Does Your Company Understand Growth

7/29/2019 Does Your Company Understand Growth

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Business Growth FactorsDoes your company understand growth?

Our mission at Business Growth Partners, Inc. isto design, develop and implement managementsystems for both short- and long-term growth.

Business Growth Factors, Inc.

9/14/2012


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Business Growth Factors, Inc.

PO Box 39

Buffalo, New York 14231

1 (888) 285-4602 Toll-free

[email protected]

Does your company understand growth?

Our mission at Business Growth Partners, Inc. is to design, develop andimplement management systems for both short- and long-term growth.

Manufacturing & Assembly

Faced with the need to continually innovate products and services while improvingproductivity with their existing lines, manufacturers face unique challenges to growing

their business. The research and development time to get a product to market also

creates the need for a high degree of market awareness to stay ahead of the

innovations curve and not be blindsided by the competition. Business Growth Partners

Inc. professionals know how manufacturing works and can help you meet those

challenges. By identifying your particular strengths and weaknesses, exploiting

emerging niche markets and creating a company-wide approach to your growth, we willhelp you implement the objectives to increase the value provided to your customers

and ensure your future growth.

Retail

Retail growth probably has a wider array of strategic approaches than any otherindustry sector, from market positioning and multi-channels to e-business and

franchising. Retailers continue to face the challenge of offering improved customer

service, managing channel complexity and introducing new technology, while reducing

costs and prices. Knowing where and how to compete ensures that the most valuable

markets are being targeted.


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Service

The foundation for the growth of any service business is its people, upon which is built

the leveraging of talent to communicate, interact and deliver value to its customers.The challenges of competition are particularly daunting in a capitalist economy

continually moving to services, where the technical barriers to entry have come down

dramatically in cost, and where the internet affords incredible efficiencies for both start-

up and established businesses. Whatever operational, training and customer service

solutions may be applied, the delivery of services is always challenged by the demands

of a more sophisticated customer.

Wholesale & Distribution

The wholesale distribution industry, while well-established in our businessinfrastructure, continues to face challenges to its basic business models. A widely held

perspective is that the internet has made incredible inroads into both the input and

output of the wholesale-distribution chain. Sophisticated users with access to

information that is no longer the domain of the wholesalers, continued growth of fee-

based services, and competition from logistics companies, are all indicators of the rapid

change requiring the industry to continually innovate to achieve minimal growth.

Many factors have an impact on your firms profitability and growth. To help youmake the best possible choices, our experience and in-depth knowledge offer a dynamic

approach that focuses on the specific needs of companies anticipating or experiencing

strong growth. We build a solution which takes into account your current stage of

development, existing resources, and capacity for growth.


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Background

The origins ofBusiness Growth Partners, Inc. date back to 1984. At that time, the

companys founders, Dr. Jim M. Namaste and Thomas Grifasi, were each engaged inother endeavors but found a common interest in understanding how small businesses

became larger ones. Having experienced both success and failure in their careers, they

commenced a long-term investigation into the Research and Development of a small

business success methodology. Seeking answers to Why do companies fail?, Why do

companies succeed?, and What are the elements of management, marketing and

money that make the critical difference?, has led to todays Business Growth Partners.

Defining the Need

The BGP model has been built to meet both the demand and the conditions underwhich small business owners need professional assistance: Deliver a high level of

expertise in a timely fashion at an affordable price. As we have come to understand

through exposure and interaction with a myriad of business types, executives of small

growth companies who desire professional assistance the most are often the least able

to afford it and yet need it immediately. Their human and financial resources are

typically stretched to the limit getting to their current stage of development.

Business Model Rationale

To meet this need, Business Growth Partners built a management consultancydifferent from most traditional firms. In order to deliver high quality service, we

recruited experienced professionals with a strong background in their respective

disciplines and with substantial exposure to management practices in various business

growth situations. This is why we use the term Consulting Managers to reflect both

strengths. In order to deliver our services at an affordable price, our Consulting

Managers are independent consultants, most of whom maintain their own practice, thusavoiding the ongoing expense of a high-level payroll to maintain a full compliment of

professionals at all times. In order to bring assistance to demanding growth businesses

in a timely fashion, there is redundancy built into the disciplines and expertise

represented by our Consulting Managers, so a qualified professional can always be

assigned without delay.


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Testimonials & References

I have worked closely with BGP for nearly two years. Perhaps their greatest contributions

come in the form of assistance with strategy and planning. Theirs is a unique perspectiveabout growing a business which is clearly derived from plenty of hands-on, in the field

experience. I should also add that their integrity and business ethics are of the highest

quality. I can recommend their work and ability to make a difference without hesitation. I.

Gibson, CEO, Wintara, Inc., Washington, DC

I wish I had run into you guys back in August or September. You are by far the most

professional organization I have had contact with-keep in mind that I have had varying

degrees of contact with the likes of Hummer Winblad, Kleiner Perkins and Idealabs. S.

Minkus, President, DVG Ventures &Consulting

For the last few years, we have been actively engaged in using the Internet to sell and

market our products and even our common stock securities. We are very pleased with the

modifications and strategies that were brought to us to implement and test. We have found

the principals to be completely forthright and honest in their business dealings. E.

Palmer, CEO, SolarAttic, Minneapolis, MN

I have been associated with the founders of BGP for over two years, first as a client and now

as a business partner in a separate business venture. The vision and organizational skills that

they continue to bring together to help business people with all kinds of businesses is next to

none. I am proud to be associated with them and look forward to a mutually prosperous

future. Steve Erickson, CEO, Net Distributor Express, Inc., Grand Junction, CO

We have always been extremely satisfied with the services provided by BGP, and we would

be interested both in referring your services to our clients and in utilizing them for our own

benefit. Your dedication and technical expertise you have brought to consulting assignments

has had a substantial impact on building a strong foundation for our regional economy. H.Sicherman, CEO, H. Sicherman &Associates (for regional IDAs), Amherst, NY

Thanks to Business Growth Partners for all you have done! With your plan, guidance and

expertise we have now put our plan into action and we are starting to see the fruits of our

labor. BGP knew just what we needed. Without Business Growth Partners we would probably


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still be on the drawing board! B. Andrews, President, Fifty States Realty, Inc., Grand

Island, NY

Management

Thomas Grifasi Co-Founder, President & CEO

Specialty: Strategic Planning

Experience: Strategic Planning; Entrepreneurism; Management Coaching; Operational

Development

Snapshot: Tom brings over 30 years business ownership and management experience

with a unique ability to identify and analyze problems related to the interaction of

management disciplines.

Dr. Jim M. Namaste Co-FounderSpecialty: Strategic Planning

Experience: Strategic Planning; Entrepreneurism; Marketing Communications;

Internet Technology

Snapshot: Jim brings 25 years business experience, with a particular emphasis on

applying the principles of long-term development to SMEs.


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Stephen Hussak Director of Marketing

Specialty: Marketing Communications

Experience: Marketing; Product Management; Six Sigma

Snapshot: Stephen brings 17 years experience in marketing and sales management,

with a particular emphasis on developing both meaningful and long-term customer

relations.

Jeffrey R. Jones Business Development Manager

Specialty: Business Development

Experience: Sales and Territory Management; IT Consulting and Implementation

Snapshot: Jeff brings over 10 years business-to-business development experience,

Including development of channel programs and building sales teams.


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Senior Strategists

Barry Bender

Specialty: Strategic Planning; Finance & Accounting

Experience: Strategic business analysis and planning; financial analysis

Snapshot: Barry brings 25 years of varied experience to our clients, including

managing and delivering training programs, managing technical documentation

projects, investment analysis, and consulting experience.

Michael Damian Billy

Specialty: Strategic Planning; Management & OperationsExperience: Operations Management; Human Resources; Marketing Strategy

Snapshot: Michael has over 30 years experience in multi-dimensional, cross-functional

marketing and strategic planning, including concept and product development, team

and culture building.


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William T. Homan

Specialty: Strategic Planning; Communications &Marketing

Experience: Marketing strategy; technology integration; customer focus.

Snapshot: Bill brings over 25 years business experience as a corporate executive,

entrepreneur, and management consultant. He specializes in business performance

improvement, with a focus on teaming with stakeholders to resolve mission-critical

issues.

Richard D. Jones

Specialty: Management & Operations

Experience: Manufacturing & Distribution Operations and Marketing; ESOP Programs

Snapshot: Rick brings 30 years experience in manufacturing and distribution

management, including operations improvements, employee development programs,

ESOPs, product development and marketing..


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Rene Vishney

Specialty: Strategic Planning; Management & Operations

Experience: Strategic Planning; Industrial & Internet Marketing Strategies;

International Business; Market Analysis & Strategy

Snapshot: Renes 25 years experience emphasizes effective management and

leadership, strategic planning, and policy and procedure development and includes the

successful creation of sales and marketing organizations.

Consulting Managers

All of our Consulting Managers are multi-talented with years of exposure to thecomplexities of business management. To see the full biography of each professional,

click on his or her name.


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Business Technology & Methods Specialty

Crean, Maureen R.

Specialty: Business Technology & Methods

Sectors: Service; Retail

Experience: Executive Team Building & Coaching; Start-up Development; Internet

Technology; Management Information Systems; Intellectual Property

Snapshot: Maureen brings 22 years experience in Strategic Planning and has

effectively led hundreds of individuals in creating teams that successfully implement

management strategies and accomplish organizational goals.

Higgins, Kevin B.



Experience: Internet Technology; Management Information Systems; Intellectual

Property; Process Engineering

Snapshot: Kevin brings 27 years experience in technology management, creating and


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managing technology solutions, IT turnarounds and upgrades in a broad spectrum of

industries.

Moore, Allen H.


Sectors: Manufacturing & Assembly; Service

Experience: IT, MIS, Knowledge Management

Snapshot: With 32 years experience, Allens expertise lies in business process

improvement, workflow automation, organizational workflow and dataflow design,

system user interface design and change management.

Smith, Raymond W.


Sectors: Retail; Service

Experience: Internet, Computer & Management Information Systems; Integrating

Business & Marketing Strategy with Technology & Operations; Product Management

Snapshot: Raymond brings 30 years experience in marketing, product development, it


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and strategic business development in a wide range of environments, from start-up to

fortune 10 companies.

Westlake, Edwin


Sectors: Service; Wholesale & Distribution

Experience: Computer Information Systems; Internet Technology; Operations

Management

Snapshot: Edwin brings over 20 years technology and management experience to our

clients including over seven years of e-commerce.

Wisniewski, Edward

Specialty: Business Technology & MethodsSectors: Manufacturing & Assembly; Service

Experience: Computer & Management Information Systems; Data Security & Disaster

Recovery; Computer Facility Planning; IT Policy & Procedure Development

Snapshot: Ed brings 40 years experience in data security design and management,

systems development and analysis in banking, manufacturing, and health care.


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Consulting Managers



Communications & Marketing Specialty

Akers, Dennis L.

Specialty: Communications & Marketing


Experience: Industrial and International Marketing Strategy; International Business

Snapshot: Dennis brings 32 years experience in marketing, product development,

sales, engineering, quality and operations in entrepreneurial as well as Fortune 100

companies in the U.S., Europe, Asia and the Middle East.

Bartels, Mary E.



Experience: Marketing Planning, Strategy, Modeling &Management; Operations


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Management; Call Center Development & Management; Website Management;

CRM& PR Management

Snapshot: Mary has extensive experience managing sales, marketing, operations, and

personnel for both start-up and industry-leading companies, and is proficient in

systems design and implementation, new business development, and business processimprovements.

Coman, Hilary C.


Sectors: Retail; Service

Experience: Marketing Strategy; Models & Applications; International

Marketing & Business Development; Market Entry & Maximization; Latin America

Expertise

Snapshot: Hilary brings over 14 years experience in designing and implementing

marketing plans in the national and international arenas, covering the full spectrum

from research to product planning and entry strategies.

Helmeke, Todd M.


Sectors: Manufacturing & Assembly; Wholesale &Distribution

Experience: Industrial & International Marketing Strategies; International Business;

Mergers &Acquisitions


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Snapshot: With 37 years experience, Todd brings a broad domestic and international

perspective to Mergers & Acquisitions, market, competitor and financial analysis skills,

with extensive senior management marketing, sales, business development, and

acquisitions experience.

Hensel, Rodney C.Specialty: Communications & Marketing


Experience: Internal and External Communication, Public Relations, Government

Affairs, Community Relations, Market Analysis, Crisis Communications

Snapshot: Rod has worked for over 27 years helping small and large companies

manage government and community relations during growth periods and in helping

companies achieve crisp, clear communications with clients, vendors, and employees.

McMann, Carey E.

Specialty: Communications & MarketingSectors: Service; Wholesale & Distribution

Experience: Marketing Strategy; Advertising & Marketing Communications;

International/Cross Cultural Communications

Snapshot: Carey has over 22 years experience as an international strategic marketer

with emphasis on consumer behavior in changing and emerging markets, including

segmentation, targeting, positioning, and forecasting.


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Patricia, Linda J.


Sectors: Service; Manufacturing & Assembly

Experience: Public Relations; International Business Development; Advertising and

Marketing Strategy

Snapshot: Linda brings 22 years experience in strategic marketing, sales and

operations, media production and building partnerships into productive, working

relationships.

Consulting Managers



Finance & Accounting Specialty


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Hardy, John R.

Specialty: Finance & Accounting

Sectors: Service; Manufacturing & Assembly

Experience: Banking; International Finance and Exchange; Stock Markets and

Trading; Financial Writing

Snapshot: John brings more than 32 years experience in domestic and international

banking, foreign exchange analysis and trading, real estate and equipment leasing, and

international business.

Schneider, Eric M.



Experience: Financial Analysis; Operations; Systems Development Risk Management

Snapshot: Erics background consists of 22 years of progressive responsibility and

achievement in consulting and executive positions with financial services firm.


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Squire Jr, Don T.


Sectors: Service; Wholesale & Distribution

Experience: Certified Public Accountant; Managerial Accounting; Profit Improvement;

Reengineering & Process Streamlining; Accounting Software; Budget & Financial

Analysis

Snapshot: Don brings 22 years experience in advising Business Owners and CEOs of

start-up, fast-growth companies as well as experience as Controller and CFO in larger,

established businesses.

Open Book Management

Open Book Management is a way of running a company that gets everyone to focus

on helping the business make money. Nothing more, nothing less.

It takes those trendy new management ideas empowerment, TQM, teams, and soon and gives them a business logic. In an Open Book company, employees

understand why theyre being called upon to solve problems, cut costs, reduce defects,

and give the customer better service. And they have a reason to do so.

If you could tear apart an Open Book company and compare it with a conventionalbusiness, youd see three essential differences:

1. Every employee sees and learns to understand the companys financials,along with all the other numbers that are critical to tracking the business

performance. Thats why its called open book. The numbers are up on the

wall, in the handouts, on the computer network. Training courses and regular

meetings teach everybody what they mean. So employees know whether theyre

making money. They know how much. They know why.


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2. Employees learn that, whatever else they do, part of their job is to move thosenumbers in the right direction. They may be salespeople or software designers,

machine operators or telephone operators, engineers or stock assistants. They

are also part of the business and are accountable to one another for their units

performance.3. Employees have a direct stake in the companys success. If the business is

profitable, they get a cut of the action. If its not, they dont.

Definitions of open-book management vary, but it is generally accepted to include thefollowing:

Sharing the income statement and balance sheet with most employees; Sharing other data with employees (such as productivity and plant

utilization/quality data);

Encouraging employees to use the information in their daily work; Training employees to understand financial numbers; and Sharing the financial results through a gain sharing program.

In effect, Open Book Management teaches people to quit thinking of themselves ashired hands (with all that implies) and to start realizing that they are businesspeople

(with all that implies). Their job security, their chances for advancement, their hopes

for the future all depend not on the whims of some boss or department head but on the

companys success in the marketplace and each persons contribution to it.

Change Management

There are at least three basic definitions ofChange Management:

1. The task of managing change (from a reactive or a proactive posture)2. An area of professional practice (as a way to define a professional service)3. A body of knowledge (consisting of models, methods, techniques, and tools)

Business Growth Partners approach to Change Management is from theperspective of moving a growth oriented business from either stagnant or slow growth

to rapid growth. Therefore, we tend to focus on the task of managing change

proactively: making changes in a planned and managed or systematic fashion.


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These are further defined as managing Internal and External changes. Internally, theaim is to more effectively implement new methods and systems in an ongoing

organization. The changes to be managed lie within and are controlled by the

organization. However, these internal changes might have been triggered by events

originating outside the organization, in what is usually termed the environment.

Therefore, managing External change is the response to changes over which the

organization exercises little or no control (e.g., legislation, social and political upheaval,

the actions of competitors, shifting economic tides and currents, etc.).

As an Area of Professional Practice, the definitions vary considerably amongpractitioners. Our definition is that of helping clients make changes that must be made

to realize forward movement.

As a Body of Knowledge, the content or subject matter of Change Management isdrawn from psychology, sociology, business administration, economics, industrial

engineering, systems engineering, and the study of human and organizational behavior.

The practical application of all of these disciplines can be found in the broad experience

of our Consulting Managers.

Services Execution

Fundamentally, there are three deliverable elements, preceded by a brief, strategicplanning appraisal which includes a site visit (for a full description see Action Plan

Profile):

Design a strategy and action plan to implement a nearly self-funded growthprocess with very low operating costs.

Assist in the execution of a funded, take-off growth stage. Assist in implementing high growth operations through Open Book Management

principles.

Action Plan Profile

Description


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Business Growth Partners believes every business is unique to its industry, in itsmanagements philosophy and structure, its culture, employees, and potential for

growth. Our challenge is to ascertain a large set of variables for each client through an

efficient and affordable process. To do this, we have developed our Action Plan

Profile to understand your unique needs and objectives.

Objective

With a view to your companys intentions and capacity for growth over the next 2 to5 years, our objective is to determine which areas of your companys infrastructure are

strong, to be exploited, and which are weak, to be improved.

Action Plan Profile

What We Look For

The analysis portion is comprehensive and customized for each client. Some of thesequestions may be obvious, others may seem vague. However, our research and those

of others along with our experience indicates that these are some of the elements that

make companies grow. The following will provide some perspective on the nature and

depth of the investigation.

Strategic & Tactical Planning

Is the company building a strategy around a clear value proposition for thecustomer?

Are strategies built on the perspectives of customers and investors? Are there mechanisms in place to monitor and adjust tactical plans as needed

over time?

Are strategies and tactics being effectively communicated within the organizationand among customers and other external stakeholders?

Is the strategy focused on the core business?Operations & Execution

Do products and services consistently meet customers expectations?


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Are front lines empowered to respond to customer needs Constantly strive to improve productivity and eliminate all forms of excess and

waste

Infrastructure & Communications

Are the personnel sufficiently inspired to do their best? It the organization consistently challenged to achieve higher standards Are specific guidelines and goals set and understood by all? Is the work environment challenging, satisfying, and fun? Has the company established, and does everyone abide by, clear company

values?

Human Resources & Organizational Structure

Is the organization stifled by redundant organizational layers and bureaucraticstructures and behaviors?

Is there an efficient and cooperative exchange of information across the wholecompany?

Are there incentive performance programs in place?Management Structure & Management Team

Are there policies and systems in place to fill mid- and high-level jobs withinternal talent?

Does the company create and maintain top-of-the-line training and educationalprograms?

What systems are in place to intrigue and challenge the best performers in alldiscipline areas?

Governance & Directors/Advisors

What is managements relationship with people at all levels of the company? What is managements capacity to spot opportunities and problems early? Does the board of directors have a financial stake in the company?

Innovations & Competition


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Are systems and incentives in place to continually introduce new technologiesand business models?

How effectively does the company exploit new and old technologies to designproducts and enhance operations?

How are product introductions and life cycles measured?

Partnerships & Mergers/Acquisitions

Is there an appropriate strategy to acquire new businesses that leverage existingcustomer relationships?

Does the company enter new businesses that complement existing strengths? What is the history and capacity for partnering relationships? How successful is the capability to identify, screen, and close deals?

Action Plan Profile

Methodology

The Action Plan Profile is completed in Two Phases:1. Phase One: Background data collection and management perspective

We will first collect a comprehensive array of factual and historical data about

the companys business, management and previous success and failures. This

provides us with insight and perspective on all pertinent areas of the companys

past activities and performance, its present condition, and plans and objectives

for future growth and expansion.

2. Phase Two: Onsite analysisThe data collection is then personalized during an onsite visit through facility

inspections, personal meetings with the companys officers, directors, managers,

key personnel and staff. Phase Two is customized for each client and is

structured from 1 to 4 days in duration depending on the companys size,

complexity, time frame and budget.


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A detailed Agenda will be provided to the company in advance to organize the

onsite visit for maximum efficiency in the time spent with management and staff.

Duration

Depending on the size of the organization and travel logistics for Phase Two, the timeframe to complete the Action Plan Profile is expected to take 2 to 3 weeks.

Preliminary and Full Report

Before departure from the site visit, the Senior Strategist will present managementwith a Preliminary summary of the analysis and recommendations, which will includehighlights of the key areas in need of development, change, restructuring, etc.A comprehensive, Full Report will then be produced and transmitted within seven to tendays of completion of the onsite visit. It will include:

1. recommendations regarding priority of actions needed2. estimate of time frame to achieve short-term and long-term objectives3. our proposal for a phased implementation of the recommendations in line with

managements available human resources, budget and anticipated rate of growth

Cost

The professional fee to complete the Action Plan Profile will range from $1,500 to$7,500, depending on duration and complexity. Out-of-pocket expenses, such as travel

and accommodations, will be estimated and agreed to in advance.

Development a Corporate Profile

Services Defining Our Client Companies


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Companies that will benefit most from our expertise are those in some form ofemergence and growth. If your company is similar in any way to these examples,

contact us for an introductory conversation.

Examples of Emerging and Growth Companies

Experiencing flat or declining growth Launching a new product or service Facing bankruptcy or re-organization Dealing with extraordinary and/or rapid changes in their market Experiencing cash flow or profitability problems Growing too fast without an adequate infrastructure Restructuring or re-engineering itself for planned expansion Planning a product or service roll out An entrepreneurial start-up with some financing in hand Building a distributor, dealer or sales rep network Seeking partners or partnering relationships Establishing an electronic communications network Reorganizing or expanding its marketing program Expanding its business via electronic marketing Repositioning itself to advantage equity or new growth markets Positioning itself for a public offering Seeking funding or selling its stock in an offering

Services Experience & Expertise

The companys founders have been accumulating significant knowledge and insightinto the emergence and growth of small and medium enterprises. Our business R&D

approach, in conjunction with hands-on work with a broad range of business types, is

the foundation of our ability to develop, orchestrate and implement systems and

methods that will grow your business.

Our Consulting Managers have been carefully chosen based on their years ofexperience, expertise in key areas of growth management, and particularly on their

ability to both analyze and execute within their specialty areas. Moreover, they have all

worked in scenarios involving rapid change and growth management.

Consulting Managers


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All of our Consulting Managers are multi-talented with years of exposure to thecomplexities of business management.

To review the BioSketches of our professional experts by specialty or businesssector, simply select Meet Our Team on the navigation menu; select Consulting

Managers By Specialty or Consulting Managers By Sector from the submenu; and

finally select the particular specialty or sector. To see the full biography of each

professional, click on his or her name.

Business Growth Partners has assembled a team of seasoned professionals withextensive, hands-on experience in order to provide our clients with methods that work

in a timely fashion. These experts have an average of 32 years experience a

significant advantage when making timely, critical decisions. Unlike other management

consulting firms, our emphasis is on execution rather than pure consulting. This is why

we use the term Consulting Manager to emphasize that our experts are extremely

capable masters of implementation

To review the BioSketches of our professional experts by specialty or businesssector, simply select Meet Our Team on the navigation menu above;

select Consulting Managers By Specialty or Consulting Managers By Sector from

the submenu; and finally select the particular specialty or sector. To see the fullbiography of each professional, click on his or her name.

Ideally, a growth-oriented company strives to achieve venture growth. This meansthat, at a minimum, a business has to increase its value 5 to 10 times, in 3 to 5 years.

The two business growth factors that enhance a companys value are revenues andprofits (see our discussion on Business Value).

We work with our clients to implement systems that optimize the likelihood thatspecified growth targets will be achieved. The growth targets we have identified are

based on statistics generated from the Inc. 500 and the American Business

Conference lists. These statistics form the basis for our targets for venture growth

companies, as follows:


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Current Annual Revenue Level Annual Growth Rate Target

$250,000 - $1MM 250%

$1MM - $5MM 150%

$5MM - $10MM 100%

$10MM - $25MM 50%

Above $25MM 30%

These targets will stretch a companys objectives, which is the intent. Our research

shows that they are achievable as profitability numbers improve.

High revenue growth rates are possible and desirable1. The biggest mistake entrepreneurs make is not to think big enough in

terms of creating value.

2. The E-Myth: The second biggest mistake most business owners andmanagers make is to work in their business, not on their business.

3. The third biggest mistake many business owners and managers make isnot to take more advantage of the power of partnering and networking.

The main keys to business growth are:1. Customer service and satisfaction are top priorities.2. Quality is the name of the business game and always will be.3. Creating value is what owners and shareholders come to understand and

want. Continuous innovation makes business both rewarding and

valuable.

The core processes that are the mark of top-notch leadership andmanagement, and will result in business success are:

1. Basing decisions on knowledge and facts rather than opinions.2. Balancing short-term with long-term considerations.3. Seeking and implementing the right balance in business values and

operations.


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4. Being systematic, focusing on results and working to improvecontinuously.

5. Getting things done on time.

If you are looking for a simple business growth recipe, give it up. There is no simpleway to grow a company fast. That is not the same thing as saying that it is impossibly

difficult, or that there are no principles and factors that foster business growth.

The paradox of business growth is that it is at the same time easy and complex. In aneffort to demonstrate this paradox, we will list the basic dimensions and many factors

that affect business growth. Individually, each is simple and reasonable. All of them

together, however, are very complex to implement. Our job at Business Growth

Partners is to assist clients to reduce the complexity in their businesses and make

things easier to achieve both immediate and sustained growth.

At Business Growth Partners we believe that just about anyone can grow abusiness quickly and profitably. Few do because it takes hard thinking and hard work.

From its inception, the company focused much of its efforts on research anddevelopment activity to:

determine the facts about business growth and how it can be fostered, and design comprehensive systems that can more effectively generate business

growth.

Our main focus is to work with growth-oriented companies to analyze and implementwhat has been learned from years of unique exposure to business success and failure.

In addition to management and innovation, Business Growth Partners also focuses

on the use of information technology, the Internet and partnering relationships as

effective means to promote rapid business growth.

The Mindset Dimension

Do you have the right attitude toward business growth? What do you know about business growth? What are you willing to do to grow your company rapidly? Do you really know what you dont know?


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In our experience too many entrepreneurs approach business growth as dilettantes.They just wish for results without wanting to do the hard studying or thinking that is

required, but do want to control the decision making. That mindset never works.

The Management Dimension

Is management trustworthy? How strong is corporate governance? Is there a good plan? Is management quality-oriented? Is management innovative? Are business activities tracked and and related to results? Are personnel focused and are things done on a prioritized basis? How productive is everyone?

Good managers balance long-term goals with short term requirements and are able toget the most from people. There are very few independently superior managers, which

is why a management team is usually necessary to grow a company successfully.

The Marketing-Sales Dimension

Is the market for your product or service large enough? Are you customer-oriented? Does your company have at least 3-4 competitive advantages? Is your company sales-driven?

Business growth requires a sufficiently large market and at least several edges to gainmarket share.

The Financial Dimension

Does the business focus on increasing the valuation of the company? Does the business emphasize revenues and profitability? Is spending tightly controlled and related to sales and profits? Is the financing plan clearly related to growth requirements?

The Operations-Execution Dimension


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Is there a system for interrelating results with respect to quality, profitability,activities and employee-management accountability?

Is the system clearly communicated throughout the business? Are incentives related to performance?

The five dimensions and related questions outlined here offer our perspective on themajor components of rapid and sustained business growth. To pull all these together

requires in-depth understanding, broad experience and a systematic approach.

Business Management and Governance

What does rapid growth mean? In our work we take the following for granted: At a

minimum, rapid business growth means bootstrapping from $0 to $25 million valuation

in three years or less; or, if financed with at least $10 million, to $100 million valuation

in three years or less. For more a more detailed analysis of rapid business growth and

what we know about it, read the briefing paper on this topic, here.

There are a number of factors that make it possible to grow a company quickly.Perhaps the most important one is management. Usually management is much more

important than the business concept or idea. Their relative significance is expressed by

the old venture capitalist saying: It is better to have a mediocre idea and goodmanagement, than a good idea and mediocre management.

Right after management there is corporate governance, which is the role of abusiness board of directors. One of the most common mistakes entrepreneurs and

corporations make is to discount the importance of corporate governance.

Entrepreneurs often assume that all it takes to be successful is a good idea and hard

work. They ignore the need for a strong management team and tend to forget

altogether the importance of directors. Corporate managers recognize the significance

of a management team, but think of directors as a way to network with otherbusinesses, not as governors.

Business Value


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Business growth is one of the best ways to build wealth because of the value that getsadded when profits are made and are rapidly increased. Business valuation is the way

the growth of business is best measured. That is where things start and end.

Many entrepreneurs get into business for a variety of reasons. Most of these reasonshave little to do with business valuation. Presumably, entrepreneurs are in business to

make money. Those who are in in business for reasons other than making money are

not entrepreneurs but hobbyists.

If you can make more money instead of less, why would you not want to do that?Unfortunately, the majority of entrepreneurs and business owners make less money

than they could because they do not understand business valuation.

The valuation of a business is where everyones interests coincide. When the value ofa business increases it can benefit the entrepreneur(s), investors, managers and

employees. That is the basis for Business Growth Partners approach. To understand

what lies at the core of business value is The Value of Enterprise and the Power of the

Earnings Multiple.

The Value of Enterprise and the Power of the Earnings Multiple

by Dr. Jim M. Namaste

When we sell or exchange our time or ideas we are involved in enterprise. Everybodyquickly understands that their time and ideas are worth something (tell a ten-year old

to mow the lawn for you or shovel snow), but very few people actually understand how

the value of time and ideas relates to enterprise.

For example, there is a big difference between earning money in a business andbuilding wealth with a business. The difference, which is much larger than most people

realize, has to do with something I call the magic of the number 7, or the power of the

earnings multiple.

Start by asking yourself what an enterprise is worth if you want to buy or sell it. Itturns out that most people havent thought very deeply about the value of enterprise,

or why and how enterprise is important and what makes it valuable.


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Think about this. The annual sales for one business might be $100,000 and the ownerearns $50,000, but the business is worth nothing. The annual sales of another business

is $50,000 and the owner doesnt earn any wages, but the business is worth $24,500.

Figure out how this works and you know the secret of building wealth with a business.

If you really want to understand how enterprise creates wealth, start by studying theexample below.

Most people simply think in terms of making money to survive; making money to befinancially independent; making money to prove that they are great; or, whatever. Not

that many people think of an enterprise or business as an independent entity/organism

that is built or created to generate wealth.

In an introductory talk that I give to people who are looking to go into business forthemselves I tell them about the secret, powerful, magic number 7 as the key to wealth

building in business. This number is a multiple of earnings that on average can be used

to calculate the value of a good business.

Then I make the point that when you own a business and you take $1 out of thebusiness and stick it in your personal account you get a $1 value. However, when you

keep that $1 in the business (as long as you pay yourself a justifiable management

salary), that $1 magically is worth $7.

There are very few ways on earth that you can turn $1 into $7. That is why mostwealth is created by entrepreneurs and by investors who back those entrepreneurs.

In my introductory talk I use a hot dog stand or food cart as an example. Lets say youbuy a little stand and start working it eight hours per day, six days per week, 313 days

per year, by yourself.

Assume that the business yields $50,000 in sales per year. Lets say that after allcosts, including taxes, but not including wages, what is left is $20,000.

You decide to pay yourself a total salary of $20,000. That means that the business hasno net earnings or profits! Although you are making money to survive, the business is


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not making a profit. A BUSINESS THAT HAS NO PROFIT HAS NO VALUE FROM AN

INVESTMENT POINT OF VIEW!!

If you want to understand how wealth is built in a business you need to really knowwhat is going on in this example. Lets work it a little more.

Instead of paying yourself $20,000, you get total wages of $16,500, leaving $3,500.You multiply that by 7 and you have a business with a value of $24,500. Add that to

the $16,500 and you build a TOTAL value of $41,000 for yourself!

The problem is that your time may be worth more than $16,500, in which case youmay have artificially inflated the value of the business. That wont work. A savvy

business buyer will quickly tell you that something is wrong. If your time is worth more

than $20,000 you are actually subsidizing your business with your own sweat equity. A

lot of small business owners actually do this.

If it takes more than $20,000 in wages to run a business and the business can nevergenerate that amount it will never be worth anything! But suppose that it takes less,

but you dont work the business yourself!

Lets go further. Suppose you live in a town with very reliable teenagers who canparticipate in a work-release program from their high school and will work at a total

wage cost of $6 per hour. You hire two and they are so trustworthy you can turn all

responsibility for running the food stand over to them.

Now the wages in the business are a total of 313 x 8 x 6 = $15,024 dollars per year.The business is making a profit of $4,976 per year. Lets say after taxes the profit is

$3,500.

See whats happening? Lets go back to that magic number 7. When we multiply

$3,500 x 7 we get $24,500 as the value of the business.

This is pretty amazing and is absolutely correct. In one case you work hard, payyourself and have a business worth nothing. In the other case you dont work at all

(but you dont put any money in your pockets either, unless you have another job), and

end up with a business worth more than what you would have paid yourself.


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The lesson here is NOT just that you should hire other people and pay them less. Thelesson is that if you work the food stand yourself, you should value your labor at the

going rate. If you pay yourself more than the going rate the business profits will not

demonstrate its real value. If you pay yourself more, the business wont survive.

Suppose you keep the food stand open an extra two hours per day by hiring a thirdpart-time teenager and you get some extra sales so the business has total annual

revenues of $70,000. Non-wage costs now are $42,000, leaving $28,000. Total wages

are $18,780 leaving $9,220.

Lets say earnings after taxes are now $6,500. Guess what? Apply the 7x earningsmultiple and you get a business valuation of $45,500, an increase of $21,000 by adding

2 hours of work per day!!

Of course, there is a lot more to business valuation, but this example demonstrateswhat is at the core of creating business wealth.

If you or someone else has a business opportunity that can generate a profit(EARNINGS), other than just making money for you, then you are truly involved in

wealth building. That is why profitable business opportunities attract investors, can cost

a lot of money and make a lot of money.

The main and final point of the examples and the calculations is this: In business thereare many legitimate things that can be done to grow earnings. When earnings are

increased the effects are multiplied, more than in any other human activity. That is the

secret of wealth building in business.

Does Your Company Understand Growth

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