TriState Capital Bank is the fastest growing privately held bank in the country. Think about that. The financial industry is under the greatest stress at the moment, and those guys are fast tracking toward $2 billion. It can’t help but make you think about what you are doing.
Commissions are clearly involved when I help obtain growth financing, but over the years I have resisted several other commission-based relationships because I/we need to remain objective. With this recession, there are businesses that need me/us to analyze their companies and strategic direction, but truthfully the leaders really are not receptive to hearing anyone’s advice at the moment. They just need some relief in the form of new customers and more orders. This fairly large subgroup sounds like they value my network, my contacts, and who I know more than what I think. It is an interesting shift for someone who has been brought in to provide insight, new perspective, opportunities, and easier ways to attract profits.
There is a clear cue here for me to consider the establishment of different relationships…which means a different business model. I need to be careful not to create conflicts of interest, so I have reviewed the code of ethics documents from each of our certifying organizations (NACD, IMC, NSA, WBENC, NASW, etc.). I am quickly categorizing which organizations are eligible to be partners in strategic alliances, joint ventures, equity deals, commission deals, barters, etc. The negotiations involve a long series of phone appointments, voice mails, emails back and forth, drafts, revisions, etc.
Now, pause for a minute. My situation is not that different from yours.
What if your business is too dependent on credit lines from the major financial institutions that are more fragile than your business? What if your customers say they need your products/services but clearly do not have the cash to pay your required deposit? Those are cues to at least consider other options like bartering, commissions, equity deals, strategic alliances, joint ventures, etc. Don’t forget that premiums and incentives can be built in as well as penalties.
For more information, see my 2/11/09 blog or log on to my weekly online radio show The Growth Strategist™ at VoiceAmerica® Business or www.TheGrowthStrategist.com for my interviews with the CEOs of midsized companies in my four part series on “Changing Your Business Model.”
How you respond to the arrival of the annual industry benchmark survey report conveys a great deal about who you are as a leader.
You ignore it. Right?
But think about it. If only the companies that have been doing well complete the survey, isn’t this the year you would need that information more than ever? And how difficult would it really be for you to throw out the obvious errors in the data to see the important patterns in the benchmark survey report? If you wouldn’t be willing to do that level of analysis, what else are you probably missing? And shouldn’t you be the role model for looking for information to guide important decisions? Wouldn’t it help the members of your executive team if they learned how to identify comparable companies and look for the important ratios that helped them achieve superior results? Don’t you need to know if return on total assets or inventory turns or gross revenue per employee or something else are your most important ratios to increase net profit?
This year, share your industry benchmark survey report with the members of your executive team. Ask your marketing and administrative executives to identify the important ratios that seem to lead to the best results. Then ask your VP Operations to propose a plan for your company to achieve those ratios. Ask your VP of Sales to bring the list of the biggest challenges facing the 20 top prospects. And then ask your entire team to look for ways to help your prospects solve those challenges while achieving the desired ratios. This is the type of executive level thinking that all too often disappears during recessions and it is exactly what is needed for your company to survive and thrive.
And it sure beats avoiding important information and permitting your team the luxury of whining about how difficult things are these days.
|1/13/2009||The first in the series, learn why and how real wealth is made during recessions. Also, learn some tips to stay centered, make good decisions and capitalize on opportunities unique to recessions.||mp3 file|
|1/27/2009||Drew Morrisroe, President of CTN Solutions, shares how his team converted their people-intensive project business into a recurring revenue model. Hear why 4Q08 was their most profitable quarter and why they are now in a position to acquire and court outside investors. You can hear part two of Drew’s interview on 2/17/2009.||mp3 file|
|2/3/2009||Tom Bracken, a 40-year banking veteran, shares how Tri-State Capital Bank has quickly become the fastest growing independent bank in the US. Listen how they broke the mold and have no retail branches to work directly with midmarket businesses and high net worth individuals looking for loans and deposit accounts. Hear how Tri-State have quickly grown their loan portfolio to $2 billion by leveraging new technologies and entrepreneurial spirit.||mp3 file|
|2/10/2009||Ron McFarland, long time listener who brings 20 years of experience with large and medium Japanese companies, illuminates the differences in how Japanese and American corporations approach business model changes during a recession.||mp3 file|
The recession has most people worried about sales and cash. So brace yourself. The tension is being passed along to each of us…big time!
These days, your prospective client will have agonized for weeks, had to talk over a potential purchase with his/her spouse, business partners, advisors…and…yes, the dreaded bookkeeper!
By the time your prospects send you e-mail or call you, their hearts are pumping. The clock is ticking faster and faster. They want to finish transactions IMMEDIATELY so they can just tell the naysayers around them to back off because they can’t do anything about the “done deals”.
Yeah, yeah, yeah – We GET IT! We are in a recession. The freefall started well before the collapse of the large Wall Street investment houses in September 2008. In the late 1990s, the dot.com bubble burst, and now in the late 2000s, the housing bubble has burst. The precise timing depends on which economist you ask. (Note: Do not ask an economist to tell you ANYTHING these days. You’ll just be hit with a string of “I told you so” or very corny “what’s the difference between an economist and an accountant?” jokes.) The US auto industry has been headed in the wrong direction for SOOO long. Just ask my brother, who had been a GM engineer for over 30 years.
Let’s be careful with our financial decisions, but let’s also be careful not to make the situation worse by freezing. Trillions of dollars are still in play. Even if the unemployment rate hits the ridiculous 10% level, let’s also keep the 90% in mind!! Customers still need food, lodging, clothing, education, transportation, healthcare, light bulbs, accounting services, car insurance…
The complaints of customers provide valuable guidance to direct your product innovation and marketing campaigns. As business people, we need to listen to what our prospects and customers still need and step away from the gloom and doom reports on television.
This recession has made many of us so jumpy that we are inadvertently insulting the very people who can help us the most. Think about it: the PONZI schemes, the subprime mortgages, the SEC not overseeing Wall Street closely enough, the CEOs of the auto manufacturers traveling to DC assuming they would get bailout money without a plan. It’s enough to make anyone become distrustful, but we really need to be careful and not lump everyone into one big pool of presumed crooks.
In my role as an intermediary helping companies obtain growth financing, I can’t help but notice how folks come across. One gal who has a product that definitely warrants investment, has wasted the last six weeks nitpicking the terms of a simple, straightforward commission only contract that has been the standard in the industry for the past 20 years. She is telegraphing to me that she is too desperate for money and worse is not willing to take the time to check out my reputation and learn if I am to be trusted. She is shooting herself in the foot. If I do ever take her business plan to prospective investors, I would have to recommend that they change Presidents because she thinks too small and probably wouldn’t listen to their advice. It’s a shame.