Monthly Archives: May 2011

Are Your Multiple Revenue Streams Delivering on the Promise of Resilience?

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You’ve heard it before. One way to grow a resilient business is to make sure it has multiple revenue streams.  But it seems to me that most companies don’t go far enough to achieve the goal of resilience. Most companies end up with multiple revenue streams that are so related to one another that the same staff members work a little on each revenue stream and the revenue comes from the same customers.  If the related services/products are not recession-proof, a slow economy has an adverse impact on all of the revenue streams. Is a ski shop resilient to changes in the weather just because it carries ski equipment, apparel, vacation packages, and sundries?

Consider the example of a professional speaker. There can be separate revenue streams for: fees paid directly to the speaker for keynote presentations at conferences or association events and speaking fees paid through speaker bureaus; the sale of the speaker’s books and CDs at the back of the room during speeches; registration fees for his/her public seminars; subscriptions, pay per click, and other techniques for on line purchases; and retainers for consulting, coaching, or facilitation services.  But if the speaker’s subject matter expertise is only needed during a strong economic season he/she will have the equivalent of a ski shop with no snow that year.

One lesson learned from seasonal businesses (like ski shops, ice cream stands, and swimming pool stores) is to fully embrace the reality.  They focus their energy on the busy season, are careful about staffing, and save some cash for the off season. And many have a second totally unrelated business that has the opposite pattern so they can be more resilient.  A Christmas tree farm owner may also own a garden supply company.  A law or accounting firm may have both wealth management advisors and bankruptcy attorneys.

Our various lines of business related to growth strategy (consulting, financing, search, and the weekly peer to peer show) have helped us continue to steadily grow year after year, but my diversification into manufacturing has been equally important to achieving resilience.

 

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 7th 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.

Everyone Is “In Play”

During a recent discussion with a prospective corporate sponsor, a very influential CEO shared that “these days, you can assume that EVERYONE is in play.”  This guy would know.

Wow, what a profound observation!

Look around. Industry leaders who seemed firmly entrenched in their roles are becoming association Presidents. Previously very independent companies are quietly seeking affiliation with larger organizations.  Regional CPA firms are launching new divisions by acquiring boutique consulting firms.  Leaders of some family owned businesses who lost their retirement nest egg in 2008 and can no longer count on the next generation to want to take over are now contacting business brokers, considering mergers, and even weighing dissolution.  Former football players are becoming Congressmen.

Everything being dynamic…in motion…is a symptom of this most recent recession’s extended period of uncertainty.  But as confusing as these changes may seem, it is a very good sign.  It means many people are tired of waiting.  They are no longer hoping the government will magically bail them out.  They are no longer defaulting to “just work harder” as the only possible strategy. They are no longer holding onto a pipe dream.  These folks are getting on with it!  YEAH!

Not all of the business model changes, consolidations, acquisitions, new divisions, and career shifts will work.  But it is SO much better than staying stuck, waiting for someone else to do something, losing too much money, or becoming depressed.

There are several important implications to this shift in behavior…including how it impacts your sales force. Prospects may not be accepting your sales person’s calls and your buying cycle may be stretching.  When the reasons for delays sound the same but your sales people can tell that they aren’t being told everything, they might be right. The prospective customers can’t tell your sales people that their companies may be sold.  They can’t admit that their CEO is leaving the industry.  They can’t reveal that they are in negotiations to become a division of a larger entity.

If you wonder if your prospects can’t be candid with your salespeople, it may be time for more executive-to-executive conversations. Or at least change your sales approach.  Some firms (like outbound call centers that set real sales appointments for their customers) provide important services that can keep customers afloat during periods of uncertainty or flux.  This may be the time to become more direct with stalling prospects rather than just wait for them to later tell you why they couldn’t talk more candidly.

 

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 7th 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.

 

Lessons Learned From Growing Family Dominated Community Banks

It is challenging to lead a privately held midsized business these days.  We are all impacted by this extended period of post recession period uncertainty. Even if you are excited and centered, your customers aren’t. Large corporations continue to hang onto their cash, which impacts their midsized vendors. Growth financing remains difficult to obtain.

Can you imagine how challenging it would be to lead a community bank these days? It doesn’t matter that they weren’t the cause of the implosion of the financial industry.  They are still required to retain much higher reserves because huge financial institutions were so highly leveraged. The word “bank” has become a four letter word.  The entire industry is under increased scrutiny.  Already heavily regulated, they are now subject to even more regulation.

What are the successful community banks doing to grow despite today’s challenges?

 

First, they have learned that if there was ever a time for the leadership team to move beyond squabbling (especially family), it is now. The leadership of a community bank must be able to easily obtain candid input from each functional area and be able to quickly make decisions without reverting to autocratic behavior. They simply don’t have time to wait for arguments between the generations.

Second, today’s challenges are cueing the first generation leaders to free themselves from day-to-day operations to focus on external dynamics.  The CEOs of community banks must lead their boards of directors, stay informed about money markets, keep eyes/ears open for possible investors, and always know where things are headed with the regulators.  Recessions and complex challenges often help stubborn succession problems get unstuck.

Third, they have learned that trust and integrity are excellent differentiators. Customers have become skeptical and must be careful how they spend their money.  Instead of laying low and waiting for the economy to improve, the successful community banks are stepping up to serve the customers who have lost faith in the larger institutions.

Fourth, the growing community banks recognize that the needs and expectations of busy customers keep escalating.  So they are investing in increased access, automation, and expanded options. Despite their size, community banks must provide a suite of services and products that are comparable to the huge competitors that caused the problems in the first place.

Fifth, the growing community banks are embracing comprehensive cultural change programs to ratchet up their marketing, sales, and service process, systems, and attitudes.  Take a look at the success rate of The Emmerich Group’s community bank clientele.

 

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 7th 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.

 

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