The possibilities may be endless, but your resources are not. For many business owners with limited time and money, deciding which ideas to pursue can be a challenge. Here are three ways to prioritize your options for growth:

1. Start with your company vision

The best way to make sure you’re moving in the right direction is to take a step back from all of your ideas and begin by looking at your vision for your company. Who do you want to be as a company? When you have a clear picture of your goal in mind, it will be easier to visualize what steps you need to take in order to achieve it. Without a clear vision you could end up pursuing options that actually drag you in an opposite direction.

2. Use tools to stay objective

While it’s natural to be somewhat subjective, after all business growth is exciting, you don’t want to make decisions based on emotions alone. Try bringing objectivity into your decision-making process by using tools to evaluate and compare your options. When it comes to external, growth, we typically use the Market Criteria Matrix to evaluate the best markets for growth and the Prospect Criteria Matrix to evaluate acquisition prospects. This tool can be adapted to evaluate any opportunity for growth.

Keeping your vision in mind, develop about six key criteria of your ideal opportunity. Next, you develop metrics to quantify the criteria. For example, if one of your goals is to expand your operations to the West Coast, one of your criterion would be location and the metric could be located on the West Coast. Give each option a rating using a 1-10 scale and see how well the options compare to each other and to the criteria you’ve established.

3. Gather data

Making a decision without the proper information can be a big mistake. Conduct research to validate (or invalidate) your assumptions. You don’t have to uncover every granular detail, but it will be helpful to have an understanding of trends and how they will impact your market in the future. One of the best sources of information about the marketplace is your customers. Try identifying the needs and wants of current and future customers. It may even be as simple as conducting a customer survey or asking your sales department for input.

While it can be overwhelming to process through all your options for growth, the good news is that you have many options! Hopefully these three suggestions will help you organize your thoughts as you plan your next steps.

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When you think growing your business in 2017, you probably picture hiring more sales people, opening a new branch, developing additional products or acquiring state-of-the-art technology. Today I want to introduce a new concept for consideration: growing by exiting a business. Before you immediately dismiss the idea, take a moment to challenge your assumptions about company growth and allow yourself to be open to a new perspective. The reality is in some cases exiting may be the best path for growing your company.

Here are three ways exiting can help you grow.

  1. Get Focused – By exiting non-core business lines you can be focus on what you’re really good at. Take P&G for example. Over the last few years the company has adopted a strategic focus and shed over 105 brands in order to focus on 10 fast-growing categories. Shedding these non-core business lines will help P&G become more profitable. You may have some business lines you want to divest so that you can refocus your strategy and resources on what you truly excel at.
  2. Avoid Losses – If a part of your business is no longer profitable, you should evaluate whether or not you should keep going. Maintaining a business simply because you’ve always done so is not a good reason. The world changes and it may be that your customers no longer have a need for this product. For example, it would be crazy to continue manufacturing VCRs in today’s world.
  3. Grow Your Bottom Line – While overall sales or number of customers may shrink if you exit a market, your overall profit may grow. We once worked with an American manufacturer who made millions of die-casting products for various industrial customers. Unfortunately, many of their customers were purchasing cheaper products from China. Faced with this competition, our client decided to reinvent themselves into a maker of specialty components for the aerospace industry. They sold their old equipment and purchased the latest technology. As a result, their customer base shrunk tremendously, but profit rose.

When we hear the word “growth,” we automatically think about “more,” “bigger,” “expanding” not “less,” “smaller” or “shrinking.” While many would never consider exiting a business in order to grow, I encourage you to consider it as you develop your strategic growth plan.

Learn more about growing your business in our webinar 5 Options for Growth.

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It can be easy to get stuck in the rut and slip into a routine. Far too often leaders stay the course simply because “it’s how we’ve always done things.” However unintentionally maintaining business as usual can be extremely dangerous for the future of your organization. The reality is that as time passes, your markets, customers and competitors change. And your business should adapt to these changes as well.

If you find yourself stuck in the same routine, it may be time to take a step back and reevaluate your strategy. Here are some ways to reinvigorate your business plan.

1. Take a Break

First, dedicate some time away from the day-to-day operations of the business to review your strategy. You may think you’re too busy to do this exercise, but if you want your business to succeed long-term evaluating your strategy is essential. Whether you gather your leadership team for an off-site session, or it’s just an hour you spend thinking about it. Take the time.

2. Use Tools

We use a variety of tools to generate new ideas about growth opportunities. Using tools helps leaders gain a fresh perspective. Helps them see their company from a different lens and truly evaluate the business from an objective standpoint. Some of the tools we use include Porter’s Five Forces Model, The Opportunity Matrix, and the Five Options for Growth.

3. Foster Open Dialogue

From a facilitation standpoint, we use a mixture of individual and group communication to draw out perspectives. Prior to any session we usually interview individual leaders ahead of time. These interviews allow executives to voice their perspectives in a safe space and ensure that everyone’s voice is heard and prevent groupthink. If you don’t have a facilitator, you could ask everyone to answer your questions and write down their thoughts prior to the group meeting. Then, when you move into the group session, you will be able to have a rich and meaningful dialogue because everyone has already has thought about the questions beforehand.

Hopefully these suggestions will inspire you and get you excited about company growth.

Have questions? Let’s Talk! Talk to a senior Capstone advisor at no cost, with no obligation and no sales pressure. We guarantee you will value the conversation. Contact us online or at 703-854-1910.

As a leader, it can be difficult to determine the best way to grow your business. Some leaders find themselves stuck in the same rut and struggle to generate new ideas to spur growth. They realize business as usual or what worked 10 years ago will no longer work in today’s market. On the other hand, other leaders have too many, rather than too few new opportunities. With so many exciting options, they may find it difficult to determine which path is best for the company’s future.

Whatever position you may find yourself in, a useful way to explore your opportunities of growth is the 5 Options for Growth Tool. This tool helps you organize the various pathways for growth that are available to your company:

  1. Organic Growth
  2. Minimizing Costs
  3. Exiting the Market
  4. Doing Nothing
  5. External Growth

Each of the pathways listed are valid ways to grow a business. But which one is the right one for you? First, start by listing all of the opportunities that come to mind in each of the categories, no matter how crazy they may seem. Brainstorming in this fashion will help you organize the ideas you already have and help develop new ones. By considering all of the possibilities listed above you can thoroughly explore your options, organize your thoughts and make an informed decision.

Learn more about growing your business in our upcoming webinar “5 Options for Growth” on January 21. CPE credit is available.

5 Options for Growth Webinar
Date: Thursday, January 21, 2016
Time: 1:00 PM ET

Photo credit: Barn Images via cc

Sometimes, a business must first become smaller in order to grow. What I mean is that in order to focus on your strategic goals and respond to changes in demand and in the market, you may need to less of something. This includes stopping a specific product line, shedding customers, or even divesting of an entire business line. This way, you can adjust your strategy and refocus resources (both time and money) on your core competencies so that your business can grow long-term

Take Nestle, as an example. Over the past two years the company has divested of underperforming brands like Jenny Craig, Power Bar and Juicy Juice in order to concentrate on its core businesses.

Most recently, Nestle announced that it is in talks to form a joint venture with R&R ice cream. Nestle stated that it “would contribute its ice cream businesses in Europe, Egypt, the Philippines, Brazil and Argentina to the new joint venture. It would also transfer its European frozen food businesses, excluding pizza.”

By separating its ice cream business from its core businesses, Nestle can focus more on businesses that are aligned with its goal to be a recognized leader in Nutrition Health & Wellness. In addition, divestiture allows Nestle to rapidly adapt to a changing world and market. The mass ice cream market in particular is shifting as consumers demand healthier, fresh food or premium brands. Nestle also has struggled to compete with market leader Unilever. Forming a joint venture with R&R may allow Nestle to focus on more lucrative brands and increase the profitability of the company as a whole.

If, like Nestle, you can identify an area in your business that is not performing well, you may want to take a moment to pause and consider your options. Has customer demand changed? Are all your product lines profitable? You may want to rapidly respond to these changes. It may be as simple as discontinuing a product or service, dropping unprofitable customers, or even selling an entire piece of your business. While it may seem strange to get smaller in order to grow, these activities will help you align your business with your overall growth strategy and position your company for future growth.

Photo credit Christian Kadluba via Flickr cc

 

One of the best ways to grow a business is by exploring different options. You and your leadership team should be willing to discuss and consider new ideas without being intimidated by the unknown or risk. Clinging to business as usual may feel comfortable now, but you may regret it years down the road when your business is struggling to adapt to a changing market. Exploring new opportunities may unlock untapped potential for your business; at the minimum, it will validate your current strategy.

I invite you to embark on this journey of exploration in our webinar, “Five Options for Growth,” on Wednesday, August 19. After this webinar you will be able to:

•Define the five growth options for your company
•Explain why external growth (acquisitions, joint ventures, etc.) can be the best option for your company
•Describe the current state of the M&A market using relevant statistics and indicators
•Begin to develop a formalized step-by-step M&A process for your company

CPE credit is available. Click here to learn more and register.

CVS’s $1.9 billion acquisition of Target’s pharmacy business is one of the more interesting deals in the news for a number of reasons. Let’s take a look at the transaction and explore why it makes sense strategically for both buyer and seller.

With this deal, CVS will have the opportunity to expand its footprint in a rapidly and significantly, predominantly through geographic expansion into the Pacific Northwest, where CVS has a weak presence. The acquisition will also quickly grow CVS’s market share in the pharmacy and prescription drug space. CVS, already the top provider of prescription drugs in the U.S., will become even bigger with this transaction.

On the other side of the coin, while CVS grows larger, Target is divesting.  We often talk M&A in the context of exploring your five options for growth, one of which is exiting the market. Divesting can be an excellent strategy to recalibrate your business and focus on your strategic areas of growth. If an area of business is not profitable or is not in line with your overall growth objectives, you may want to consider exiting the business.

In 2014, Target’s pharmacy business operated at a loss. Given this situation and the complexity of operating a pharmacy business, it makes sense to sell Target’s pharmacy business to CVS, a highly skilled company that has the scale needed to successfully operate the business.

Another interesting part of the transaction is co-branding.  CVS will rebrand Target’s clinics as Minute Clinics and add 20 new clinics in Target stores. 1,660 drug stores inside Target stores will also be rebranded as CVS. This move makes sense for both companies hoping to attract more customers by offering complementary services in one location. People may go to a Minute Clinic for same-day care or to fill a prescription and then decide to go shopping in Target. Or, they may be already shopping in Target and then decide to go into a Minute Clinic.

Of course, the devil is in the detail when it comes to execution, but hopefully CVS and Target will be able to fit all the pieces together in order to be successful.

Photo Credit: Mike Mozart via Flickr cc

Have you considered all your options for growth?

I have found that some leaders are limiting their potential for company growth because they fail to examine all the possible ways to achieve it.

Some are stuck in copycat mode, constantly mimicking the strategies of their competitors and playing catch-up. Others struggle to come up with new ideas. Even leaders of companies that are growing may be missing out on key opportunities.

Five key options to consider when it comes to company growth are organic growth, minimizing costs, external growth, exiting the market and doing nothing.

Even if you think you know which option is best, I recommend you consider them all to create a complete picture of the possibilities that lie before you. This equips you to make an informed decision about the best way to grow your company.

Capstone will be exploring the five options for growth in our upcoming webinar on December 11.

You will learn to:

  • Define the five growth options as they apply to your company
  • Understand why external growth (acquisitions, joint ventures, etc.) can be the best option for your company
  • Gauge the current state of the M&A market using relevant statistics and indicators
  • Begin to develop a step-by-step M&A process for your company

Don’t let opportunities pass you by. Learn how to best position your company for success by joining us for this foundational webinar.

Date:  Thursday, December 11, 2014
Time:  1:00 PM ET
CPE Credit available.

Register: http://attendee.gotowebinar.com/register/3419240731938664450

Capstone CEO David Braun will present “Strategic Alliances, Joint Ventures and M&A – the Route to Success?” at the 2014 European Base Oil & Lubricants Summit in Alicante, Spain on September 18.

The two-day conference brings together leading executives and experts in the lubricant and base oil industry from established Western Europe and U.S. markets and from emerging markets, including Central and Eastern Europe, India and the Middle East.

Over 150 C-suite, senior-level executives, directors and managers will attend the summit, including representatives of such industry leaders as Chevron and ExxonMobil.

In his presentation, David will challenge attendees to consider their five options for growth as the base oil and lubricant markets face new challenges and regulatory developments. Strategic alliances, joint ventures or mergers and acquisitions can help companies identify new opportunities and ways to grow.

“I am eager to engage leaders in discussion about proactive growth and hear their analysis of market dynamics and trends,” he said.

The conference will focus on the global base oil trade, analysis of the European lubricant market, challenges and opportunities for automotive and industrial lubricants, regulatory developments and technology advancements in lubricants.

Photo Credit: Lars Plougmann via Compfight cc