Heal Thyself Small Business and In-Turn Heal This Econonomy - What Small biz & Start-ups Can Do to Prevail Again and Rescue Our Economy

It is no secret (except to folks in Washington DC) that it is small businesses who have led us out of every recession in our history (50% of all jobs and 65% of new jobs). While large corporations hoard money for acquisitions and to invest in innovative technologies to replace humans (because they can afford to) it is the small business owner who judges the horizon and takes the risk to hire talent to grow. Likewise it is the entrepreneur who decides to invest his/her life savings and those of family and friends for a start-up idea or franchise ownership. This is where new jobs are formed. And this is how rampant national under-employment or unemployment issues get resolved.

A rather startling bit of historic news broke a few years ago about startups in America. In 2008, emerging startups for the first time in history trailed business failures. That means more business are failing now than are new businesses entering the market to take up the slack in jobs. 

Some great insight into this trend can be found in this article by Jim Clifton, Chairman and CEO of Gallup. He had a quote in the article that truly captures the challenge we face in America.

"Let's get one thing clear: This economy is never truly coming back unless we reverse the birth and death trends of American (SMB) businesses." 

My intent here in this two-part article is to candidly address these two topics (the birth and death trends of SMBs). I will share a perspective - why and how to improve - that comes from 14 years of consulting for privately held businesses and advising/mentoring startups.

Part 1 - Why are they failing?

To fix the problem we have to understand the problem. Let’s first discuss business failure rates. According to the Small Business Administration, a business started in 2004 has a 48% chance of still being around today - half are gone. The number-one reason businesses fail is rather obvious - they flat run out of money. But how does this occur?

Try these reasons (compiled research of Moya K. Mason, “What causes small businesses to fail.”) :

• Choosing a business that isn't very profitable.
• Inadequate cash reserves.
• Failure to clearly define and understand your market, your customers, and your customers' buying habits.
• Failure to price your product or service correctly.
• Failure to adequately anticipate cash flow.
• Failure to anticipate or react to competition, technology, or other changes in the marketplace.
• Overgeneralization - be everything to everyone.
• Overdependence on a single customer or customer set.
• Uncontrolled growth.
• Believing you can do everything yourself.
• Putting up with inadequate management.

This list is very comprehensive and accurately captures what I have observed. Sadly, these are all preventable, everyone of these causes are, if only business owners would follow the very basic business rules - the very first of which is have a plan, or in the case of a startup, write a business plan (before you launch).

A war is being waged against business/strategic plans.

There are folks out there, especially in the start-up world, who are advocating that business planning is outdated. Here is an entry from one such “expert” who titled his blog, “Why you Should Ditch Annual Business Plans” 

"Business planning is broken. In a world that is constantly changing and increasingly complex, business leaders can’t plan for a predicted future anymore. By the time an annual business plan is ratified the market has moved on to places that nobody could have imagined. If businesses are unable keep up with changing customer needs they stagnate or decline.

Leaders need to abandon traditional business planning and embrace the creative process instead. Business plans should look more like sketchbooks than spreadsheets. What do sketchbooks do? They help artists unlock ideas, to experiment and learn, to stretch boundaries, and to build talent. Artists take their best ideas from sketchbooks and use them to create their best work.

Businesses should operate as a similar collection of experiments. The testing and refining of new growth ideas ensures a constant connection with a changing customer base. Aggressive growth happens when leaders are able to continuously shift investment to those ideas that show the most promise." 

His contention, like so many taking this position, is that the marketplace is changing SO rapidly it is just not possible to plan. He is also suggesting the best and most respected business owner (CEO) is the one who stands up in front of his/her employees with his sketch book of ideas on where he is taking the business. Do you want to follow this leader? This is all utter BS and this mindset explains in part the sad failure rates for start-ups and established businesses alike.

Let’s look at the very basic elements of a business/strategic plan:

• What basic human problem am I solving?

• Is my solution unique?

• Do people want to buy my solutions? What is my proof?

• How big is the marketplace that I am selling to?

• Who are the competitors/trends I should pay attention to?

• What skills/people do I need on-hand to sell and deliver my solution?

• How many widgets will I have to sell to cover costs and be cash-positive?

• How long can I operate with cash on hand?

If you look at these 8 basic questions and compare them to the reasons for failing you have to wonder why business owners fight this basic step of business. I‘ve heard a few excuses over the years and share them here.

“While poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second.”

Because of this, some (especially politicians) will immediately point their finger at our banks and other financing institutions and blame them for this problem. “If they would only loan more we would solve this problem.”, they will claim. There are even those suggesting the criteria for loans guaranteed by the Small Business Administration should be lowered to “untie the hands” of the banks.

STOP!

Asking banks and our government to assume larger risks is not the answer. While it is unimaginable to find the CEO of Coke, Facebook, Home Depot or Uber unable to intelligently discuss forecast sales, cash flow, profits, trends that may impact their market, the competition they face and long-range growth strategies, these types of conversations with SMB’s and startups are dubious at best. So to suggest easier access to US government-backed loans is crazy talk. Let’s not make this mistake again. We’ve seen and felt what happens when our banks and government invest in speculation (Solyndra).

Heal thyself American business owners and save our economy (play the Battle Hymn of the Republic now).

America needs you, small and medium sized business owners. We need you more than ever! There is nothing Congress, or the President can do that will have a more dramatic impact on our economy and jobs than you can by dismissing those who irresponsibly suggest there are shortcuts to success in business. Or those suggesting you can Tweet, or social media, or robo-call your way to growth. Dismiss the notion that simply having an idea and ambition is all that is necessary to launch a start-up. I implore you to help heal our economy by healing your businesses. Become a disciple for businesses owners around you by first following the basic tenets of a growing business - have a plan, execute to the plan. Inspire your workforce with a vision of the future and a realistic written growth path. Show you can lead. Show you can set goals and achieve them on a recurring basis. Show you can be a responsible steward of someone else’s money (a bank for instance) by repeatedly making prudent, plan-based decisions on hiring, marketing, capital equipment and services. Let your profitable sales win-rate reveal how well you know your customer and respect your competitors. And finally, surround yourself with smart, critical thinkers who will not shy away from challenging you or telling you what you need to hear. 

If you do these things you will do more to transform your business, the lives of your employees, and our national economy than any new President, Congress or trade deal could ever dream of doing.

And my message to Washington DC - get the heck out of the way!

Part 2 will examine the second issue facing America - the declining birth trends of SMBs.  

About the author:  Mike Gomez is the President and CEO of Allegro Consulting, a business growth specialty firm in Atlanta, Georgia helping privately held business owners find new avenues for sustained growth for over 14 years. He is a start-up mentor at ATL Tech Village and Four Athens Tech Incubator, guest lecturer at GaTech and UGA, and prolific business speaker.  His growth focused articles have appeared in the Atlanta Journal Constitution, ATL Business Chronicle, Gwinnett Business Journal, and the Business Insider. www.allegroconsultant.com

@GrowthGuy's 8 Rules for Startups - from 14 yrs. of Business "Accident Investigations"

In my past life I supported aircraft accident investigations. The primary purpose of these investigations was of course to find the root cause for why the accident occurred. Equally important was the transmittal of the findings and conclusions to the entire aviation community (pilots/crew, maintenance, designers, air traffic control, etc...) in an effort to prevent the accident from happening again. (Learn from a real jet crash: “What a jet crash can teach a business owner” ).

Sadly, in my 14 years of consulting for small businesses and startups alike in Metro Atlanta I have visited too many business "crash" sites. In an attempt to prevent a crash, or better yet, improve your chances for success, I share these findings from those who faltered of failed. This list is intended to be complimentary to Mark Cuban’s outstanding 12 Rules for Startups published in Entrepreneur Magazine back in 2012.

1. Plan it on paper first. What problem are we solving? What differentiates our solution? What is our pricing strategy? Who pays? How do we attract customers? How do we sell to these customers? How long before cash positive? These are just a few of the questions one should be asking BEFORE you create a logo, a website, or even establish a name for your company? The process of writing succinct answers that stand up to tough honest scrutiny is harder than you think but it is an exercise that is well worth it. Though this business planning process will not guarantee success it will most certainly improve your chances tremendously. (Want to know “What to Include in Your Business Plan”)
2. Start ‘soda straw’ small. “I want to sell our solution to lawyers.” “I want to provide our services to any tech startup.” “This new CRM solution is for ANY small business.” These are real examples from start-up founders who each had a minimal sales force. The problem with this approach is the size of the customer target dwarfs the typical staff and resources available to communicate with this audience in any meaningful concentrated manner. The more effective approach is to carve out a narrow segment of the target demographic (by geography, specialty, etc...) and concentrate your resources accordingly then prove your business model can succeed with that segmented customer. Then, and only then, grow by pursuing new customer demographics in “one vector off “ increments.
3. Be transparent. Tell the team what the plan is (there is a plan - right?), who are the competitors, why are we different, how are we going to grow, what the company can/will look like a year from now, and how will we make that vision a reality. Saying that the plan is in your head just doesn’t help anyone. Worse than that, keeping the plan a ‘secret’ provides for the use of that number one of all excuses when goals aren’t met, “I didn’t know.”.
4. Lead. People want to be led. That is a fact. A great work environment is one where there is personal satisfaction for directly contributing to the growth of the company. I heard from one CEO of a Fortune 100 company that his leadership style was to “set expectations then inspect”. Perfect and succinct. So lead by assigning clear roles and responsibilities, set measurable expectations then inspect to ensure your plan is being followed and the team is getting the support, training and resources they need to do their jobs.
5. Have a sales process. Place as much emphasis on the sales process as you do about making the product or delivering the service. Sales is a respected profession and critical to the success of any company. So handing the responsibility to the most dynamic person, best golfer, best joke teller, or best looking person on your team is probably not the best approach. Sales is a process - the process of gathering knowledge about your customer’s problem so that you might devise a solution to best solve it. It is therefore critical that your sales process reflects how your customer buys similar products or services. Much like other specialty roles such as operation, finance, and accounting, sales too takes skills, training, and expertise. (Learn here about “The Business Owner’s Role in Supporting a Sales Team”)
6. Measure the right things. But don’t over measure. Taking the temperature of the company is important to gauge it’s health and how well your team is performing to the plan (there is that word again!). Here are a few of my favorite things to measure: qualified leads (marketing), win-rate/renewals (sales), defects/rework/on-time delivery/production cost (operations), operating cash flow (finance).
7. Be miserly. Especially about “non-value-added” expenses. If you would hesitate at all to itemize the expense on a customer’s bill then think twice about spending the money. Example: new office chair, plants, company flat company, especially in a startup, so treat it as a precious resource .... because it is. (Here is a good article about cash flow management: 4 Biggest Causes of Cash Flow Management )
8. Seek out advice and be coachable. Being a good lawyer doesn’t automatically mean you have the experience to be the CEO of your newly formed law practice. Same thing holds for a gaming coder, software developer, or a doctor, engineer, or a chemist. And lastly just because it was your idea or invention doesn’t mean you are equipped with the skills to lead and grow a company. Sad to see an owner finally grasp, “You mean the problem is me?” just before the business is shuttered. Worse is everyone around him/her already knew this. Running a growing thriving company is hard and requires talent and expertise. If you have not gained that expertise through varied job experiences then seek out those experts and LISTEN and ACT on their advice.

 

Need help with you Metro Atlanta, Georgia start-up?  Let's have a cup of coffee. Contact me here. 

About the author. Mike Gomez is President and CEO of Allegro Consulting, a growth specialty firm in Atlanta, GA. Allegro has been helping Georgia’s private business owners to plan and execute strong growth strategies since 2002. Mike is a strategy and sales process evangelist and coach with a tool chest built on direct experience in international sales ($10B), strategy and program management. He is an advisor at Atlanta Tech Village, judge for Next Top Entrepreneur, a prolific speaker, writer, former aerospace engineer, and pilot of both aircraft and helicopters. 

Thinking Strategically (versus Tactically)

January always seems to be a month for owners of start-ups and established companies alike to reflect on their business.

Do I want this year to be different than last?

Do I want to deal with the same issues (people), have to overcome the same challenges (sales win-rate), work the same hours (long), have the same number of sleepless nights (too many)?

Most will know in their gut that a different outcome requires change.  And for this ever so brief period of time they are on the cusp of thinking strategically about their business.

But sadly, I have observed over and over again that they quickly revert to tactical thinking when searching for solutions. A new website. A new lead generation service. New CRM software. New social media initiatives ("we are going to be serious this year about blogging").  I have even witnessed an owner decide on the spot to invest in a booth design and commit to attending two expos as her solution to bolstering two previous years of lackluster sales. You can imagine the investment that tactical decision will cost.

Steven Covey in his book, The Seven Habits of Highly Effective People, coined the phrase, "begin with the end in mind". He shared this lesson:

"Begin with the end in mind means to start with a clear understanding of your destination.  It means to know where you're going so that you better understand where you are at now and so that the steps you take are always in the right direction."

Here is my business interpretation of his lesson:

"Begin with the end in mind means to start with a clear understanding of your strategic objectives.  It means to know what you want your business to look like in 3-years (sales, operations, people) and, based on where you stand today, be certain the tactical decisions you make are always in-line with the strategic plan."

I have observed that most business owners are fairly comfortable thinking tactically. In fact they thrive on it. There is nothing that makes them feel better about themselves and their role in the company than solving a tactical problem. Strategic thinking, however, is a less common trait.

I was going to write about what it takes to think strategically but I found an author who nailed this topic.  Paul Shoemaker of Wharton's Mack Institute identifies and shares the "6 Habits of True Strategic Thinkers" in this outstanding Inc. article.

Strategically plotting a point on the horizon for your business and letting that be the beacon to guide tactical decisions is how business growth is most efficiently achieved.

Want to build a growth strategy for your metro Atlanta, Georgia business?  Let's discuss this over a cup of coffee.  Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a strategist, sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. He is also a mentor at Atlanta Tech Village and Four Athens Tech Incubator. www.allegroconsultant.com

Overcoming Stalled Growth

David Cummings, founder of Atlanta Tech Village, has a great blog site.  In October, he wrote a blog titled, "When Growth Stalls".  Having seen this issue in a wide spectrum of businesses I felt compelled to share my insights to a problem that brings about panic, regrettable spot decisions and actions, and doors being shuttered.  David observed correctly that stalled growth can be attributed to numerous factors. Here are just a few I have personally observed with clients:

(1) Externally caused: new competitors (same product or better product), market saturation, market disruptors (Uber, for instance), technology shifts, new consumer/business trends, regulatory changes, new Google search algorithms that push your site to page 20.

(2) Internally caused: excessive spending on non-value activity, in-effective marketing spend, bad hires, no plan (long or short), loss of largest client to rival, pursuit of non-core business opportunities, loss of core competency, lack of respect for competition.

The first challenge to overcome stalled growth is to accurately identify the cause (more likely causes). 12 years of consulting experience says that you, the owner/founder, may not be the best person to uncover these causes. After all, stalled growth did not happen in an instant and we humans have a remarkable way of seeing only what we want to see.

There is a great Harvard Business Review study/article titled, “Evolution and Revolution as Organizations Grow” that has achieved "classic” status because of its long standing relevance. The study involved thousand of companies from all industry sectors. It concluded that companies go through five stages of growth. Each stage is preceded by mini “revolutions”. These revolutions can reveal themselves in dramatic ways such as the loss of a major customer.  But they can also be insidiously subtle, a marketing initiative released prematurely or one of your team failing to know  pricing changes before talking to a new customer.  The author concluded from the data that growth occurs when leadership recognizes those telltale signs and evolves both management style and operating practices to address them. The companies that don’t “evolve” stagnate or die.

Here is an excerpt from the article: “The problems at these companies are rooted more in past decisions than in present events or market dynamics. Yet management, in its haste to grow, often overlooks such critical developmental questions as, Where has our organization been? Where is it now? and What do the answers to these questions mean for where it is going? Instead, management fixes its gaze outward on the environment and toward the future, as if more precise market projections will provide the organization with a new identity.”

Stalled growth has huge implications. These conditions add weight to the already burdensome challenge of being a business owner. Don't let ego prevent you from welcoming an outsider's perspective to determine the causes. This is not the time for guessing and attacking what you “think” are the contributing factors.  Such an approach can delay recovery at best or accelerate the death spiral.

Want some help to define a new growth path for your metro Atlanta, Georgia business? Let's talk about it over a cup of coffee.  Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a growth strategy and sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. He is also an advisor at Atlanta Tech Village and Four Athens Tech Incubator. www.allegroconsultant.com

The Handoff - A Business Owner's Role in Supporting A Sales Team

I've just heard this story too many times not to share it as a learning moment.

I received a call from a salesperson asking for advice as he struggled to meet his quarterly sales quota. I assumed he was calling looking for new sales techniques or particular guidance on moving a client to close. But this was not the case at all. Here is how the dialogue went:

Salesperson says, “I’m selling a product in a market where I have a competitor selling the exact same thing.”

I replied, “Same thing? You mean same features, same everything?”

“Yes”

“Are you more price competitive?”

“No, not really. We offer trade in of older equipment to bring the price down but so does our competitor”

“What about service?”

“Yeah, we do support the customer better than they do.”

”That’s good. But will your customer pay more for this better service?”

“No.”

“Interesting, so tell me what kind of direction have you received from the owner of the business you work for?”

“What do you mean?”

“Well, given the market realities you’ve outlined, how does your owner expect you to win new business? Is he doing things to separate you from this competitor? For example, specializing in a certain niche (becoming experts and thus the preferred vendor) or using marketing and strong advertising techniques to build brand preference (aka, Colgate vs Crest toothpaste)?”

“No, the only guidance I was given was, “Treat it like it’s your business.”

Even the best salesperson will under-perform or fail under these conditions.
  
It is not the salesperson's job to identify target customers and invent ways to differentiate.

The role of the owner, President and/or CEO of a business is to equip your sales team with the tools to be successful. At a minimum this includes the following:

• A list of “target customers” 
• those inline with the customer mix outlined in your short and long-range growth plan
• who match the profile of those who will value your product, expertise and/or differentiators
• The compelling story to support why clients should buy your product over competitors
• Who are the competitors the sales team can expect to face and what differentiates us from each
• A supportive marketing (lead generating, branding, demo tools, social media, samples, brochures, etc...) strategy
• The right sales tools and support (travel budget, conference attendance, CRM, bid and proposal, quoting, etc...) - tools that actually help the sales team do their job versus those that help the owner monitor the sales force.

Given that only 28% of a salesperson’s time is spent in front of the customer and about 50% of that time is actually selling (the rest is prospecting (35%), relationship building (10%), and training (5%)), it is imperative, you the owner, equip him/her with the tools to ensure it is the right prospect and that he maximizes the productivity of that time.

In my 12 years of consulting "under-performing sales" has been by far the number one pain point with the blame typically placed squarely on the salesperson or VP of Sales. It is not long into the engagement when humility kicks in as the owner discovers it is their lack of a long-range plan, a clear understanding of what makes them different, a detailed knowledge of their competitors, and an ineffective or non-existent marketing strategy that are the real culprits.

Want to give your sales team the best chance for success? Let's talk about your metro Atlanta business over a cup of coffee.  Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a growth strategy and sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

Is your business an orange among a lot of oranges?

I gave a talk to business owners about the importance of having a targeted marketing and sales strategy (#5 on my 10 Essential Elements to Long-Term Growth). In that talk I showed why companies who thrive are laser focused in defining to whom they want to sell their products or services. This is especially true with start-ups or small companies where a limited marketing budget and a small sales force is the norm. The analogy I use most often to stress this point is the game of darts. How silly would it be to play darts without a dartboard? Yet I routinely see owners liberally handing out darts to their sales team with no dartboard in sight - all the while still expecting them to regularly hit a bullseye (customer).

It was after this presentation that a question was posed, “How do I decide who to target?”

Bingo!  That is exactly the question I wanted these business owners to ponder.

I’m sorry to say that you won’t find the answer here in this blog. Why? Because the process to decide this requires an extensive internal company assessment and external market analysis.

I can, however, give you one step in that process. Answer this question, "How are you different from competitors in your industry or sector?" Figuring out what’s different about your business will then lead to identifying companies who value that difference - and thus whom you should consider targeting.

Unfortunately, most of us are in “commodity” businesses. In other words, within our industry sector we are simply an orange sitting on a stack of oranges. Unless you've intentionally done something to separate yourself, this is likely true whether you are a marketing firm, lawyer, dentist, any broker, web designer, staffing company, accounting firm, bank, dry cleaners, insurance company, real estate agent, etc ... Are you getting the picture? Even a company like Boeing is an orange. The difference for them is the stack of competing oranges is rather small (only four commercial aircraft builders in the world). If we could all be so lucky to compete against just four rivals.

The challenge for every business owner is to decide (1) do I simply compete as an orange - knowing I will have to out-market (advertise, SEO, etc...) all the other oranges in my sector and accept that price will drive most decisions or (2) narrow the competing field by specializing - become unique - a blood orange, naval orange, or clementine for example. There is no right or wrong answer here. The downfall comes by being unaware, in denial, or worse yet, think you have something unique when in fact you don't.

Here is a quick example. Cordell and Cordell is a law firm. I think we all know how many law firms there are in this world (that stack of oranges is a mile high). Recognizing this, Cordell and Cordell chose to specialize - they became a domestic litigation firm further specializing in men’s divorce - a blood orange (no pun). In doing so, they reduced the size of the competition significantly. And by fully embracing this strategy they know clearly who they want to serve (target) as a customer. They have even gone so far as to own and manage the content of mensdivorce.com and mensrights.com. Brilliant!

I have a friend who once defined his firm as a marketing company. He eventually recognized he was in a very crowded market (lots of oranges (marketing firms) here in Atlanta). Every engagement became a competitive race to the bottom in price. He decided to change course, to specialize in just one aspect of the marketing spectrum - marketing communications, even further specializing in presentations. He created a brand called Presentation Tune-ups and is now much clearer about who specifically he is targeting for his specialized service. And much like the lawyer example above his relationships, first built around presentations, eventually encompasses other marketing related services.

So ask yourself, are you an orange competing against other oranges? If so, how will your customer choose your orange from the rest on the stack? What does your dartboard look like? Or, have you made yourself a unique enough orange to warrant being placed in a different bin, with the ability to command a higher price, and a much clearer understanding of the bullseye your marketing and sales force are aiming at.

Tired of being an orange among all the other oranges?  Let's talk over a cup of coffee how we can define a way to make your metro Atlanta business unique.  Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping Georgia business owners take their company "to the next level". He grew his very first client’s business from $8M to $35M in just two years. Mike is a sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

Is your sales strategy right or wrong? How do I know?

A prospective client was sharing some stories from an ongoing large sales opportunity they are pursuing. He concluded with this statement, “I think we have the right strategy now.”

I replied, “How do you know?” That caused a long thoughtful pause.

He admitted he had no way of knowing the answer to this question. And based on his use of the word "now" he had thought other strategies they had pursued was the "right strategy”. So how much confidence can you place in his latest declaration?

Let’s take a moment to explore what makes something right or wrong.

We have all taken test before and told whether we got an answer right or wrong. In this environment someone made a decision and documented what he/she views as the right answer to a given question. Your answer is deemed right or wrong by making a relative comparison against this known criteria. But what about passing a right or wrong judgment on something like the paint color your teenage son chooses for his bedroom. Most would say this is not possible as there are no hard rules from which to make a relative comparison. Not so fast my friends. I’d argue that if Dad has the final say on the paint color for the room then he and his personal tastes will determine right or wrong.

So where does a sales strategy fit in this spectrum. Is it vague and thus fall into the category of personal tastes or is it more concrete like a school exam?

My experience says it is a combination of the two. And the way you determine if the strategy you chose is right or wrong is by making a relative comparison to what you know about the formal and informal rules of how the buying decision will be made and the personal views and opinions of the people participating and/or influencing the process.

People make buying decisions not companies. And because they are people, their personal biases and interests will always be a factor.

Knowing which biases and how much of a factor is your sales challenge. Having a formal process in place to make this relative comparison is your company’s challenge.

Are you chasing an important complex sales opportunity in metro Atlanta?  Want to improve your chance of winning by subjecting your sales strategy to some outside seasoned scrutiny?  Let's talk over a cup of coffee.  Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

5 Lessons Building My New Fully Responsive Website

Every three years or so my company website starts to look and feels stale and dated. I don’t know if there is a study out there to back this up but this is what my 12 years of consulting experience (8 years with a website) has taught me. It has become clear that people’s expectations for a website “experience” are constantly evolving. Social platforms like Twitter, Facebook, Pinterest, and Instagram, and YouTube have influenced the web audience to desire bite sized pieces of information preferably through media such as videos and telling photos. On line stores like Amazon too have influenced expectations along these lines.

I am a consultant. I help businesses who are struggling for one reason or another. My clients are serious people burdened and kept awake by serious challenges. If things have gotten to a point where they need an outsider to help you can bet they are prepared to research options. My old website was tailored to that research. It provided the client some things to think about in the way of solutions and why I was the best guy who could help. But now even this audience wants the same type of information presented differently - in meaningful bite sized nuggets.

Oh, and one other observation. Two years ago less that 1% of my web traffic came from devices other than a desktop. Today 21% of my traffic is from mobile or tablets.

My old content ladened, static website had run its course. (Good bye old friend - you served us well).

So you might be asking, because of the title of this article, why I took on the challenge of designing and building a website myself rather than contract the project to a web developer or marketing firm. I have three reasons for doing this. First reason, given the importance a website is to any business I feel as a consultant I must know enough about the process to credibly advise my clients through it.

Secondly, so I know what kind of effort and skills are involved and thus the value attached to such a project. And the third reason is to fully understand what a business owner must know about his/her business and customer BEFORE he/she begins this undertaking.

That said here are the top five lessons I learned from this one-month project:

1. Know everything about your business - your growth plan and your target customers. This is not something you casually hand off to a marketing firm or web developer to figure out. You should be able to articulate your 3-year strategy (your web presence is but a tool to help get you there), details about current state (customer/product mix etc...), your target customers, your competitors, and the landscape in which you compete. With regard to your customers, you should know how they shop, what they value about your company, what products and services they favor, and what their expectations are when they land on your site. (By the way, this is by far the most requested service of  Allegro Consulting - growth strategy development.)

2. Know the difference between the skillsets of a web developer versus a marketing firm. Web developers are best equipped to bring functionality to your website whereas marketing firms bring creativity and design. Asking a web developer about layout, colors or the appropriateness of artwork would be like asking the carpenter to design your house. Likewise, expecting a marketing firm to efficiently create the coding for a web form or transaction integration would be equally outlandish. To get the most out of this important marketing spend, task the experts to do only what they are most trained for.

3. Don’t outsource the content. Once again if you know your business and you know your customer then you know best how to connect with them. Sure it is ok to have a third party edit your writing but you have to take charge of the messaging. This is not something you outsource.

4. Web audiences will scroll. It used to be that you had to worry about putting the most important content “above the fold”.  This is no longer the case. Thanks to Facebook and Twitter people are now use to scrolling and will automatically do this when on a website. Here is a great article on this subject.

5. Preserve your URLs. If you have a strong Google ranking be careful about how you introduce change to your website - especially the URLs I learned it is very important that you do whatever you can to preserve your old URLs (exactly) even if they are not an ideal name for your pages. Don’t throw them away as there is valuable Google history there. If you can’t use them in your new rebuilt site use a 301 redirect rather than discard. Here is an article about that.
Let me know what you think of my new website. BTW - I used a pretty impressive tool to build it - a company called Webflow.

Remember, your website is a marketing tool and the role of marketing is to attract "qualified" prospects. It is incumbent on you to understand what is a "qualified" prospect and how they go about researching then buying your type of product or service. It is also your job to know what differentiates you from alternative choices. Don't spend the time or money creating a new website until you know this information cold. These are the topics covered in a well run strategic planning engagement. And this is what Allegro has been doing for metro Atlanta businesses for over 14 years.

Let's talk about your business over a cup of coffee.  The first cup is on me.  Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a growth strategy and sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

The Worst Sales Direction EVER! “Treat it like it’s your own business.”

I've just heard this story too many times not to share it as a learning moment.
I received a call from a salesperson asking for advice as he struggled to meet his quarterly sales quota. I assumed he was calling looking for new sales techniques or particular guidance on moving a client to close. But this was not the case at all. Here is how the dialogue went:
Salesperson says, “I’m selling a product in a market where I have a competitor selling the exact same thing.”
I replied, “Same thing? You mean same features, same everything?”
“Yes”
“Are you more price competitive?”
“No, not really. We offer trade in of older equipment to bring the price down but so does our competitor”
“What about service?”

“Yeah, we do support the customer better than they do.”
”That’s good. But will your customer pay more for this better service?”
“No.”
“Interesting, so tell me what kind of direction have you received from the owner of the business you work for?”
“What do you mean?”
“Well, given the market realities you’ve outlined, how does your owner expect you to win new business? Is he doing things to separate you from this competitor? For example, specializing in a certain niche (becoming experts and thus the preferred vendor) or using marketing and strong advertising techniques to build brand preference (aka, Colgate vs Crest toothpaste)?”
“No, the only guidance I was given was, “Treat it like it’s your business.”
Even the best salesperson will under-perform or fail under these conditions. It is not the salesperson's job to identify target customers and invent ways to differentiate. The role of the owner, President and/or CEO of a business is to equip your sales team with the tools to be successful. At a minimum this includes the following:

• A list of “target customers” 
• those inline with the customer mix outlined in your short and long-range growth plan
• who match the profile of those who will value your product, expertise and/or differentiators
• The compelling story to support why clients should buy your product over competitors
• Who are the competitors the sales team can expect to face and what differentiates us from each
• A supportive marketing (lead generating, branding, demo tools, social media, samples, brochures, etc...) strategy
• The right sales tools and support (travel budget, conference attendance, CRM, bid and proposal, quoting, etc...) - tools that actually help the sales team do their job versus those that help the owner monitor the sales force.

Given that only 28% of a salesperson’s time is spent in front of the customer and about 50% of that time is actually selling (the rest is prospecting (35%), relationship building (10%), and training (5%)), it is imperative, you the owner, equip him/her with the tools to ensure it is the right prospect and that he maximizes the productivity of that time.

In my 12 years of consulting "under-performing sales" has been by far the number one pain point with the blame typically placed squarely on the salesperson or VP of Sales. It is not long into the engagement when humility kicks in as the owner discovers it is their lack of a long-range plan, a clear understanding of what makes them different, a detailed knowledge of their competitors, and an ineffective or non-existent marketing strategy that are the real culprits.

Want to grow your metro Atlanta business?  Let's talk over a cup of coffee about what we can do to give your sales team the right tools for success? Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

4 Steps To Give New Luster to Your Mentor Program

“Great facilities, a dynamic/stimulating environment and a diverse group of experienced, accessible and talented mentors”  Few will argue that these are the three pillars of a great startup accelerator or incubator. Places like the Atlanta Tech Village (Atlanta, GA), Four Athens Tech Incubator (Athens, GA), and the Capital Factory (Austin, TX) provide the proof. I doubt anyone reading this article will be surprised then to see a budget line item for these facilities called “building maintenance and upkeep”. You are also likely see a budget line item for “events and functions” to foster the environment they desire for “serendipitous interactions” (as Atlanta Tech Village calls it). But what about that third pillar - the mentors? What should operators of these accelerators and incubators do to proactively maintain the luster of their mentor program? As a mentor in two of the above named facilities I’d thought I share a few recommendations.

(1) Teach - a. to cause or help to learn how to do something by giving lessons, showing how it is done, etc. If you think about it from your client’s perspective (members of your incubator), the idea that you can get something (advice) for free is downright suspicious; there’s got to be a catch. This is a mindset that will have to be overcome. The other hurdle is the misguided view that being an entrepreneur means you go at it alone, with an energy drink, the shirt on your back and the few coins in your pocket. By proximity accelerators and incubators encourage interaction among peers. But specifically reaching out to advisers will most certainly require a nudge or two. So as you can see, having an A-list of mentors on your roster is not enough. Without a proactive program to encourage mentor engagement both sides will lose. The startup will miss out on valuable advice and years of lessons learned and the mentors will be underutilized and begin to look for other venues where their talents are sought.  

(2) Promote - a. to help the growth or development of, b. to look after or assist the growth of by labor and care, c. to provide publicity for Here are a few ideas on how you can promote your mentors and your mentorship program - thus encouraging engagement:

• When mentor holds “office hours”, make sure it is publicized well in advance through all your different communication channels. On the day itself, be sure it is well known that they are on-site.
• When a mentor attends an event at your location or an event you are sponsoring - take a moment to recognize their presence.
• Follow their Facebook page, their LinkedIn company page, their blog, and their Twitter handle if they have one. This is easy stuff but important because these deeds reveal to your community the level of admiration, trust and respect you have for their expertise.
• Introduce, through periodic articles or interviews, each mentor to your community so they can gain greater insight into who they are and what make’s them tick.
• Hold periodic mentor meet and greets.
• And when worthy advice is shared, let the community know about it through channels like Twitter or Facebook.

(3) Include - a. to contain in a group or as part of something A mentor should never feel like an outsider or a visitor to your accelerator/incubator. Make your access policy decisions with this in mind. Things to consider here:

• Special badging to enter facilities
• Invitation to attend events.
• Discount or no fee to attend sponsored events
• Internal access to accelerator calendar/portal/WiFi.

Yes, you may run the risk of people abusing these privileges. If they do, confront them early. If they persist, dismiss them. I don’t believe this is a problem worthy of keeping your mentors at arms length and on the outside looking in. On the contrary, the more they feel like an important pillar of your organization the more rock solid their support and contributions will be.
  
(4) Cull - a. to reduce or control the size of by removal of especially weaker animals as a means of population control Every once in a while it is important to cull the herd, to keep those that take the role seriously and contribute to the environment you are trying to foster, and weed out those who don’t. Though this may be awkward (to fire a mentor), it is best for the mentors and the clients you serve. Mentors, when actively engaged, can be a difference maker for your accelerator or incubator clients. The experience, wisdom and tough love they share can speed up success or the critical think necessary for a pivoting decision. But it’s not enough to just have a compelling list of mentors on your roster. Like your other pillars (the facilities and atmosphere), your mentor program too requires care and nurturing. Be proactive managing your mentor program. Teach your clients how to use them. And then share the success stories and their impact. Soon you will find that your mentors are as sought after as the Red Bull in fridge.  

Update 2016: Atlanta Tech Village has implemented all of these recommendations.  They have made it a priority to promote their mentor program in 2016 to see if the quality and number of interactions between the Villagers and the mentors improves.


Want to talk more about these recommendations or your mentor program? I'd be glad to.  Feel free to contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping startups and establish businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a growth strategy and complex sales expert, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

8 Growth Tools Every Business Owner Should Know, Have and Use

You need a good nail-gun, a saw and more to be a carpenter. To be a car mechanic you need a wrench, a computer code reader and a good socket-set to name a few of the essential tools. If you are a regular mountain climber then you likely have good rope, and plenty of high quality caribiners in your tool chest.  So, what are some of the important tools required if you are the CEO of your start-up or established business. 

#1 Business Plan (for start-ups): An exercise and accompanying document you complete PRIOR to launching a new business. Properly done it will force you to be clear on what your business is all about, the product or service you deliver, how you plan to deliver it, and supporting evidence for why customers will buy from you over competing alternatives. It will also tell you how much money you need to keep the business operating effectively before you are producing sufficient cash flow to cover operating expenses. Experience says you will find this document will be obsolete in the first six months of operations as real life will be surprisingly different than your assumptions. Regardless, this step is critical to success.

 #2 Strategic Plan (for established businesses): An exercise and accompanying document that combines your future vision of the business and real life market realities to define in a measurable way what your company will look like 2 to 3 years from now. It is the spot on the map you select before getting into your car for a road trip. Customer mix, revenue, market penetration, operations and people are all addressed in this document. A well done strategic plan will leverage you current strengths, acknowledge and address weaknesses, exploit market opportunities, and counter external threats. Everyone in your company should know your strategic plan - this is how you create an “aligned” workforce.

 #3 Tactical Plan: An annual document that defines specific actions (beyond day to day operations) to be taken by specific individuals in a specific time-frame (usually quarterly) that will incrementally move your company one step closer to the Strategic Plan goals. If you were to envision your business as a movie, this would be the “script”. You are the director and your employees, the actors. You are tasked with completing this movie on time and with no overruns.

 #4 Targeted Customer: Exactly who did you design your product/service for? It is not “everyone”. Your target customer is the bullseye of your sales dart board. The better you are able to describe the critical attributes (job, race, gender, age, income, business, hobby, etc...) the better and more efficient your marketing and sales force will be in finding and winning them.

 #5 Sales Strategy: A process where you analyze the depth and breadth of your market opportunities, the intensity of the competition you expect to face, and given resources you possess to devise a sales plan of attack. Similar to war planning you may choose a broad strategy that secures a large number of small victories or concentrate your resources to score a big impactful strategic win. It defines how and where you will deploy your limited resources as well as the weaknesses of you competition you plan to exploit to win new business.

 #6 Marketing Strategy: Marketing is all about generating qualified leads for your sales team to close on. Developing a marketing strategy is a left brain activity as it involves analysis and critical thinking. A well done marketing strategy involves analyzing your customers (who they are and how they buy) then exploring and selecting the most effective tools (web, social media, billboard, collateral, TV commercials, car wrap) within given financial constraints to garner their interest. You compete and hire marketing experts and service providers for their right brain creative skills to implement your strategy.

 #7 Sales Process: A replicable and thus written method for how you take a warm lead and turn him/her into a happy customer. As you might expect this is one of the most important steps in your business processes and should not be relegated to the personal techniques of any given salesperson. In addition to more consistent win rates, a defined sales process will allow you the owner to engage in a conversation with any of your sales team and know exactly who is in the funnel and where they are in the sales cycle.

 #8 Critical Processes: Those unique, replicable steps your company completes to generate leads, win business, deliver a consistent product or service and collect financial compensation. Documenting these steps provides two major benefits, (1) reduces risk by creating a back-up should you be unfortunate to lose a critical employee with all of the corporate memory due to a job change or accident and, (2) it establishes a baseline upon which to develop improvements. Say your company name is XYZ then what makes your product an XYZ product or service performed and delivered the XYZ way?  

Are you a metro Atlanta business who may need to 'borrow' some of these tools to help your business grow? Let's talk over a cup of coffee.  Contact me here.


About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping startups and establish businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a growth strategy and complex sales expert, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

Getting Your Business Back in Shape (re-released and update)

It is the fourth week in January and the annual migration of the New Year’s resolution crowd is already departing gym’s across the United States; not to be seen again until next year.

At the start of each new year there is an enthusiasm to get back into personal shape. This same phenomena is present in the business world. Each year business owners declare, “This year will be different. We will have a well thought out strategic plan. We will have an actionable yearly tactical plan from which we will judge our progress. We will hold regularly scheduled staff meetings to review our plans, assess the actions of our competitors, and examine our financial health. Yes, 2012 will be different!”  And by the end of January.... they are back into their old routine, with the fire drills of each and every day dictating the rest of the year’s agenda. And like the fitness birds migrating through the gym each year, this cycle will sure to be repeated over again the next year.

I want to share with you a different story; one with exciting results and very much analogous to the business world, in hopes that it will inspire you to stick with your resolution.

At the end of November, a good friend of mine sent the following text message, “I need help.” He wanted to get back into shape and after numerous attempts on his own, he felt the aid of an outside expert was needed. I agreed to be his personal trainer. Before we began I wanted to hear what goals he had in mind in order to assess if it was realistic. He stated two specific objectives; (1) get back down to 175 lbs and (2) have a pool-worthy body for a vacation he planned in late March. We then looked at his current state; 5’11” and 198 lbs. We had a little over four months (18 weeks) interrupted by Thanksgiving, Christmas and New Years, to lose 23 lbs. and build some muscle. His goals were possible, but would require a very strong commitment to reach them. He agreed to commit to a plan that I would guide him to establish and we began.

Much like the human body, a company without steady work “on” the business versus “in” the business will too become out of shape and lose the market strength, they once enjoyed. So, exactly how do you get back into shape, or get into shape for the first time ever, and what can you expect from the process?

1. Look in the mirror. Are you happy with the current state? Is the performance what you expect? Are sales meeting your expectations? Are you stronger? Are you still as agile and responsive as you once were? How do your customers view you? What will you look like in 3 years?

2. If you don’t like what you see or are not sure what direction you are going do something about it.

3. Set measureable, realistic goals to be completed at a specific time. In the business world this means capturing your vision, and balancing that with a clear unbiased view of how you stand relative to the competition and in the market for which you chose to compete. Steve Covey said it best in his book, 7 Habits of Highly Effective People, “Begin with the end in mind”.

4. If you have never done step number three or don’t know how, don’t let your ego prevent you from engaging an outside expert. A business strategist brings two very valuable tools to the table; (1) experience working with a variety of companies in various industries from which you will benefit, and (2) they will stop you from drinking your own bathwater (declaring something is core strength when in reality it is not all that different from your competitors).

5. Craft a written plan and stick to it. This means you review the plan regularly and use it to guide how you and your team utilize your time, invest your resources, and select your people.

6. Accept the fact that change will involve some pain. Operating leaner is hard and demanding. Holding employees and yourself accountable to specific and measurable goals is also tough. Fight through the pain knowing what you are doing is for the long-term health of your company.

7. Beware of excuses used to revert back to old behaviors or not complete an assigned objective on time. It is not physically possible to complete everything in the fourth quarter because you either procrastinated or came up with reasons for why it couldn’t be done earlier in the year as originally agreed.

8. Most likely progress will be quicker for younger companies than older. That’s just nature. Older habits and patterns of behavior are tougher to change. But don’t use this as an excuse not to.

Now for the rest of the fitness story: The first few weeks were quite hard. He was a bit embarrassed being seen lifting the small amount of weights on the bar. He complained of being constantly sore. He would try to throw out an excuse or two for skipping a day; “Bad knees” and “I forgot my brace” were the excuses he used when I first suggested he start a running regiment. However, to his credit, he always showed up for our workouts. I knew we had turned a significant corner when on week eight he suggested going to the gym on one of our off days. That same week he set a goal to run a 5K. He had embraced the change in behavior. I was no longer pulling him along. His own goals and the measurable progress were now providing the motivation.

With eight weeks to go he is down to 182 lbs., having lost 16 of the 23 lbs. we targeted. He could barely run for 20 minutes when we first started, but can now run a full 5K in 30 minutes and is working to improve his time. 12 pushups in a row are now 40. He has doubled the amount of weight he is able to lift and fits into clothing sizes that he has not fit into since college. We’ve recently incorporated swimming into our routine and he is already thinking a triathlon may be a worthy goal for 2013.

Like your body, there is no shortcut to getting your company back into shape. It requires an investment in time and resources and an absolute dedication to follow through. The rewards however can be amazing. Your leaner, stronger company will be better able to compete and adapt effectively in an increasingly demanding, competitive, and ever changing world market. So, get back into the gym!

February 2014 UPDATE: Change means introducing new behavior.  The longer it is practiced the less it becomes 'new' and the more it becomes the norm.  But this requires a certain level of forced discipline over time.  My friend did not engage in this new behavior long enough to make it a habit - the new norm.  First his visits to the gym dropped off.  Then less running.  And yes, he was loaded with excuses for why.  Then the old eating habits returned.  At first these were exceptions, then the violations became
more forgivable.  Then no forgiveness was necessary.  The weight came back. The strength faded.  All progress was lost.

Change is hard for an individual.  It is even harder for a business because of the multitude of individuals (employees) who have to become both believers and practitioners of the new way. As the CEO, you set the tone. Are you sticking to the plan? Are your employees? What are the repercussions for failing to hit goals and milestone? As you can see here, it is easy to revert to the old way.

Need a personal trainer to get your metro Atlanta business back in shape.  Let's talk over a cup of coffee.  Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping turnaround businesses wrestling with stagnant growth. He grew his very first client’s business from $8M to $35M in just two years. Mike is also a prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

Before you consider Going Global, Go Louisiana and Go Texas

Going global can be a very smart and lucrative part of any growth strategy. But dealing with foreign trade laws, logistics, business practices (formal and informal), languages, and time zones can introduce substantial risks to your business model. It is because of these risks I advise my Georgia-based clients, “Before you go global, prove you can go Louisiana and Texas.” 

Why do I suggest this course of action?  By setting up the processes and procedure necessary to be successful in another state you mitigate several of the inherent risks of going global.

Delivering a product or service locally should be quite familiar to you.  If you are a successful company then you likely know your target customers well, you know the competitors you face, and how to get product to their door or how to deliver the specialty services you are known for.  All of this is familiar territory.  Now what would you do if I challenged you to be equally successful in a state a time zone away.  How would you pick the state, how would you sell your product or service there (direct or through distributors), how would you specifically deliver the product or service? How would you support those sales from Georgia?  How profitable would you be doing this?

Now what if I were to challenge you to do this yet again in a state say two time zones away?  What I hope you will do is develop documented processes for analyzing new markets.  This can be done on your own or by engaging a service provider.  And with each new state you will apply lessons learned and fine tune these “export” processes.  The same holds true for processes governing customer support, logistics (delivery of the product or service), employment, quality control and accounting procedures (state taxes).

By going Louisiana and then, say, Texas before going global you will have put in place and exercised many of the same processes and skills necessary to be successful abroad.  These include:

• new market analysis
• competitive analysis
• logistics
• new territory marketing
• new territory sales
• learning and adapting to new tax laws
• learning and adapting to local business laws
• learning and adapting to new accounting procedures (taxes)
• providing customer support after local business hours

The good news is you will be mastering these new skills in an environment where the language is the same, the business culture is quite common, the sales techniques similar, and the overarching governing business and tax laws something you are familiar with.

If, after you succeeded in doing business in Louisiana and Texas, you still feel going global is right for your business, you will only need to master a fairly small number of processes still unfamiliar to your business. Some of these include:

• doing business in a foreign language
• Foreign Corrupt Practices Act
• currency exchange
• foreign and U.S. trade laws

Don’t get me wrong these can be quite intimidating challenges to overcome and will require expert assistance.  But by now your company will have already proven to themselves it can adapt and succeed in new environments. This is just one more evolution. 

So remember my phrase, “Before you go global, prove you can go Louisiana and Texas.”  Your success will be that much more assured.

Mike Gomez is the founder of Allegro Consulting, an Atlanta-based business growth specialty firm.  He has served as a program manager and business development executive in both Fortune 100 companies as well as small businesses. He has conducted business in over 20 countries. Mike is a guest lecturer at GaTech on international business and at UGA on business planning and sales strategy. He can be reached by phone at 678-908-8433 or by e-mail at m.gomez@allegroconsultant.com. Visit http://allegroconsultant.com

“I’ve fallen and I can’t get up!” - Staffing needs and the early stage start-up.

So you have this great idea for a business.  You are prepared to make the sacrifices to self finance until sales can support the company.  You’ve analyzed your personal strengths and weaknesses and recognize you lack some of the critical skills required to get the business off the ground.  You need help.  But you can’t afford the full time salaries to hire the talent your business demands. 

What do you do?

This is one of the recurring scenarios I have seen with start-ups.  It’s an ugly sight really; watching a founder run full speed into this brick wall of reality.  And my advice is always the same.  If you do not have a solution to overcome this particular weakness then STOP. Don’t continue to build, or develop or spend time or money on this business idea because you will fail.

The staffing shortfall I see most often is the role of sales – sales strategy and implementation. Most founders first believe that selling is the easy part, that it’s something they can do themselves.  Or, there are those who attempt the, “if I build it, they will come” philosophy of sales. And finally, the last group, believing that social media and email blast will be a sufficient sales force.  They eventually learn that selling is crucial to the business and requires a level of expertise and experience. 

So, assuming you need more talent than is available through a free intern, what are the options for securing such talent? Let’s run down the choices.

1. Commission only.  This approach will have the least impact on cash flow because you only pay when sales are generated.  Yes, you might have to pay upfront for car allowances, cell phones and computer charges but that’s about it.  However, you’ve heard the saying, “you get what you pay for”?  This applies here.  Those who will take a commission only job are no doubt self starters but they will also ditch you in a heartbeat for a better offer. Their bottom line is the driving concern not your company nor your customers. If your product or service is a fairly easy sell and the rewards flow quickly this may be a good option for your start-up business. On the other hand, if it is a longer more challenging sales cycle and pay-out of commissions will take longer, I have found that more time will be spent by your new salesperson revising his or her resume and looking for a better gig than actually selling.
2. Base pay plus commission.  This is by far the surest method for hiring the exact talent you need – qualifications, industry experience, past performance.  The downside of course is impact on cashflow. You will be writing checks before any sales are generated.  Striking the right balance between the amount of base pay necessary to secure talent while keeping the motivating force of the commission will be one of your tougher challenges. 
3. Deferred pay plus commission.  This is an interesting variation of the base pay plus commission approach.  Here you and the candidate agree upon a market base pay and commission structure.  Then, predicated on current and future cash flow projections, you decide how much of the base pay you can afford to pay now and how much you will ask the prospect to defer to a specific date or milestone. The prospect is basically letting you use his pay as operating capital until there is sufficient cash flow.  Here are the four areas available for negotiation (flexibility) with this approach:
1. the length of the deferral,
2. the interest rate applied to amounts deferred,
3. the amount of compensation deferred, and
4. the pay mix or combination of cash and noncash forms of compensation that are ultimately paid.

This can be a particularly compelling tactic if there is a milestone on the horizon that will trigger an influx of new capital (meeting a performance standard, venture capital infusion, achieve positive cash flow status). As you might expect significant trust in the business idea, the business model and most importantly the management team to execute and monetize the idea is critical. As founder it is your job to instill that trust and make absolutely certain you pay the deferred amounts with interest as promised.  

Having the right talent on hand to support your start-up is crucial to success.  Attracting that talent can be a challenge with limited cash flow.  It starts with identifying the roles and responsibilities you expect that person to fulfill.  Follow that with writing down the qualifications and experience you feel are necessary for that person to be successful. Lastly is outlining a cash flow appropriate compensation plan that you will use to attract that individual.  

Mike Gomez is the founder of Allegro Consulting, a business growth specialist.  He has served as a program manager and business development executive in both Fortune 500 companies as well as small business. Through the use of sound yet simplified business processes he has helped Georgia companies achieve remarkable growth. Mike is a guest lecturer at GaTech and UGA and a mentor at FourAthen technology incubator. He can be reached by phone at 678-908-8433 or by e-mail at m.gomez@allegroconsultant.com. Visit http://allegroconsultant.com