By Andrew Penny
This is the next contribution to this blog by Associate Andrew Penny, an Ottawa-based business development and market strategist for B2B companies, and president of Kingsford Consulting Ltd. Andrew’s post is part of our continuing series about the ecosystem necessary to bring technology to market. We welcome your comments.
Global warming, Greek debt crisis, Chinese labour issues, U.S. unemployment… life is tough and running a business with all this change and uncertainty is even tougher … or is it? I say when life gives you lemons, open a lemonade stand!
I regularly ask our clients from a wide variety of sectors how their businesses are going. With few exceptions, it appears to be business as usual. (One of our strategic marketing plan clients, selling software to the retail industry, is having one of their strongest months ever. Another has received an unsolicited acquisition offer – a good one!) Look around you, people are still putting gas in their cars (despite the cost), they are buying groceries, going to school, buying houses, making holiday plans, building bridges, sewers and railways and so on – all things that keep the economy working.
I read an interesting observation that postulated that the problem is a financial one and not an economic one. If we were facing 10 per cent inflation, for example, we’d have an economic crisis – wages and incomes would be out of sync, people would stop buying and selling, and the economy would contract. Currently, this is not the case. organisations that require new capital to operate have a financial problem which does not directly affect the whole economy; this is why your neighbours are still renting movies, paying their staff, buying snow blowers, and so on.
Many of our clients are SMEs, and most are planning for growth. So think of it this way – if the overall economy shrinks by five per cent (which would really have the news media in a frenzy) and your projections for growth were 15 per cent for next year, you may have to settle for only 10 per cent growth. Large, mature-stage companies, however, are much more dependent on the overall economy for their performance, so a five-per cent contraction in the economy will seriously dent their performance. In contrast, SMEs are by definition much more flexible.
As entrepreneurs we can redirect our efforts to wherever the opportunities lie. We can redefine our business model. We can create partnerships and alliances with a single phone call.
If your plans called for new capital, look for other ways to grow; if your market is shrinking, change sectors; if your market is asking for concessions, add costless value; if your market has no CapEx budget, rent it to them.
So here are four big ideas to help you hit your targets
Idea One: Rather than creating and supporting a large sales channel, consider licensing your know-how and let your new partner invest in manufacturing and commercialization. (A client has recently achieved a global presence in Wal-Mart, Canadian Tire, and other top tier retailers in just 12 months following this strategy). Learn more about IP strategy.
Idea Two: Think strategically. Which companies or sectors will be strong over the next six to 12 months? It’s a safe bet that companies involved in infrastructure building will be signing some interesting government contracts. If you are an infrastructure company, stay close to your government partners. If you sell (or could sell) to infrastructure enablers … well you get the idea. Rethink your customer engagement plan.
Idea Three: Add value as your customer defines it. How do they buy from you, what do they buy, where, how do they transport, use, recycle and so forth? Look for ways that you can add value to their experience at low or no cost to you. This extra value reduces your clients’ overall cost and makes it easier to buy from you. I’ll bet you’ll find at least one thing that you can do better – and possibly create a new industry paradigm that others may find hard to follow. Try the marketing scorecard.
Idea Four: Rent It. Would you rather have a sales contract or a recurring services contract? As a founder of Bell Mobility I had my first exposure to the magic of recurring revenue from locked in customers, and let’s just say it took a big spreadsheet to hold all the zeros. If you can turn your product into a service and charge based on the utility the customer obtains, you can avoid the capital budget issue and possibly provide a net savings to your client from day one. And it doesn’t mean you have to hold the asset, you can coordinate a lease for your clients on a surprising variety of items.
So squeeze your lemons and sell lots of lemonade!
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