Filed under: Business Growth, Marcellus, Pittsburgh, Profitable Growth, Uncategorized
Background: Microseeps is a lab testing business located in Harmar, Pennsylvania that provides a wide variety of services supporting insight into soil and groundwater problems. Since the 90’s, the company has solved a large number of customers’ needs by developing innovative, groundwater, analytical tools and cost-effective ways to sample soil gas for vapor intrusion.
The Challenge: Although Microseeps was experienced in serving large, energy firms responsible parties, consultants and labs throughout the United States, the company lacked a shale-gas offering or specific sales effort dedicated to directly serving small customers in the Marcellus Shale footprint running through West Virginia, Pennsylvania, Ohio, and New York. The firm typically serves consultants and customers who call Microseeps technical and customer support for solutions. After analysing sales and laboratory results, however, management saw a new market opportunity emerging — the local independent testing lab. But without a sales force, or dedicated products or services, how could Microseeps evolve to serve this dispersed target market?
The BGC Solution
Andy Birol helped Microseeps conduct field, market and internal company research and analysis. Then, Tom Hill, Owner agreed to launch and fund a direct-marketing effort with online and off-line tactics to directly engage with state-approved laboratories across the quad-state Marcellus shale footprint.
“This was a big step for our company to aggressively market to a specific target prospect. We are excited to introduce this unique offer that fully leverages our companies Best and Highest Use,” said Hill, adding, “Andy guided us to discover how we could enter this market, and implement the right steps to further grow our Marcellus business.”
Specifically, Microseeps is developing an integrated. direct-mail, email, telephone and website strategy that offers an easy and profitable solution for any lab to grow its Marcellus business, whether or not it has existing business or experience serving land owners, corporations, drillers or municipalities impacted by the drilling of gas. Beyond these tactics, Microseeps is taking further steps to support its business in this space.
Results to date.
Microseeps has already grown its Marcellus related business segment with existing customers by more than 25 percent. And the new tactics promise to easily double this growing number in this emerging market. More important, early results demonstrate that a focused effort has made a sales impact and has given management the confidence to create more proactive initiatives.
“With a great year behind us and our new Marcellus and other initiatives under way, I have high confidence that the coming years will continue to be some of Marcellus’s best,” says Hill.
“Andy Birol has been of great help not just in terms of developing our Marcellus initiative, but in helping us to refocus Microseeps on creating profitable growth for years to come. I look forward to a positive ROI on his and our efforts for years to come.”
Filed under: Business Growth, Profitable Growth, Uncategorized
As a stakeholder in a tech company, you have your money, future or ego in its future. Whether you own, buy from, or sell to such a firm, its hype should be contagious but could be a double-edged sword. Are you in on the ground floor of the “next big thing” or will your stake be wiped out by the next disruptive technology? Industry pundits who define success in terms of “digital immigrants”, “hyper-personalization” and “virtualization” aren’t very helpful! So how can you tell whether your tech firm is chicken-salad or chicken-scratch?
Here are three steps to decide if and how your technology company could succeed.
1. Is your firm’s product or service really a feature, a benefit or an advantage (FBA)?
• Features are the functions, specs or characteristics defining how a product or service performs. Apple’s touch-screen technology is a good example.
• Benefits are how the features help the user/buyer. The Garmin portable GPS has evolved from a beneficial product
• Advantages are what value the benefits provide the user/buyer
2. How can FBA’s help you define your tech firm’s focus?
• A feature-driven company should offer a function or tool that enables something greater to work better.
• A benefit-driven firm should sell a capability which enables its user/buyer to pursue an outcome
• An advantage-driven firm should market an ultimate condition or outcome to a user/buyer
3. Which markets, investors or ultimate buyers are best for your tech company?
• A feature-driven tech firm has the most appeal to vendors/suppliers of a greater or broader solution
• A benefit-driven company should target its product/service at end-user/buyers who will leverage it into the most profitable outcomes or value for its customers
• An advantage-driven company is most valuable to the final user/consumers who enjoy the most immediate value or highest outcome from this complete product/service.
Whether your technology firm is “pre-revenue” or “self-funding” you are proud of it and its future.
Filed under: Business Growth, Profitable Growth, Uncategorized
Business people are fascinated by the benefits, profits and potential of technology. Just visit any tech event and witness the financiers, service providers and the media networking with techies to discover “the next business thing.”
But despite all this “technology-transfer”, why isn’t there more technology in business? After 15 years of consulting with more than 430 firms and presenting to or interviewing another 10,000 business leaders, I’m dismayed by how little technology actually makes it into most mainstream, medium and small businesses:
- Most inventories are still managed without RFID or other systems tied into the POS. Despite this decade-old technology being “so easy,” I still see many companies doing it by hand.
- Few companies have good CRM systems. While this software works, few customers integrate their systems with their own sales culture and process or ensure sales force commitment, crippling many users from benefitting from such new technology.
- True cost-accounting information is scarce. Ask business owners what their product or service really costs to make, sell and service and few honestly know. If they had more knowledge, they could more confidently limits test new offers and features.
- Knowledge businesses still communicate with tools from the 1900′s. Despite the many better ways to present and engage their audiences, the gap between what companies say they sell and what customers hear and buy remains enormous. Too few businesses are developing mobile apps or distance learning.
Here’s why there isn’t more technology in business:
- The culture of technology clashes with mainstream business. The technology culture values perfection of their means while mainstream business struggles to convert these means into profitable ends.
- Tech people are schooled to woo investors and grants not to sell to customers. Inventors and startups believe they must write plans to get financing before they approaching and selling customers. Customers need to be understood and served but investors want to be bought out and move on. Who is more important to business longevity?
- Associations and business-plan contests reward planning skills not results. Our schools, associations and governments reward techies more for their thinking than for their sales and profits.
- Social media often encourages engagement without closure. Blogging and tweeting without closing business is like having a fiancé for five years without a marriage.
Why should you in the technology community react or even care? Because mainstream businesses need you, your value and they have money to pay you.
Consider these 3 ways to help you put more of your technology in business:
- Make your “thing” work manually before you try to make it work with technology.
- Understand how your customers use your thing to make money, and whether it’s by selling more, spending less, saving time, reducing risk or improving their lifestyles.
- Sell some version of your product or expertise from the start while you seek investors.
Technology companies have big shoes to fill in sustaining the Western Pennsylvania economy beyond steel. Doing so takes driving their products and services deeply into mainstream business.
Through this column, I will provide you with ways and ideas to do so. Together, we can put more of your technology into business.
Filed under: Business Growth, Profitable Growth, Uncategorized
Even in an improving economy, why does the contracting industry still feel like the last frontier? As long as financing stays unpredictable, customers pay late and subcontractors/tradesmen slip up, does running your business seem like a series of showdowns at the OK Corral? After helping dozens of owners in the building trades, I’m clear that formal planning and forecasting don’t work in the face of erratic weather, desperate bidding, and poor project management. But good contractors survive. And a few have learned how to adapt and actually thrive by creating scarce capabilities and unique services. And some builders have done it so well that they have, in a sense become “The Only Sheriffs in Their Towns” in the “Wild West of Contracting.”
Recently I personally met, spoke with and asked over 20 PA-based contractors what they needed to do to succeed in the next two years. They said three factors mattered most:
1. Competitive estimating/pricing
2. Quality work
3. Great project management.
But they agreed that these factors are not a strategy for long term success. In the short run, every contractor may survive by delivering quality work on time and on budget. But as labor and material costs grow and credit stays tight, only the largest or cheapest firms may succeed over time by doing more and charging less.
So what is the answer? Focus, perform scarce services, and move with the market. Here are three “Wild West” strategies I’ve helped my contracting clients invent, develop, and implement.
1. Focus on your Best and Highest Use®. WK Thomas Construction has focused on being a leader in building Butler® pre-engineered steel buildings.
2. Invent and Perform Scarce Services. Menard USA is a design-build specialty geotechnical contractor offering expertise on ground improvement for sites with poor soil.
3. Move as the market moves. FlorLine Group® is expert in the design and application of industrial floor, wall and ceiling coatings for electrostatic and other regulated (FDA) environments.
So which strategy will you take to become the only sheriff in your own town? The first step is to decide which of your differentiated skills, expertise and services you can charge more for to generate better margins. Although new products, markets and technologies are hard to develop and must be constantly protected from copycat competitors, they will turn your “Wild West” into looking less like “F Troop” and more like “Bonanza!”
Andy © Copyrighted by Andrew J. Birol, President of Birol Growth Consulting, who helps owners create profitable growth by growing their Best and Highest Use®. Andy can be reached at (412) 973 2080, email@example.com or www.profitablegrowth.com
Filed under: Business Growth, Profitable Growth, Top Line Growth, Uncategorized
Just as predictably as the Times Square ball will drop, on New Year’s Eve, both consumers and business owners will make resolutions. Consumers will resolve to diet and exercise and business owners to hunker down and work on their business, wealth and lifestyle. Too often, the results for both consumers and business owners turn out the same:
January – March: Consumers starts personal regimen. Owner pushes him/herself and staff to work harder in the business to get better results.
April-June: Consumer loses some weight and prepares for warm weather. Business owner gets frustrated as current level of activity isn’t generating better results. Feels like Groundhog Day.
July-September: Distractions of summer vacations and increased activity distract both the consumer and business owner alike from their missions of getting in better shape.
October-December: Consumers get very busy going back to work, school and preparing for the holidays. Business works even harder to “save the year” by having a great 4th Quarter.
And then it’s New Year’s Eve again! Time for new resolutions!
I am no role model for fixing consumer behavior, but I have seen the following work for business owners who are ready to break out of their cycles:
Whenever your recession (and your customers’) started and regardless of whether your business is a leading or lagging indicator of a recession, it doesn’t matter when you’re in the middle of one. For many of us coping with this recession has been a lot like going through the four phases of loss namely denial, anger, self pity and acceptance. In this era, many of us are moving into acceptance of our new reality and are ready to take steps to make the best of our gifts and blessings. The more we reflect on the last few decades, the more we realize how much better and smarter we could have been when times were easier and now know that getting ever better and smarter is the difference between success and failure. In our recession there seems to be a fine line between success and failure. Success may be defined as not failing. And failure can come from simply or deviating from success. As we consider our circumstances and recognize that our business lives must go on, what can we do to grow and save our businesses during these times?
Here are three areas you need to triage, four areas where you should respond and three strategies on how to profit during these times.
Three Areas You Need To Triage.
Triage, when ER doctors and nurses determine who lives, who dies and who will be healed later, is exactly the right approach to take in your business as do in their jobs. Instead of patients you will be triaging your customers, projects and cash.
1. Triage your customer relationships.
o It’s going to be critical to decide which customers you can keep, which ones you need to renegotiate terms with.
o Fire your unprofitable or difficult customers now and use great discretion in choosing the prospects to pursue. Someone else may have fired them first.
o Most companies start first by providing extra value and service to their incumbent customers. During these times, their loyalty and fear of switching will keep them close to you if you stay close to them.
2. Reevaluate ongoing projects.
o Take a hard look at what you’re working on. Kill any project with an unclear payback or one, which will consume more resources than will plausibly make in the next 36 months.
o Restructure any project that’s critical but has no clear payback, accountabilities or resources.
o Prioritize and focus on completing any project with the ability to enhance revenue, reduce costs or protect wealth.
3. Manage your cash.
o With liquidity likely to be scarce at best, hoard what you have. Use cash as a reward for vendors, employees and others who are sacrificing for you or your goals.
o Use your cash or lack of it as a weapon in dealing with companies and customers who rely on you and previously expected you to finance receivables.
Four areas where you should respond.
Once you have triaged your customers, projects and cash, look to four areas where you can respond to your new reality. These are:
1. Price for profit and to avoid loss.
o Price your products and services in terms of the value they not only provide to your customers but how they help your customer’s customers profit. Learn where and how your products make others money and align your pricing with theirs.
o Where you must make sizable investments in raw materials, ensure your pricing terms allow you to recoup your investment as soon as you’ve made it.
o Reward your customer’s liquidity with favorable pricing. Those who can pay you up front deserve discounts.
o Finally, use your pricing to protect yourself from those who exploit you. Immediately raise prices on customers who pay slowly. Create collection terms for poor payment just as you would offer good terms for fast payment.
2. Manage your credit furiously.
o Do what you can to get more credit. If you can open a second line or other source of credit, do so even at a price you would not normally pay, especially if these are from confidential or “angel” sources.
o Use your credit prudently. Don’t assume you need to finance everything yourself. Get creative and aggressive in what you ask others to carry and fund.
o Thirdly, use other people’s money wherever possible. Many aggressive sellers and bargain hunters may have credit you can use in the course of doing business with them.
3. Lead decisively.
o Show your confidence in all you say and do. While you may not feel it, your optimism, confidence and conviction will be a beacon of hope for those who are more scared than you are.
o Motivate your vendors, staff and customers to stay committed, keep their promises and take the same risks you are in an anticipation of better times and the promise of deferred rewards.
o When times are tough, show your stoicism in the face of bad news and inevitable hiccups.
o Demonstrate balance in your short-term pursuit of survival and your long-term perspective for better times and deferred rewards.
4. Reinforce your Best and Highest Use®.
o Ensure that you and your company are focused on what you like doing, you are good at doing and your marketplace values you for doing.
o Bring as much value and enthusiasm to getting better and doing better at what you focus on.
o Take heart in knowing you are very good at what you do and this is a true advantage in these times where impostors are exposed, pretenders prove incapable and amateurs just give up.
Three strategies on how to profit.
After you have triaged your business and responded in four areas, turn your focus to new strategies to profit now and over time:
1. Take market share.
o Understand switching costs for the prospects you are trying to close. Make it easy for them to move their business to you and your superior value.
o Buy up your rivals for pennies on the dollar. Many companies today do not have enough sales to cover their overhead. Better yet, just buy the companies’ customers without the overhead of their failed companies.
o Grow your share of your existing customers. If you are trusted and invaluable, then ask for more of their business. Be quick to respond if another supplier stumbles, or is on the ropes.
2. Sell new value.
o Instead of selling just your product or service, take responsibility for your customer’s success and outcomes. Offer to warranty or insure that their success will come from your product or service.
o Recast your value proposition if your customers’ needs are changing. If so, rethink how you get paid, how you package your services and how you price your products.
o Realize you are going to work harder, spend more time, and possibly get paid less for serving the same customers. Consider it an investment in the future.
3. Invest for the recovery.
o Now is a great time for buying services and raw materials at a discount. If you can, invest now at a fraction of what it may cost to buy what you need when the economy picks up.
o With sales down, you probably can find extra time to work on the future. Take advantage of not being busy and get busy building your next success.
o Finally, as you come out of denial and self pity, push yourself into actions that will ensure your success and preserve your survival. Work harder and more decisively while your competitors are whining and paralyzed.
Our next year will continue to be hard as credit remains tight, new sectors of the economy are impacted, and the country adjusts to our new reality. You can grow your business during this recession if you triage, respond and develop strategies to profit. As the small guys in a world of goliaths, the recovery is largely in our hands as it always has been and will surely be again.
Filed under: Business Growth, Profitable Growth, Top Line Growth
Before the financial crisis, most businesses could coast along and rely on their credit lines to make up for shortfalls in sales.
“Good” customers could be subsidized and customers who didn’t pay or went under could be ignored by just borrowing more cash. For the firm, slumping quarterly revenues and rising expenses could be carried forward by financial wizardry and leveraging a balance sheet.
While the lessons of doing business without credit and cutting expenses to the bone have been learned, how can one grow a business back to where it was and forward after the financial crisis? Without fads like buyouts, rollups and ESOPs, an owner, financier or organization should return to the oldest source of creating growth in the book. Sell more products and services and do so at a profit.
Profitable sales means focusing on:
- Higher gross margins from differentiating your value and de-commoditizing your products and services profitably
- Knowing that every sale you make is profitable by customer, order item or services
- Managing your balance sheet for liquidity instead of credit where the biggest assets are customers’ predictable purchases.
- Creating a wealthy company that can be sold for cash and secure the lifestyle of its owners now and later.
Profitable Growth is not a fad, or just a program to get by in the short term, but a way thinking about your business, investment or organization. It starts with knowing who is paying you for what value and continuously working to repeat this. It is a pay-as-you-go approach to growing your business that reduces dependence on borrowing money, and increases the wealth of a company and the security of its owners and all who rely on it.
Whether your business has major growth or returning to growth in its plans, this blog will focus on the tools, techniques and real-world examples for creating Profitable Growth!