growing into your business smart company 7 august 2014

GROWING into your business

Stories of success and failure

What do you want to get out of this morning?

So – who am I – and what might that mean for you?

How closely are you linked to your business?

The need to see strategic planning as a means to create a dividend yielding asset

IS GROWTH IMPORTANT?

• Depends on your plan for the business

• Depends on where the business is in its lifecycle

Traditional business life cycle

Sigmoid curve

Is strategy important?

“The secret of success is consistency of purpose."

- Benjamin Disraeli

What is strategic planning?

Strategic plan - alignment• People• Finance• Marketing• Sales• Operations

• Aligned and delivering value to customers who pay and help create value in your business

Strategic planning as a “cover story”

It’s all about execution

Some numbers*

50 4 2

Some more numbers**46 4 2

0%-5% 10%+ 25%+

An example – the importance of reporting and governance***

Revenue $2.123m $2.654m $3.815m

Gross margin $.871m $.375m $.910m

EBIT $.185m $.650m $.525m

Business Model Canvas

Focus as an entrepreneur• Focus on the problem you solve – what is your “market

offering”• Charge and collect on sales• Keep customers happy and the business generation model

working• Prepare cash flow and budgets• Monitor performance weekly and manage cash daily• Understand your value chain and the need to collaborate

Some personal experience

Metering Co. – what worked as we grew

• Industry undergoing significant change• Held our pricing model• Missed a lot of tenders – stayed at 30 people and $2m for longer

than we wanted• Recovered when competitors failed – grew to 200+ people and

$8m quicker than we wanted• Identified further opportunities to entrench market position• Successful exit – taken over by public company – still operating

Supply chain solutions – what worked

• Market change created niche opportunity• Large competitors targeted top 50 companies

– we targeted next level down• Built a great team and had fun• Managed cash carefully and had good

relationship with bankers and suppliers

A growth trajectory – Supply chain solutions

0

2000

4000

6000

8000

10000

12000

Revenue(ooo's)

Profit(ooo's)

Avoiding common traps• Have enough money to cope with growth – equity – suppliers –

clients - banks can help• Capacity constraints – systems and people – be prepared so you

can cope with extra workload• As your organisation grows it changes – be aware of what to

expect and prepare for worst case or back off – manage the downside risk to ensure survival

• Employ people who are good at what the business needs• Prepare for exit from day one – even if you never do

Some suggestions• Clear goals about what you do (and make the choice about

what you won’t do)• Be objective – get an advisory board/independent advice

in need• Know when to recruit - Hire right – people to do the job

not who you like – and get diversity in the company• Invest in yourself and your team

Useful helphttp://www.business.gov.au/Pages/default.aspx

Entrepreneurs’ Infrastructure Programme

Templates

Guide to range of Federal and State government initiatives

ResourcesBarry J Moltz You need to be a little CRAZYhttp://barrymoltz.com Michael Bungay Stanier Do More Great Work http://www.domoregreatwork.com Al Ries and Jack Trout Positioninghttp://www.ries.comJim Collins Good to Greathttp://www.jimcollins.comRobert Kaplan & David Norton The Strategy Focused OrganizationDr. Tom McKaskill Invest to Exithttp://www.tommckaskill.com/

Don’t forget our host (and sponsors)

http://www.smartcompany.com.au/

So what did I pick up today that is of use that I can take back to my business

and put into practice?

Thanks

Mike Sewell 0400 647 840

mike@marketgap.com.au

@marketgap