Alternative Methods for Achieving Business Growth…PLUS…

Why a Multi-channeled Marketing Strategy is a Smart Way to Go

20 years in senior management roles: CEO, GM, COO, Business Advisor

Have worked across a wide range of businesses and industries: meat, manufacturing, export, retail, property valuation.

Business scales: < $500K p.a. to a company with an annual sales turnover of around $500m p.a.

Quick Introduction

Locally, have performed work for Scales Corp (Mr. Apple), Progressive Meats and the Hawke’s Bay Chamber of Commerce.

Had 63 x different local business clients during my time as a Business Advisor for Hawke’s Bay – from sole traders to large companies.

Was groomed by a top N.Z. director. Worked alongside one of N.Z.’s top marketing

agencies (Farrimond) for over a decade.

Quick Introduction

Financial Management – P & L, Balance Sheet, budget formation & tracking.

Debtor management – PPSR, imposing additional securities, foreclosing.

Legal document preparation: Franchise Agreements, Licenses, Contract for Services Agreements, Board Codes of Conduct, Employment Agreements, Merger Agreement.

Enforcement of Franchise Agreement. Conference facilitation & presentations. Training programme preparation. Ecommerce website design and project management. Intranet design and project management. Supplier Negotiations. Stakeholder capability development. …and more.

Business Experience/ Expertise

Disclaimer of Liability - It is completely at the discretion of the viewer as to what content of this presentation the reader chooses to be influenced by and act upon, and any risks and liabilities related to the viewer adopting/ acting upon any content of this presentation to suit their particular purposes/ situation are solely those of the viewer to consider and bear. Similarly, the author of this presentation has no liability whatsoever for any and all consequences which transpire as a result of any party choosing to apply any element of this presentation to suit their particular purposes/ situation.

It’s unfortunate to have to display this…sign of the times sadly

Looking Beyond the Traditional Business Model to Achieve Growth/ Business Development

PART A -

The owner of a traditional business model (e.g. sole trader/ Limited Liability company) conventionally affords introducing new equipment/ resources/ IP (e.g. training programmes, IT systems)/ inventory by either:

A) generating sufficient surpluses from trading activity, and/or

B) introducing new capital (e.g. adding new shareholders and/ or share capital) and/or

C) by borrowing funds.

Where the Traditional Business Model Falls Short for SME’s

The main constraint in relation to achieving growth/ development through relying on surpluses is of course that you firstly need to generate sufficient profit in order to have surpluses.

…and what if your business doesn’t manage to achieve a healthy EOY surplus ? Answer: no forward movement of your business, and your business is exposed to the possibility of stagnating and/ or losing market share.

Where the Traditional Business Model Falls Short for SME’s

The main constraint in relation to achieving growth/ development through relying on injecting additional capital into your business is that you either need to have the funds on-hand and/ or you need to borrow funds to achieve this and/ or you need to attract the capital of willing investors (e.g. traditional shareholder scenario, crowd source funding).

…and what happens if your business doesn’t meet the lender’s borrowing criteria or suitable shareholders aren’t attracted to your business ? Answer: no change = no possible gain and the possibility of stagnation and a reduction in market share.

Where the Traditional Business Model Falls Short for SME’s

Merger scenario. Often this business development path is

viewed as being “radical” or “extreme” – mostly due to the perception of the level of change that a merger suggests.

A merger of two or more fundamentally well aligned organisations can deliver considerable benefits to stakeholders.

Alternative #1 for Achieving Business Growth/ Development

Move forward with superior IT systems – dropping the least favoured/ outdated systems.

Stock procurement advantages – improvement in buying power/ terms of trade, and access to previously unavailable products.

Greater affordability of resources/ programmes/ IP.

Improved “Brains Trust” overall. Increased scale gets noticed by bigger players –

who could well make great strategic partners.

Merger Benefits -

Getting used to each other’s “weird ways”, and arriving at a consensus as to which pre-existing practices should prevail versus those that should be dropped.

Possibility of having to restructure human resources (resulting in disestablished roles) to better meet the needs of the newly formed merged entity.

Re-branding investment. (****) Culture ill-alignment.

Merger Disadvantages -

Parent Company scenario. Often a franchise or a “franchise-

cooperative” utilizes this sort of business structure.

Where a series of either sole traders or Limited Liability companies identify sufficient common ground on which to establish a separate company which serves the commercial needs of all interested parties.

Alternative #2: for Achieving Business Growth/ Development

Individual owners of separate individual Limited Liability companies (e.g. 3 x copy writers, web developer, SEO specialist, videographer, photographer, etc) see enough commonality between themselves to pose the idea of forming a Parent Company – which they each become shareholders of.

Parent Company Shareholder Agreement – and possibly even a Company Constitution – is brought into effect.

‘Parent Company’ Structure explained…

The inputs/ contributions of each shareholder (as a finished product/ service) is presented to the end customer under a common/ single brand (i.e. the business brand of the Parent Company).

So rather than continue to compete against one-another in the same industry, or only work together on a contractor basis, the shareholders are working closely together to achieve the same (commonly agreed) strategic objectives…those that they commit to the Parent Company Strategic Plan.

‘Parent Company’ Structure explained (cont…)

Profits are distributed amongst all shareholders of the Parent Company in accordance with what the Shareholder Agreement provides.

Similarly, calls for extra capital to be fed into the business are made in relation to all shareholders.

Shareholders contribute funds to cover the operating costs and marketing activities of the Parent Company. E.g. % of sales or % of purchases.

‘Parent Company’ Structure explained (cont…)

Pooled financial resources to be able to afford resources/ equipment/ IP/ marketing programme that otherwise each individual shareholder would not have been able to afford.

Better workflow to achieve commonly sought outcomes.

Improved “Brains Trust” through the pooling of ideas.

Able to have a reliever who “knows the ropes” fill-in during absences (holidays/ sickness).

Benefits of a ‘Parent Company’ Structure -

Can increase capital in the business by issuing a ‘Call on Capital’ to all shareholders…rather than borrow funds.

Establish a Central Billing function to efficiently process all incoming and outgoing invoices.

Appoint a competent person to “manage the business”, allowing the “technicians” to do what they do best.

Benefits of a ‘Parent Company’ Structure -

Procrastination of decisions being made. Certain decisions being made in self-interest

sometimes…more so than in the best interests of the organisation as a whole.

The challenge of keeping as many of the troops/ shareholders happy for as much of the time as possible.

Perceived reduction in independence/ autonomy to make decisions.

Disadvantages of a ‘Parent Company’ Structure -

Why a multi-channeled marketing strategy is often the best route to take

PART B -

Whilst digital platforms (social media in particular) continue to gain in popularity for building business volume and brand awareness, there is an interesting phenomenon emerging in N.Z….

…a continuing desire shown by so called “middle-aged” people to have time away from the computer screen relaxing with a magazine or newspaper or being in front of the television.

Digital – yes; yet Traditional Marketing Methods Still Have Their Place

Furthermore, this demographic are crying-out for rewarding face-to-face interaction with other people.

They don’t want to see your “Like” via Facebook…they want to see and feel your emotion as you engage with them.

Don’t discount the importance of genuine, open and honest conversation with other people as they enter your business.

The strongest human connections will continue to be made via face-to-face contact.

Digital – yes; yet Traditional Marketing Methods Still Have Their Place

I have just finished writing a book titled:

“Real World Proven Best Business Practices -Bridging the Gap Between Academic Teachings and

Real World Business Success”

…which will launch in the public domain late Nov/ early Dec 2016. Venue = Taradale PaperPlus. Invitation circulated via Taradale Marketing Association newsletter. You’re welcome to attend…

Book Launch Coming-up Soon

This book addresses the reasons why I think particularly SME businesses continue to fail at an unacceptable rate in N.Z.

It provides proven best practices for commerce graduates and seasoned business people alike to apply on the “commercial coalface” to increase the positive outcomes (including financial success) of the businesses they are involved with.

Book Outline

How to prepare a practical Strategic Plan and annual Business Plan.

How to approach marketing in a practical way. How to perform simple and cost effective market

research. Client-centricity. Merging as a growth option. Establishing a Parent Company as a growth option. Critical Success Factors. Evolutionary Cogs vs Operational Cogs. How to develop a positive workplace culture. Identifying, measuring and assessing risk. How to build a united governance body.

Book Outline – sample of chapters found within

Foreseeable undermining influences on N.Z.’s achievements on the global stage going forward:◦ Risk averse mindsets.◦ Kiwi sense of independence – “I’ll do it my way”.◦ Over zealous general and industry-specific

compliance expectations (legislation and standards).

◦ Poor leadership and governance – and lack of the right type of people willing to be leaders.

◦ N.Z’s “Tall Poppy” syndrome – causing high achieving people not to want to share their knowledge/ insights/ winning formula.

Misc (Food for the “Grey Matter”)

Foreseeable undermining influences on N.Z.’s achievements on the global stage going forward:◦ Politics being allowed to overshadow practical

sensible (“do what’s right”) commercial decision-making.

◦ Reducing quality of face-to-face communication and social interaction generally (fear, distrust, secrecy)

◦ Quashing of individuality and the freedom to choose and think for oneself…largely due to the quest for “compliance”. This has considerable implications for innovative thinking and people’s quest to realise their own potential.

Misc (Food for the “Grey Matter”)

In short, for N.Z. to lift its game on the global commercial stage, we need to become more concerned about:

Enabling, versus Disabling

…Kiwis.

The key words are: empowerment, support, education, training, praise, “setting other people up to win” and…role satisfaction.

Misc (Food for the “Grey Matter”)

Opportunity for discussion/ questions…My LinkedIn profile:

https://www.linkedin.com/in/peterdalexander

E: petera@realworldconsulting.kiwiW: www.realworldconsulting.kiwi

M: 027 3575259

Tools available to help businesses lift their game:• GAP Analysis template• Strategic Plan template• Business Plan template