decisions like acquisitions, new products, or geographic expansion. Several have been reluctant to directly respond to the straight forward question about their gross revenue… even though the numbers are plastered all over press releases and resources on the Internet.  And when these reluctant female executives do share their gross revenue, they provide too much explanation. It sounds almost like an apology.  Some of them are running $Bil businesses!  Why on earth are they apologizing to anyone!?

There are undoubtedly several understandable reasons for the reticence to just talk. But frankly, my experience as a talk show host has given me new insight about why so many corporations have been reluctant to appoint successful women business owners to their corporate boards. The major search firms who are looking for board members screen shows like mine. They must be concluding that the female guests CAN’T think strategically or CAN’T keep up with a high level discussion. That’s very sad.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability.™ Ambler is in her 7^th year hosting a weekly peer-to-peer-to-peer on line radio program at www.Business.VoiceAmerica.com and www.growthstrategistradioshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses will be emphasized in 2011. Ambler can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

 

 

Know Your “Sweet Spot” Before Considering Outside Deals

The executives of a public relations firm that specializes in crisis communication for large corporations in the healthcare industry recently asked us if they could grow more quickly through acquisitions, joint ventures, strategic alliances, and/or subcontracting. We could move fairly quickly because they know where their “sweet spot” is.

They could possibly benefit from a joint venture with another public relations firm that serves the pharmaceutical industry and provides something other than crisis communication services.  That way both firms expand into related industries. They might consider strategic alliances with law firms that excel at risk assessment or confidentiality agreements. They could subcontract a firm that can translate sensitive messages into various languages. Or they could acquire a competitor with long term experience in crisis communication or healthcare clientele their firm has not attracted.

A web design firm posed the same question to us and the answers were not so evident.  They had resisted clarifying target markets, establishing core products/services, declaring geographic range, selecting their scale for projects, identifying the primary problems they solve, etc.  Without being centered, they could waste a lot of time and spend a great deal of money trying to do an acquisition, and then only end up with a tired Baby Boomer who is trying to eke out a little bit of money from his dying business.  How would they know how much they should invest in a subcontractor if it isn’t clear whether the services provided will be central to future growth or of marginal importance?

Before any deal can succeed, the leaders of the companies involved need to know who they are and where they want to grow. “No duh, right?” It is amazing how many times deals fall through or follow up falls apart because the individual companies weren’t centered before a relationship was explored.

It can help to use a CUBE to graphically capture your “sweet spot” to keep it in the forefront of your mind as opportunities come up. One axis could be the range of services/products provided. The second axis could convey customer size.  The third axis could convey target markets. Or you could define your sweet spot by challenges solved, geography served, or duration of contract. Where does your business stand along these various continuums?

 

Avoid Wishful Thinking and Presumed Conclusions During Deal Making

A deal is a sale with a non-customer. 

Some deals help your company acquire new technologies or capabilities more quickly than trying to develop it yourselves.  Some mergers and acquisitions are done between complementary companies to expand the product or service offering to better serve the best customers. Acquisitions can also be done to eliminate a competitor in an important market. 

I noticed that the lingering recession has led some tired entrepreneurs to consider acquisitions and mergers as a way to get relief from their intense schedules.  Unfortunately, this increases the vulnerability of the already tired entrepreneur.  Wishful thinking takes over, and the entrepreneur convinces him/herself that an acquisition can solve their problems.  Why not hire a strong “#2” and get centered again before considering any acquisition or merger? 

I have become convinced that acquisitions are like marriage.  When a tired single parent marries to “solve his/her problem,” new problems often develop.  Acquisition, merger, and marriage negotiations all seem to go more smoothly when each participant is centered.

But what do you do when/if the two entities don’t seem “centered”?  What if you thought you were negotiating a merger, and the other entity (key person) waffles, seems a bit too nervous, and withholds information? It pays to slow down and expand your view. Maybe the other person just wants to cash out and retire.  Maybe he/she had become bored. Maybe the transaction will only involve the purchase of assets so you don’t take on their debt or “people” issues.  Maybe you should only offer to pay a licensing fee and not purchase anything.  I’ve seen acquisition negotiations end in simple subcontracting arrangements.  We all know couples who concluded that they should just continue dating one another.

The best deals are when the leaders of two companies look for synergy (fit) and leave their options open…instead of starting the process assuming the answer will be an acquisition or merger. If there is not win/win fit, the title of the deal you don’t make won’t matter. It pays to leave the structure of the deal to attorneys.  Whether it’s a strategic alliance, a joint venture, an acquisition, a merger, an asset purchase, or something else isn’t the most important question.

 

How Do You React When a New Competitor Comes Into Your Niche?

You just launched a new product aimed at your niche market. You thought you had a great head start, but today you learned about a very similar product being promoted to the same niche by a new competitor.

So what is your reaction?

It’s amazing how many companies overreact and immediately shift their marketing and pricing. If your marketing campaign featured the language of a market leader a few days ago, wouldn’t you look a bit paranoid if you suddenly shifted to “challenger” language?  Why point out the limitations of the competitor’s product? If they are relatively new, they may not recognize their limitations, and you will just be teaching them how to compete against you. Why automatically lower your price?  If you are really tempted to do that, perhaps you need to improve your product instead.

Maybe the “new competitor” could actually become a resource for you.  Having a new competitor in your niche market may be an indication that you should speed up your product development cycle.  If the competitor has demonstrated an interest in your niche and a capacity to produce a high quality product, maybe it’s time to learn about their capabilities.  Who knows? They could become a subcontractor, a joint venture partner, or a candidate for acquisition…with you still in the leader position within your niche.

 

Stop Waiting for Teleseminars – Learn from Your Peers While on the Treadmill

Here’s a suggestion for busy Presidents/CEOs of midsized businesses (especially $20 – $200 Mil/yr) who

• feel that your time is STILL your scarcest resource
• recognize the need to feed your mind, learn, stretch, grow
• find relevant teleseminars but then can’t participate because they run at the same time you are involved in important meetings
• know you need to exercise but are going to the gym less often
• have been tempted to attend an Inc. Conference on Growth… 

Why not download free online radio shows onto your iPod to take to the gym? Take shows featuring interviews with your peers on the Inc. 500 list of the fastest growing privately held companies who are sharing success tips about the growth strategy-of-the-week. 

Most of you, the readers of my blog and Twitter tweets, know that I have been hosting a peer-to-peer-to-peer online radio show The Growth Strategist™ for 5 years now. We rotate through various geographic locations, industries, and growth strategies.  One week, my show might feature an interview with the President of a Singapore-based retail company that has grown through franchising. The next show may be with the CEO of a Kansas City-based manufacturer sharing success tips about how they’ve grown through acquisitions. 

Many of the guests on my show are on the Inc. 500 (or at least the Inc. 5000) list of the fastest growing privately held companies. They are bright, ambitious, somewhat intense, fabulous leaders….just like you. The show is #2 in its category and attracts over 180,000 listeners. 

I have LOVED hosting the show.  How can the discussion of growth strategies between people who actually live the journey EVER be boring?! 

I open each show with some tips on the growth strategy-of-the-week gleaned from my 30+ years of experience as a growth strategist helping midsized companies earn and keep their spot on the Inc. 500 while increasing their profitability. Many of you know that I have also won over two dozen national and statewide “entrepreneur of the year” awards for the resilient growth across 3 recessions of my own midsized businesses. So I share examples from my own journey as well. 

It’s been 5 years so my website, www.TheGrowthStrategist.com, and the station’s website (www.business.voiceamerica.com) now have over 200 downloadable shows (podcasts if you prefer) available for you to download onto your mp3 players and take to the gym.  Our research shows that most listeners do that or they listen to the show between 11:00 pm and 1:00 am as they do their last round of email “after the spouse and the kids have gone to sleep for the night”. The only reason you would break from an important meeting to listen to the live broadcasts each Tuesday at 11:00 am EST would be if you wanted to ask a question.  Most listeners send emails with questions to me and my guests following the shows. It’s NOT like traditional radio broadcasts where listening at the exact time of the live broadcast represents your only opportunity. 

Why wait for teleseminars when you can download 5, 6, …sometimes as many as 10… timely peer level radio shows focused on a growth strategy you are using or have been considering, including

• specialization
• diversification
• acquisitions and mergers
• franchising and licensing
• new products/new markets
• joint ventures and strategic alliances
• equity deals and IPOs
• several others….

I did a series of shows earlier this year about ‘HOW TO CHANGE YOUR BUSINESS MODEL” and another on “THE CHANGING IMPACT OF REAL ESTATE ON STRATEGIC GROWTH DECISIONS”. 

You can suggest topics, offer to be a guest, or recommend someone else you think might be an interesting guest.  The toll free number is 1-888-Aldonna and the email is Aldonna@AMBLER.com.

 

Bigger Ventures are More Possible During Recessions

One positive side effect of recessions is reduced arrogance.  We all seem to have more “situational permission” to not know what to do and not have all of the answers.  The sports-based phrase “levels the playing field” comes to mind.  We all have the chance to share information about market trends, customer problems, and the sources of dissatisfaction with competing products. 

Leaders of complementary companies are more willing to participate in strategic alliances and joint ventures during recessions.  It can pay to go after a project or contract that is larger than you would normally take on and share the risk across a few businesses. Some of the grandest shows presented in Las Vegas are a result of strategic alliances and joint ventures between a handful of companies that could not produce multi-million dollar extravaganzas on their own. 

Bankers, venture capitalists, and private investors may be more reluctant to take chances during the early stages of recessions.  But as a recession lingers, they tend to look more assertively for new ideas, sources of innovation, and bigger opportunities.  Think about it. “Laying low” too long is not conducive to the attraction of investors to a fund or members for their boards. Given the complexity of their due diligence process, it isn’t worth their valuable time to agonize over small deals,…, which is another reason for you to look for bigger ventures.

 

Make Sure You are Centered Before Exploratory Meetings

Entrepreneurs can almost measure the status of the economy by the frequency of “offers” to explore “mutual referral opportunities”.  Business people who wouldn’t return your phone calls or ever consider sharing commissions/profits are now more open to cooperation. This side effect of recessions can be great news, but it pays to take the time to stop and think before you accept a series of exploratory meetings that risk expensive distraction. 

Reviewing your answers to a few basic questions helps keep you centered. Where were you headed before they called you? Which target markets fit you best?  Which customer problems do your products/services solve? What is your brand promise that you will never compromise? Which large projects would you love to do if you just had more money?  What are your selection criteria for a joint venture partner when you take the initiative to reach out? With which complementary businesses would you like to be associated? 

When we are centered, we can hear ideas within a context, ask more relevant questions, and keep exploratory meetings at the peer-to-peer level. Recently, a regional accounting firm approached my strategic planning firm.  We welcome those discussions because helping mid sized companies continue to grow is important to both firms. We refer some business to a few legal firms that serve only Fortune 100 corporations, but joint ventures or formal strategic alliances are very unlikely between us and those law firms. 

I have also noticed that, when we are centered, a higher percentage of the exploratory meetings are with companies that are compatible with our strategic direction, regardless of who took the initiative to set up the meeting.

 

Technique to Recover from Budget Cutting Before Projecting Revenues

The media is using the “R” word to describe economic conditions, so it is very important to resist the knee jerk response to automatically combine the process of revising your short term operating budgets with the process of projecting your gross revenues for the coming year. Mentally, one is a minimizing process and the other is a maximizing process. It becomes a self fulfilling prophecy for failure when they are blurred together.
This year, insert another step to help your marketing and sales team shake off the damage done by the budget meeting. Before generating revenue projections, try asking your marketing and sales team to identify:
– 5 problems faced by their customers that may be inadequately addressed by competitors
– 4 customers that have more potential and haven’t been getting enough attention
– 3 competitors that could be vulnerable to bankruptcy or acquisition
– 2 niche markets they have always wanted to approach
– 1 big idea that the company would try if it had more money (that could be the basis of a successful joint venture)