White Papers: Making Lemonade – Four Big Ideas

Author: Kingsford Consulting

Author: Kingsford Consulting

The sky is falling! The sky is falling! We are all doomed, run for your lives. At least thats the message from CNN, CBC, Globe and Mail, CanWest and the like. As the old expression goes, when life gives you lemons, made Lemonade! Over the past few weeks I have been asking 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 who sells 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, 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% inflation, for example, wed 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. Organizations that require new capital to operate (think GM, Lehman Brothers etc) have a financial problem which does not affect directly the whole economy. Which is why your neighbours are still renting movies, paying their staff, buying snow blowers (in my part of the world), 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 5% next year (which would really have the news media in a recession frenzy) and your projections for growth were 15% for next year you may have to settle for only 10% growth. Large, mature stage companies, however, are much more dependent on the overall economy for their performance so a 5% shrinking of the economy will seriously dent the larger companys performance. SMEs in contrast are by definition very 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 tot them! So here are Four Big Ideas to Help You Hit Next Years Targets Idea One: Rather than creating and supporting a large sales channel, consider licensing your know-how and let your new partner invest in the 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 twelve months? Its 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. Ill bet youll find at least one thing that you can do better and possibly create a new industry paradigm that others may find hard to follow. 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 lets just say it took a big spread sheet 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 doesnt mean you have to hold the asset, you can coordinate a lease for your clients on a surprising variety of items. Contact us if you want to learn more. So squeeze your lemons and enjoy the lemonade! Published in November 2008.About the Author:

Kingsford Consulting Ltd. is a Strategy and Business Development firm that provides business planning, market research and strategy development services.

www.kingsfordconsulting.ca

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