Drop the excuses
One of the ongoing challenges in 2016 is continued uncertainty regarding the economy. It leaves many companies feeling like they’ll never grow again. But there are strategies that can help you get things turned around.
Here are three strategies Kohl recommends:
■ Pricing. If you haven’t thought about your prices lately, chances are that you’re missing out on revenue with a near 100 percent margin opportunity. I’m continually surprised at the gaps that can be discovered during due diligence. Carefully analyzing your pricing history and ensuring that you’re getting the correct value for your products and services is often a near-term way to boost your bottom line.
In one dramatic case, a software company that Riverside acquired was charging $60,000 for a new product.
After evaluating the value it delivered, it was determined the company could raise the price to $400,000 without an impact on sales volumes. Even if you fear the results of a price increase, you can still stop ‘leaks’ in your pricing caused by unnecessary discounts — that alone can add a 2 percent boost on average.
■ Sales tune-up. Take the time to understand the sales process. Build a formal sales process based on an evaluation of sales techniques, current and prospective customers and your pipeline that is rigorously monitored. Be sure you’re dedicating your sales resources to the right places and clearly communicating a compelling value proposition. Less focus on the most competitive or unrewarding customers frees up resources for new, higher yielding campaigns.
■ Accretive acquisitions. Competitors may also be suffering slow growth, making this a great time to acquire a competitor or two. This can add scale and provide opportunities for synergies for both companies. Growth is rewarding in multiple ways. Winning investments generally have a sales chart that looks like a ruler placed at an angle up and to the right — steady growth every year, no matter what the broader economy does. Now is the time to stop blaming a sluggish macro-environment and to take matters into your own hands.
Don’t be afraid to walk away
Some deals are just so obvious that anyone can see the reasons why two companies should become one. Others aren’t so obviously meant for each other, but an experienced entrepreneur — who can see what others can’t — will see the potential.
And then, of course, there are those deals which aren’t a good fit from the start, but the people involved continue to push ahead anyway, believing that they can make it work or that they have put too much effort into trying to make it work to just walk away.
“It’s always about the people,” Fedeli says. “The people are the most fascinating, the most fun and sometimes the most challenging part.”
Mixon suggests you trust your instincts.
“If you ever sense that the other party isn’t being totally honest with you, it’s time to get out,” he says. “If they tell you something that is not true, or omit something that you really needed to know, that can be just as bad. If you find out something that is totally misrepresented to you, you’re probably looking at a dishonest person.”
In the end, Kohl says business deals can be similar to a marriage.
“On the upside, they can make you truly happy (and help make you a boatload of money),” he says. “But on the downside, it is messy (and expensive) when it ends in divorce. Keep your eyes on the prize — despite all of these challenges. When it works, it can be remarkably fun and life changing for you, your company, your employees and even the community.” ●