NOT ONE DIME MORE UNTIL …. A message from a small business owner to the administration and Congress.

Like many of you business owners, I too recently completed my taxes and cringed at how much of my money is going to Washington DC.  Mind you, I don’t mind paying taxes.  I understand there are roles the federal government has a constitutional obligation to perform (defense, regulate commerce, regulate immigration, coin money, etc…) and as a “customer” of these services it is my duty to help fund them.  I also understand the federal government is not a private company and thus by it’s sheer size cannot behave like one.  Despite this I think it is reasonable to expect they will strive to adhere to common prudent business practices.  The top three as a I see it are: (1) be fiscally conservative and sound (solid balance sheet), (2) be good stewards of the funds they receive from tax payers by searching for ways to remain lean and efficient and avoid waste, and (3) never lose sight of who your customer is and try your best to meet or exceed their expectations.

The recently publicized lavish ($822,000) Vegas trip taken by GSA (government) employees was a gross violation of trust.  Add to this the $523,000,000 dollar federally backed loan given to now bankrupt solar start-up, Solyndra, one has to wonder if there is a business person among them in charge. 

Causing further angst is the latest chant from Washington “we cannot solve our current fiscal crisis with spending cuts alone”.  However it is worded you know this is political speak for - new taxes have to be raised. The conversation then immediately proceeds to who should pay and how much. Here is where I want to stand-up and yell, “STOP!” 

When a business is forecast to have red ink on their balance sheet and they know their customer will be extremely sensitive to any price increase they focus first internally to find a solution.  They start by tackling internal waste. Then they ferret out and eliminate “nice to have” versus “must have” spending. And lastly and most regrettably a company will look at their people – evaluating and cutting layers of management and staff – learning how to do the same with fewer.  It is only after they completely exhausted these stressful steps do they come humbly to their customer and make the case for raising prices.  This is a process that has been taking place and continues to take place in businesses large and small since the very first business opened its doors.

It is time we ask our federal government to do the same thing.  That before nonchalantly asking us, their customer, for one dime more we must insist they exhaust every means to internally bring down their operating budget now.

Let your voices be heard America and tell the folks in DC …..

Not one dime more until each of the 15 cabinet departments (Treasury, Defense, etc…) and the multitude of their subordinate agencies (see entire list here) completes a thorough review and cut of wasteful spending.

Not one dime more until these same agencies candidly review the necessity of all discretionary and operational spending. In a time of fiscal crisis if it is not an absolute “must have” then they should learn to live without it.

Not one dime more until each and every agency conducts a thorough review of management layers, administrative staff and the workforce.  Most companies have to deal with this at some stage in their lives.  The federal government is no different.  A high national unemployment figure is not sufficient rationale for skipping this step.  The goal is an ultra lean organization void of perks.

And finally, not one dime more until Congress reviews every single appropriation ($3,769,000,000,000). Are these “must have” spending or “nice to have”?  I would argue that in the fiscal climate we are in today a $500 million loan to a solar start-up is not a “must have”.

I realize these are painful, difficult steps that will have personal and political ramifications.  Politicians will have to let pet projects and agencies die. Those who remain will have to learn to do more with a lot less. Businesses and State governments have to weather these storms when they are in crisis, our federal government should do the same.

When the spending is actually cut and the excess people let go our legislative and executive branch leadership should report to their customers (tax payers) on the outcome and new state of the federal balance sheet.  Then, and only then should they be allowed to start the debate about how much and who should cover the remaining deficit.  But not one more dime until this is done.

Let’s put an immediate stop to any conversation of tax increases and compel our leadership to prove they can for once do the tough part of cutting waste, non value-added spending, and staff now – not in 2016 or 2020 - NOW! Not one more dime until then.

Let your voice be heard. Call/write your representative, those who are running for office and those who seek reelection, not one dime more until....

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

Getting Your Business Back In Shape – Are you sticking to your resolution?

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 measureable 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!

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

Mike Gomez - Speaker One Sheet

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3 Things That Will Surprise You - Entering the U.S. Market

When consulting for international companies expanding into the U.S. market I’ve picked up on a few common issues that consistently catch the leaders off guard. “I had no idea ….” is how they typically started the conversation.
Let me share the top three:

1) I had no idea that it would take so long to establish a presence here (in the U.S.).

“It seemed to take forever to do all the mundane tasks necessary to get established,” said one client. “What made it worse was the home office had no comprehension of the time or effort it took to get the company up and running. Once they saw I had an internet connection they assumed we were in business and immediately began assigning tasks and planning visits. I had to tell them to STOP!”

Establishing banking credit, securing transportation, making living arrangements, turning on utilities, selecting an office location, furnishing that office, securing a phone and internet service, establishing the proper legal framework and setting up the bookkeeping is time consuming and can be overwhelming especially in a foreign land. Don’t underestimate the amount of time and resources this can demand. And be wary of the business vultures who will prey on your lack of local knowledge. Rethink the traditional start-up model. Leasing temporary furnished and supported office space while you get your bearings can be a prudent alternative and save a lot of the early headaches.

2) I had no idea how geographically large the United States really is.

A client shared this story, “….and after our meeting in Los Angeles we can drive to San Francisco and meet with our customer there before flying back home.” Upon telling the San Francisco client his plan he was embarrassed to discover it can take anywhere from 7-9 hours to drive that distance. Needless to say he had to plan for an additional overnight stay.

The good news is the United States is a large market. The bad news is it is a really large land mass and as such takes an unexpected amount of time and travel budget to get around. For example, the entire country of Germany is slightly smaller than the state of Montana. Spain is twice the size of Oregon. Japan is slightly smaller than California and Israel is almost but not quite the size of New Jersey. You can be certain the shear size of the United States will impact your sales, marketing, and logistics strategy more than you might have first anticipated. Keep this in mind when selecting a site to launch your U.S. endeavor. Being near a major U.S. airport can make life a lot easier for you and your traveling employees.

3) I had no idea that the sales cycle will take this long.

Though I hear this comment quite a bit I doubt this is unique to the United States. I think this would be the case for any foreign small or mid-sized business (lacking name recognition) entering a new market. It seems that no matter how hard you work to get a response to an email, a request for an appointment, a proposal, or a selection decision it always seems to take twice as long as you remember it taking at home.

A client recalled that even after multiple visits she was stunned to hear, “who are you again?” from a business she was calling. Partnering with established U.S. companies can speed this process. Leveraging a well connected business network is also an effective strategy to move you to the front of the line.

Prudent, conservative business decisions accompanied by a well vetted local sales and operational strategy makes the difference between success and failure – even in the lucrative and vast U.S. market. Delaying major expenses such as permanent office space until you become more familiar with your surroundings and daily routines is also a wise move. And finally, leveraging partnerships and a good business network can open the right doors and accelerate the sales cycle immensely.

Welcome to the United States of America.

Are things going as well as you thought? Want some unbiased, experienced inputs to your current strategy and sales plan.  We'd be glad to help.  Contact us here.  The first coffee is on us.

About the author:
Mike Gomez is he founder of Allegro Consulting, a growth specialty consulting firm located in Atlanta, GA.  Allegro helps business to define and implement new growth strategies. Mike has worked in over 20 countries and has an accumulated sale record of $10B.

3 Lessons from those that Failed - Global Expansion

I was asked to give a presentation to owners of American companies who were contemplating a global expansion growth strategy that would take them outside the United States. I decided to share with them some of the lessons I gleaned when working with foreign companies who were struggling to be successful here in America. After all, as someone once said, "Learning from your mistakes is smart, … learning from the mistakes of others is wise".

Here are my top three lessons from those who failed:

1) Exporting or Global Expansion Should be Part of an Overall Strategic Plan and Not Simply Done on a Whim

"Why did you choose to go global? Why now?" When asked these questions I was surprised that most owners did not have an answer other than to say “it was time”; that they succeeded sufficiently in their own country and now it was “time” to take on America. In some cases they came to America on the heel of or at the urging of their biggest customer – another foreign company - who also decided “it was time”.

I would then ask some more basic questions such as how well did you understand your relative strengths and weakness and the opportunities and threats associated with this marketplace before coming here? What did you identify as the top barriers (regulatory, legal, financial) to entry? What plan did you put in place to overcome these barriers? Who are you targeting first for new sales? What is the competition and how did you intend to compel customers to buy your product or service over that competition? Not surprisingly the vast majority who were struggling here in the U.S. did not have answers for these basic questions.

Growing a business in your own country is hard enough. Improve your chances of success abroad by taking the time to study the market you are about to enter. As you build your strategy get an outsider's perspective (preferably a native of the country you are thinking about entering) to make certain you are being brutally honest about assessing your companies strengths as they pertain to this new market. Bottom line - have a well vetted, LOCALIZED, and documented strategy before you launch your undertaking.

2) Don't export more than you must.

Remember, when globally expanding into a new country success will be determined by how well your product or service sells. If it is a product you will be making the case for why or how your product is better than the competitors - price, quality, and/or capability. On the other hand if it is a service you will be emphasizing your unique process and why it is better than the competitors. This is what you are exporting.

Here is what you should NOT be exporting - your country flag, your people, your brochure (see example (above) from German company - sometimes "englishizing" is just not enough), you sales approach, or even your website. The only exception is if any of these elements can improve your chances for opening a door, making a sell or closing a deal.

For example, if you are a German company selling precision machinery in America I can see where emphasizing the German aspect could be a competitive advantage. The same would hold true for France and wines. But if you are a Chinese company selling faucets or even solar panels here in America there is very little the Chinese element brings to the sale. Careful thought and scrutiny must be given before you choose to export these latter aspects (people,website, etc..) of your company because there are very few circumstances where the flagrant broadcast of the country of origin for the product or service actually contributes to the sell. On the contrary, here in America it may cause an unwanted distraction at best or negate any chance of a sell at worse.

3) Beware of ego driven, cash sucking business decisions.

More often than not the reason most companies don't succeed here in America is because they run out of the cash they set aside for this venture. You will note that I didn't say they didn't set aside enough money, because most do. Where they fail is the choices they make, particularly in the first 12 months, on what, where, and how they spend their money.

Elaborate office space, signage, furniture, leased vehicles and homes all for the purpose of "making a good impression" is one sure way to burn through a lot of cash before you find your first customer. Flailing around trying to find a sales strategy and message that works in this market is another way to consume a great deal of cash and time (one in the same). Localizing your sells and business strategy for the American market versus trying replicate the strategy you used at home is one way to prevent this. Putting tight controls on cash by delaying the elaborate office expenses until after you have had time to understand the local market and your true needs is another prudent course.

America is a magnet for globally expanding international businesses. Our large population, high medium income, high GDP, transparent legal system and common language makes it very attractive. But succeeding in America requires you to first understand how we make buying decisions - it is different in subtle ways from the rest of the world. And, like every country, you must guard against the vultures who will prey upon your naïveté. A well crafted localized strategy, a script for your business in America, will help significantly.