Blog | Ambler

Don’t Give Up on Geographic Expansion if You Aren’t Feeling Wealthy

Published February 23, 2012

Several of our B2B clients are convinced that organic growth is THE only way to go as they expand into other locations. These companies establish research budgets to identify places with the best potential and surface people within their industry who know the target towns and want to be their employees. The corporate headquarters owns the physical assets of the branches (buildings, equipment and inventory), provides administrative services (accounting, human resources, legal), pays for the overhead, and supports marketing. Corporate headquarters also provides reasonable base salaries for the new branch managers, business plans, and incentives based on generating gross profit.

Several other B2B clients swear by geographic expansion through acquisition. Instead of trying to find completely new areas and guess at the potential, they look for underserved towns. Instead of looking for people who view themselves as employees, they look for people who have exhibited some entrepreneurial traits. Those local entrepreneurs usually have established customer bases and gained positive reputations, but hit plateaus. Having a larger corporation fund inventory, marketing, and administrative costs provides the boost the entrepreneurs need to keep growing. The entrepreneur trades some of his/her independence for the money paid for physical assets and a head start in the town. But the past few years has brought financial challenges for even the most experienced executives of privately held midsized companies. What can you do if you want to expand geographically but cannot afford to do organic growth or acquisitions?

The relationship between local and corporate leaders is at the top of the list of success factors when it comes to geographic expansion so it’s important not to waste time wondering whether the relationship will be called a joint venture, a merger, an equity deal or franchising. We have found that once the parties involved have a non disclosure/non-compete agreement signed, it helps to assign responsibilities for each line item in the financial statement…one row at a time. The discussion that flows from such a process is absolutely fascinating…and the resulting summaries of responsibilities provide sufficient information for your attorney(s) to tell you the type of deal involved.

We are currently helping a few clients with this process. With one company, their new branch in the northeast will involve a joint venture and their new branch in the southeast will involve an equity deal.

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 clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieve accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search. 2012 is Ambler’s 8^th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show 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. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

Posted in Acquisitions, Geographic Expansion | Leave a comment

JOINT VENTURES – THE TIES THAT BIND

Published February 16, 2012

You and a key vendor (Vendor A) conclude that if you work together to create a tailored version of a product/service, both companies will be able to make a lot more money. So you both invest the time, money, and effort to do that and it starts to pay off. You also agree that Vendor A can’t sell the new product to your competitors in return for your investment in them and your marketing/sales efforts to bring them more business.

Was this a loose strategic alliance? Or was this a firm joint venture?

Here’s the test.

Your business does well. You are now attracting even more demanding clientele and you are wondering if Vendor A can keep up with you and your new larger clients. A competitor of Vendor A has approached you and Vendor B’s product seems a lot better. Plus Vendor B’s commitment to growth seems a lot stronger than Vendor A’s.

Should you and can you switch vendors? Ethically? Legally? Practically?

What did your written agreement with Vendor A say about that?

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 clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieve accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search. 2012 is Ambler’s 8^th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show 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. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

Posted in Joint Ventures, Strategic Alliances | Leave a comment

Is There Any Such Thing as a Truly Silent Partner?

Published February 9, 2012

To scale an incorporated career to become a genuine enterprise, business owners often seek growth funding from their relatives and friends. That makes sense because private investors often ask for evidence that the business owner has already put up his/her own money and asked his/her relatives and friends to step up. Plus the interest rate is usually lower with relatives and friends than bank financing. And hopefully the relatives and friends won’t demand quite as much control or return on their investment as venture capitalists do.

But then again, it may not be a favor that some relatives and friends don’t immediately make demands. Their silence can be misleading. Try not paying them back or providing positive ROI (in about the same timeframe as the banks or VCs, by the way) and previously silent partners tend to become very vocal. I know a few situations where the majority owners have given themselves big raises or bonuses and haven’t provided any profit sharing for minority owners in YEARS. Not surprisingly, those business owners didn’t want to show us their partnership agreements when we were invited in to help with strategic growth planning.

For a long while, I agreed with many business owners when they would rail against venture capitalists. “I don’t want money from those vultures! They’ll want to tell me what to do and it’s MY business!” My 40 years of helping midsized businesses keep growing has shifted that view because one of the benefits of outside financing is the participation of expert(s) on a company’s board of directors who actually hold the business owner(s) accountable for a reasonable return on investment. In many ways, if a business owner only wants to do what he wants to do and can’t hear advice from informed people, that business owner hasn’t grown past the mindset of an incorporated career and may not deserve growth financing (from a bank, a venture capitalist, a relative or a friend).

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 clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieve accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search. 2012 is Ambler’s 8^th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show 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. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

Posted in Finance | Leave a comment

Disillusion

Published February 2, 2012

Disillusion. What a fascinating word. How many Baby Boomer business owners do you know (perhaps yourself?) who have become disillusioned?

The recession and the long period of uncertainty that has followed. It looks like the underlying causes of the implosion of the financial industry in 2008 haven’t been addressed let alone resolved. Government officials haven’t risen to the occasion and done the jobs citizens pay them to do. Disillusion.

International competition. Most Baby Boomer business owners recognize globalization. But how does a privately held US based company compete with a business based in China where the hourly workers are paid so much less and work so many more hours without overtime rates involved? Disillusion.

Advances in technology. Oh it’s great to participate on a SKYPE call with your grandchildren who live on the other side of the country. And Wii bowling is fun. Getting movies through Netflix for your flat screen HD/3D television is a pleasant perk. But on the business side, technology keeps raising customer expectations and the EXPENSE, the constant training, the disruption, and the bottomless pit of change related to IT can be very discouraging to a Baby Boomer owner of a privately held midsized company. Disillusion.

If it is a family owned business, the next generation doesn’t seem to want to learn leadership skills or work hard. They don’t seem ready or as interested in taking over the family business. An unfulfilled life plan. Disillusion.

There are solutions to this situation. They all begin with the Baby Boomer owners doing some self examination to admit how disillusioned they have become. Plus, in many cases, they would need to be willing to be a whole lot less stubborn. Less pride and less secrecy. The rules have changed and continuing to run a business in a state of denial won’t help.

My prediction? There will be a SPIKE (huge rise) in the number of (formerly midsized) businesses being dissolved in a few years. Unaddressed disillusion leads to dissolution.

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 clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieve accelerated growth with sustained profitability® through opportunity & resource analysis, strategic planning, executive advisory services, growth financing, and targeted search. 2012 is Ambler’s 8^th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show 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. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

Posted in Recession, Succession Planning | Leave a comment

The Secret is to Reverse the Phrase

Published January 26, 2012

Each week I close my peer-to-peer talk show with presidents of midsized businesses with the same message: “My wish for you is accelerated growth with sustained profitability®… and remember the secret is to reverse the phrase. First, you need to know what drives your profitability. Second, you must have a system to sustain that profitability. THEN, you can consider growth strategies like acquisitions, geographic expansion, franchising, or whatever. And fourth, you can step on the gas to accelerate.” Apparently, that concept needs to be reinforced in my blog.

Here are some examples. Suppose your company specializes in content management for large websites, and you view one specific program/language as the superior choice. You now lead with that software not just content management or websites. That one decision says that what drives your profitability is your ability to attract website projects that would be best served by the language you have chosen. If/when there is a great fit between the projects and your language, you can charge premium pricing. To sustain that profitability, you will need a marvelous system for recruiting, training, paying, supervising and retaining programmers who also believe in the language you have chosen. Until you can do that, several growth strategies will feel out of reach. The techniques you’ll consider will be survival strategies, not growth.

Let’s try another one. Suppose your company has an approach that dramatically improves your customers’ sales results. That’s pretty exciting, right? Perfecting the approach drives profitability for a while, but if you don’t find a way to protect your intellectual property (IP), your profitability will decrease due to copy cats, pirates, thieves (whatever you want to call them these days). If you do address sustainability, you can quickly move into growth strategies like licensing or franchising. It’s a “compliment” when people want to use your “stuff.” So instead of getting mad at that, make sure they pay for the privilege.

Posted in Strategic Planning | Leave a comment

Face the Risks of Suddenly Being Viewed as a Family Business

Published January 12, 2012

As specialists in the strategic needs of privately held midsized companies, we naturally interact with lots of family owned businesses. There has been more than one government study that has said that the owners of 90% of all privately held companies view their companies as “family businesses.” That’s a lot! Some owners claim they are “family owned” even when only one member of the family is involved. No spouse, sibling, offspring, cousin or even an in law employed in the company! WOW.

It makes you wonder what is meant by “family business.” In some folks’ minds, “family business” means trustworthy, hard working, stable, community minded, friendly, and focused on customer service.

But what does “family owned and operated” mean to prospective employees? It can mean that their careers will be limited. They may assume that they will never be eligible for profit sharing, could never become an equity shareholder, will never be viewed as a top executive, and will never fully have the president’s ear. It could mean that they should always be prepared to have some young kid brought in to become their boss. Being the boss’s son or daughter trumps any advanced education, job experience, or longevity with the company they may have.

If your business is family owned, it takes intentional effort to convey your policies about career advancement opportunities, your logic behind hiring and promotions, etc. It can be difficult to attract top talent if you can’t tangibly demonstrate that you value “outsiders,” are open to having business partners who don’t share the same last name, and use contribution to guide profit sharing rather than genetics.

We were reminded about these kinds of issues recently when a company (now a client) inadvertently slipped into being viewed as a “family business.” The president had needed some help with the firm’s marketing and had asked his very capable wife to help. He couldn’t figure out why his key employees were acting funny, seemed defensive, were suddenly worried about their futures, questioning his decisions, etc. He knew he was still the owner and their boss. But the key employees had assumed the premise of the business had changed. If your company is a “family business,” make sure you know why and address the negative implications as well as the positive. If not, be careful you don’t inadvertently slip into becoming one.

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. Ambler is in the process of launching her 8^th enterprise. All of her current service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, and search) help privately held midsized companies achieve accelerated growth with sustained profitability®. 2012 is Ambler’s 8^th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show 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. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

Posted in People | Leave a comment

Prevent Slipping into Reactive Management as 2012 Begins

Published January 5, 2012

At the risk of sounding like I am channeling my inner Jean Dixon, here are a few of my predictions for 2012:

The world economy will have another significant setback in 2012 sparked by disappointments about the pool of candidates for the US Presidency, a few large scale unsettling scandals, increased unrest in the Middle East, and major corporations continuing to hang onto their cash.
More Baby Boomer business owners will move past the inertia of 2009 – 2011 to acquire, merge, or sell their businesses.
Google’s purchase of Motorola will pay off as APPLE’s growth slows.
Since the days of Nostradomus in the 1550s, this year has been the focus of doomsday thinkers. Unfortunately, too many people will over-react with each natural disaster in 2012.
The transition of leadership in North Korea, the instability in Iran, and the nuclear capabilities of both will increase in importance in 2012.
The “War on Childhood Obesity” will gain momentum in 2012 as more schools embrace Rachel Ray’s menu and First Lady Michelle O’Bama’s advice.

A few may seem obvious to you. A few may seem uninformed or just wrong. If my predictions prompt you to think, this blog has provided a service to you. I wonder what impact these and other developments could have on your business strategy and contingency planning for 2012. Should you conclude that you should be the bold acquirer or a reluctant seller? Will you increase your emphasis on wealthy or impoverished people? Knowing that true wealth has always been traced back to times of stress and recession, will you be an industry leader or drop below the radar? Does your executive team need to do anything different to prevent your company from becoming too reactive in 2012?

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. Ambler is in the process of launching her 8^th enterprise. All of her current service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, and search) help privately held midsized companies achieve accelerated growth with sustained profitability®. 2012 is Ambler’s 8^th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show 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. An archive of over 300 interviews is available at www.TheGrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

Posted in Strategic Planning | Leave a comment

2011 Was a Tougher Year for the Owners of Midsized Companies and Recent Retirees than the News Media Portrayed

Published December 29, 2011

Deep down, we all know that broadcast and print media have some biases. (No kidding.) During election years, some media outlets are compelled to emphasize progress being made, jobs being created, and consumers spending more around the Holidays. Following recessions with particularly long periods of uncertainty (NOW), some reporters play the role of consumer advocate to help unwitting buyers beware of high profile crooks. While the US Congress and President Obama took different stands on raising the debt ceiling in 2011, the media focus seemed quite partisan.

So why am I reminding you about media bias?

In the midst of all of the political infighting and fussy stories about progress, the personal portfolios of owners of midsized companies and recent retirees took a disproportionate hit during the summer of 2011. For many, 2011 was as bad as 2008. That fact got lost in the media coverage. So if you lost a lot of money in 2011, you could be wondering if you were cheated somehow instead of feeling “normal.”

Imagine if your investment portfolio of $10 Mil dropped 30% in 2008 to $7 Mil and then it dropped another 30% in 2011 to under $5 Mil. People in that position thought they could stop working and turn their family businesses over to the next generation but now feel compelled to continue to work to replace lost money. Folks who retired from corporate management positions after 30+ years now wonder if they can afford to keep the house at the lake. Instead of investing in real estate, businesses, new products, and nice vacations, these people are worried and frozen. This has a direct impact on job creation.

I also mention media bias because many of the people who lost large sums of money in 2011 (maybe you) wonder if you did something wrong, have lost some trust in your advisors, and feel stranded. That combination of emotions stifles economic recovery.

If my words resonate with you, give your financial planner a call. Get explanations. Revisit your personal financial plan. Base your decisions on real information rather than just worry.

Isn’t it interesting that a strategist who helps companies grow is suggesting that you request an appointment with your personal fee only financial planner. Mental attitude in one arena impacts the other.

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 which 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.

Posted in People, Recession, Strategic Planning | Leave a comment

What to Do About Drift, Scope Creep, Unfinished Projects & Ineffective Messaging

Published December 22, 2011

Don’t feel bad if your company has drifted away from its strategic plan. Tough economic times can do that. Recessions invite worried sales people to agree to whatever price they can get any prospect to accept. Uncertainty can lead product development initiatives down several paths only to end up with unfinished projects. Insecurity cues marketing messages to become broad based, safe, generalized and ineffective. Service minded employees trying to accommodate today’s demanding customers quickly leads to scope creep on contracts and reduced profitability.

The operative words are worry, uncertainty, insecurity, and accommodate. That mindset leads to drift, reduced effectiveness, scope creep, and lowered profitability. If you are experiencing this phenomenon, you are normal…and the good news is that it’s curable.

Convene your management team to review updated data about the various subgroups within your customer base. Your company’s “sweet spot” may have inadvertently shifted. Maybe in the past, your company was most effective and generated the best profit from small business accounts. Perhaps now, you should focus on medium sized businesses. Maybe in the past, you could handle five distinct industries; and realistically, you now need to drop one and focus on four. Maybe the range of products/services just needs to be brought back into a smaller range so you can be more efficient, handle the risk, and feel a sense of accomplishment.

These “Let’s Get Re-Centered” sessions need to happen more frequently during tough economic times. What’s going on in the European economy does impact customers in North America. The politics of the Middle East influences decisions in South America and Asia. Technology in Australia matters to companies in Africa.

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.

Posted in Improved Customer Service, People, Strategic Planning | 1 Comment

Should You Assume That ALL of Your Customers are Uneasy?

Published December 15, 2011

A pattern has been surfacing recently from the interviews we conduct prior to on-site strategic working sessions for/with the clients of my growth planning/strategic advisory firm. We are hearing from our clients’ customers that they:

want to be contacted BEFORE a question would even come up
don’t like the expectation that they will do the traveling for appointments
don’t want vendors to get defensive or take their questions too personally
want more one-on-one interaction and more individualized services/products
expect more understanding, compassion and empathy
are not very interested in the vendor’s feelings, needs, personal life or goals
need bright vendors but won’t tolerate arrogance

It’s no longer enough to say that your firm is responsive and brag that you return customer calls quickly. They don’t want to have to call you. They want and expect you (and me) to PREVENT their ignorance, concerns, and uneasy feelings.

This extended period of uncertainty following the recent recession has had an adverse impact on just about every market. The obvious sectors include construction, real estate, banking, and wealth management firms. But uncertainty has been unsettling to customers in other industries. We feel it. Even our most ambitious clients now want to review the details of our research findings, request multiple presentations of our recommendations, and need repeated fact based reassurance. Some would like to demand guaranteed revenue growth and net profit levels.

If your business is related in ANY manner to the shifts in the economy, stock market, political winds, etc…take a fresh look at the tone and frequency of your communication with clients/customers.

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.

Posted in Improved Customer Service, Recession | Leave a comment