New Product Positioning

I had a great meeting with the CEO of one of our client companies today. The meeting was to review the progress the company was making toward their business plan and financial projections. Now that we're half way through the year and June's financial statements are closed, it's a great time to dive deeper than we normally do on a monthly basis to see how things are shaping up.

We spend time asking lots of questions. Was our market forecasting correct? How effective has the new product positioning been? How do we see the last half of the year shaping up? Are there ways for us to improve the financial performance of the company? Are customers paying in a timely fashion? How can we improve cash flow? We ask these and lots of other questions to identify ways to improve the company's results.

But let me back up for a minute. The reason that we're able to compare actual results to their budget is because we created the business plan and projections in the fourth quarter of 2009. You know the old adage, "If you don't know where you are going, any road will take you there." Running your business is much the same. Taking the time to work through key strategic planning elements can go a long way to putting you on the right road. Executing the plan and monitoring your results can keep you there.

'Build your brand'. It's become a highly popular buzz phrase in marketing, technology and social media circles. Building a brand is a process, some would say a life-long undertaking for any company or product. It takes innovation, great customer relations and cosistent messaging.

If you're the leader of a company, small business or not -- it's just as important to build your personal brand. You are the public face of your operation to the customers, the media and various business partners. In meetings, in the headlines and cocktail hours, people will relate or be drawn to the personal brand you have developed and project. You had better start working on it if you haven't already.

Inc. Magazine has some pertinent suggestions to help you start.

Pick an area of expertise
So you're going to be an ambassador for your brand. But what do you want to be known as an expert or pro in? Maybe you run a marketing firm - your specialty can't be that broad when building a brand. What do you bring to the table that no one else can? Maybe you're great at the design aspect of marketing or maybe you know all of the technologies that can assist in marketing efforts. Just make sure you've zeroed in what it is you can do for others that really sets you apart.

The web is your friend
After you meet a potential employee or business partner or hey, your daughter's boyfriend -- where is the first place you go to get the 'real' scoop? Google of course. You should automatically assume this is where people are going to check out you, your company and anything else you've published or are associated with. You should be making sure your website as up to date and state of the art as possible. Also be sure any other sites you have profiles on are updated and grammatically correct such as LinkedIn, Facebook, etc.

Writing and blogging
Making your perspective readily available for anyone who may be interested in it shows you care to communicate with others and you know how to intelligently express your opinions. It can also help you make connections with others, whether they be for business or personal purposes. If you blog regularly and invite comments, criticisms, etc. you open the door to two-way communication that can ultimately benefit you. (i.e. what if someone sends you an idea on new products or has insight into a global marketing strategy)

Make some headlines
Being quoted in stories or making an appearance in any form of media can benefit your personal brand, positioning you as an expert people go to for insight and information.

There is so much one can do strategically to enhance your personal brand which will ultimately benefit your company as well as yourself. It's not about publicity, attention or making yourself known. It's about establishing who you are, what it is you're about and being sure you can be seen in enough places where those who need to find you can do so.

I don't eat mayo on anything - I'm a mustard girl all the way, spicy mustard more specifically. Mayo has always grossed me out. It's not about the calories, after all, when one consumes either mayo or mustard a large beef patty with cheese is typically involved as well. To me, mayo just looks like it immediately clogs arteries. To Jerry Murrell, founder of Five Guys Burgers and Fries, mayo is an essential part of his business philosophy.

When selecting all of the ingredients to be used in his burger chains, Jerry and his four sons (hence the name) tasted 16 different brands of mayonnaise. Now THAT is the kind of commitment to quality that provides for future success. Jerry serves only the highest quality ingredients, regardless of cost to the company. Using fresh instead of frozen meat not only costs Jerry, it costs his customers. The result? They don't care. Sales for 2009 topped out at $483 million. People would rather pay more for burgers made from the best that taste great.

It is Jerry's unwavering dedication to making sure his products taste good, his employees are treated well and his stores are clean that has launched Five Guys into the world of franchising that actually works.

Jerry simply knows how things should be done and doesn't compromise, something every small business owner should pay attention to whether they're just formulating their business plan or business strategy or they are preparing for a new product positioning. What aspect of the business are you passionate about? How do you believe things should be done? Take advice from others, yes, but stay true to your vision. Even if it requires you ingest far more mayo in one sitting than is natural.

What's one thing you have been committed to since starting your business or just starting your career? For more insight from Jerry Murrell, check out Inc. Magazine's 'How I Did It' piece highlighting one of the best burger chains ever.

Many of our clients are start ups or young companies with fantastic ideas on very tight budgets. It's not an easy process to start a company, become profitable and maintain that growth. Never mind initiating efforts to garner public exposure for your wonderful company and recruiting brand ambassadors through strategic marketing efforts.

There may be a new trend in public relations that will allow smaller operations or start ups to begin PR efforts on a tight budget. In a recent Inc. article a Los Angeles-based PR agency is offering a bundle of services for a flat fee, sort of like your phone bill. You pay a monthly fee and receive a specific amount of anytime minutes, nightime minutes and text messages. Except with these PR services, you won't be charged overage fees.

The packages vary but can include such things as media list building, pitch creation, 20 press releases a year and basic wire distribution. The minimum commitment for their services is three months and the longer you do business with the firm, the more tailored your service package bundle can become.

PR is an extremely powerful tool that can help point your operations in the right direction for profitability. Reaching out to the public should be a key element in any marketing strategy, product marketing plan, new product positioning or product launch plan.

The basic concepts that lie behind being an entrepreneur.

You're creating something out of nothing, you should build a team around you that will support your goals and vision who also have the capabilities to help you expand. They should be creative, smart innovators, like you and have some diverse backgrounds to bring skills to the table you may not have.

Hiring a team for a startup is different than hiring for an older business. For the latter situation, you should be looking for organized, experienced people who are also comfortable with being leaders. They need to reliable and have high ethical standards. And don't forget, good communicators!

What about when you are expanding beyond an initial or leadership team? You should have some protocol in place that touches on expectations for employees, meetings and compensation practices. This will make it easier to bring new people into the mix. The other consideration, anticipating a change in communication. More people means more diversity regarding personality type and communication preferences. Getting a system in place that will make sure you're facilitating positive communication will be essential.

Let's talk about some common mistakes entrepreneurs make formulating a company, product and culture. Often times, these can occur in the hiring process, it's easy to hire people who look great on paper but aren't committed to your mission. Unfortunately, their lack of motivation can unravel projects quickly.

Don't hold on to control too tightly. Learn to let go. If you trust the people you've hired, at some point, taking your hand off the back of the tricycle is a must. They should continue moving forward as you stop and watch them go - freeing up your time to think strategically about growing your baby (company). And be understanding of mistakes, they happen to everyone from time to time.

Most important, accept and embrace your identity as an entrepreneur. Take your passion and communicate it clearly to investors and employees. Use these facts about what it means to be a leader and what it takes to succeed to develop an organizational development strategy, marketing communication strategy strategic HR plan that will give your passion a blueprint.

You are completely responsible for building the new world as your company will be part of it.

Why do you have a blog? Is it to garner publicity and brand recognition in a cost-efficient manner? Is it to drive sales and growth? If so, you might be going about achieving those things in the wrong way says Joel Spolsky, founder of Fog Creek Software and management columnist for Inc. Magazine.

In his most recent column, Joel asserts that too many blogs focus simply on the companies themselves, new hires, acquisition announcements and other company events. This type of communication doesn't recruit regular readers or garner interest in actually doing business with your operation.

Joel asks, what's the proper formula to turn a blog into an area that helps generate revenue?

The answer:

"...an entrepreneur's blog has to be about something bigger than his or her company and his or her product. This sounds simple, but it isn't. It takes real discipline to not talk about yourself and your company. Blogging as a medium seems so personal, and often it is. But when you're using a blog to promote a business, that blog can't be about you. It has to be about your readers, who will, it's hoped, become your customers. It has to be about making them awesome." (Advice from well-known game developer and author, Kathy Sierra)

There you have it. Blogging should be about making those you seek to serve or do business with even better.

As you develop a marketing communication strategy that incorporate business blogging, be sure to align your communication with the needs of your audience just as you would in any other marketing activity (new product positioning or development, product launch plan, etc.)

Every company has a different approach to communicating internally. Meetings are used to discuss company issues as well as brainstorm to develop plans for clients and delegate responsibilities for the execution of said plan.

Getting together is necessary to discuss the latest market research forecasting, new financial models or a product launch plan. Yet, sometimes they simply equate to lots of talking, little doing.

Yet, when run effectively, meetings put everyone on the same page and foster positive relationships throughout a company as well as the resulting creativity that occurs when minds meet.

MarketingProfs offers actionable advice to run a meeting that doesn't waste your time or your clients' time.

    •    Set a clear agenda when you schedule the meeting. The best outcomes happen when everyone is fully prepared to discuss the topic at hand.

    •    Ask for full participation. Instead of letting one or two voices dominate the conversation, create a collaborative environment in which all ideas are welcome. "Encourage everyone to speak up," he suggests, "but respect those that require time to process what they're thinking by not putting them on the spot right away."

    •    Don't lose track of time. According to Stephens, you should set a limit—and stick to it. "When the time is up," he notes, "the meeting is over. If you didn't accomplish [your] goal you'll plan accordingly next time won't you?"

    •    Establish what each participant will do next. Make everyone accountable by distributing an immediate summation of each team member's responsibilities.

I would recommend adding an area to your business communication strategy or strategic plan that deals with internal interaction and meetings. Establishing best practices for regularly occurring meetings will foster positive communication and increased productivity.

Ah, I laugh even as I type it but let's ask ourselves the recent question posed by Inc. all the same, 'What Business Lessons Can We Learn From Avatar'? More specifically, what can entrepreneurs learn from the man behind the curtain (if you will), legendary director James Cameron?

Here are some takeaways...

It took Cameron 10 years to make Avatar. Sure, some startups launch quickly and the money follows soon after. That's rare, building something substantial that stems from your passion and results in a quality product takes time. Long term thinking will benefit you and your company.

Cameron first conceived and wrote Avatar in the mid '90s. His vision was incredibly detailed and in effort to stay true to the original concept, he waited years to raise the funding necessary to do so. Getting your own vision to stick to will provide you with the fortitude needed to execute and achieve your goals.

The film has grossed an estimated $1.6 billion thus far and is still in theaters. It cost $500 million to make. The takeaway, invest. There's a time to be thrifty and there's a time to spend money in order to make it. You just need to figure out what time it is for your operations.

We're not suggesting you throw your financial model out the window, but the way Cameron has handled this blockbuster hit could be incorporated into your current business strategy, new product positioning or global marketing strategy.

He thinks big, he acts on passion and he most certainly gets results.

I was approached recently by the CEO of an upstart software as a service company to consider helping his company develop a corporate finance strategy and raise the requisite capital. We talked at length about the application that the company had built, the customer base, the channels that the company sold through, and the market opportunity. We also talked about some of the obstacles that the company faced in order to be successful.

It appeared to me on first blush, that while the product was a great solution, the "problem" wasn't painful enough to the prospective customers to cause them to beat a path to the new application or even make the purchase if proactively presented with the solution. But that was only my first reaction and I've been wrong before. We needed to dig a little deeper.

I offered to review the business plan and bring in our part time CIO to help assess the technology and the opportunity. But before we had received the information for our discovery process, we received an interesting call from the CEO.

The company had decided to put everything on hold. Everything. The board had met over the weekend and decided that it would take too long to pull together the necessary funding to continue the next phase of the product development plan. The other option would be to attempt to grow the business organically but they didn't feel that could be done successfully either.

What initially appeared as an incredibly large target market was actually not nearly as large as thought. The challenge? The pain factor, or lack thereof, that I mentioned before. I was afraid of that...

It's difficult for early stage or startup companies to consider spending time or money on market research - largely because both resources are so scarce. The other concerns are that asking prospects for feedback and input could "let the cat out of the bag" too early, cause challenges with meeting deliverables, create competitors, or put intellectual property at risk.

All of these concerns are legitimate and should be addressed and treated with caution. However, the risk of spending time in production or development ahead of completing a thorough market research process can cause greater problems down the road.

If you have a great idea that you are considering turning into a product or business, work with an individual or firm that can provide you with the market research services to support business plans for small business. You'll be glad you did and you'll be better positioned as a result.

No, what we're talking about has nothing to do with airports, terminal, security checkpoints, etc. Today we're talking about Twitter again. More specifically, we're talking about the growing popularity of an off-shoot networking tool called FourSquare. First let me say that if you're still fighting the near necessity of allocating some resources to investigating how your operations could utilize and benefit from Twitter, you may be fast losing ground to key competitors.

Now, Foursquare. What is it? As defined in a great post from Marketing Profs, Foursquare is,

" ...a location-based social network where users “check in” wherever they might be.
Whoever has checked into a specific location the most is crowned Mayor and part of the social network’s appeal is this sense of competition for the title of Mayor in key locations."

I can already here many "why do I care where other people are eating lunch or who flies out of Indy's airport the most often?". Well, bring out the most recent marketing plan or marketing strategy you have on file. What initiatives do you have place to connect with customers? Do have any promotions, contests or similar activities scheduled for new product positioning on the horizon or as a part of a brand marketing strategy? If not, you should.

Here are some fantastic ideas from Drew McLellan (we'll only share a few as there are many, please read the whole post, I promise it will get your creative juices flowing):

Give the Mayor his/her Due: Imagine the local pizza palace declaring that on any given day…if you are the Mayor of their palace, you and your party dine for free.  (Who wouldn’t love to announce that to your friends or the kid’s baseball team?)

Buddy Up: Imagine four or five businesses working together to create a fun scavenger hunt of sorts that requires you check into each locale…and then you enjoy some huge discount or prize package that features all of their offerings.

Newbies Welcome Wagon: When you check into the dry cleaners for the first time, those laundered shirts are just a penny each.

And Drew acknowledges, his ideas are only scratching the surface of all the potential impact Foursuare can have on your marketing initiatives, brand awareness and customer connection. When you're writing a marketing  plan, I'd advise you give both Twitter and Foursquare a fair shake, possibly including them.

We meet with people literally every day. We have people into our offices for introductions, to discuss the potential needs of their companies or operations and how we might assist them in their goals. We meet with each other to get on stay on the page.  We meet with current clients to share with them market research, build business plan strategies or develop a product marketing plan for a new service or product they plan to roll out. Our conference room is always busy and often we're on the road, meeting our clients where it's most convenient for them.

Unfortunately, sometimes meetings can become a waste of time if they're not run properly and people don't demonstrate proper business etiquette. After all, running effective meetings is a way to build positive relationships with clients and prospects. Here are some tips we found and liked:

1. First decide on how formal your meeting will be

2. There is a skill in inviting the right people to a meeting

3. Prepare a meeting agenda in advance and circulate this to your attendees - remember that meetings can come in all different durations, so get people’s attention by having weird duration meetings

4. Use meeting ground-rules to help avoid speaking for the sake of speaking.

And, as the title reflects, don't be late, ever.

How do you find and recruit new customers? Do you buy traditional advertising or offer special promotions for current customers to do recruiting for you? Do you rely on word of mouth from your most loyal followers?

Regardless of which strategy you have tapped to bring in new business - a clear approach must be identified concerning how you will put your company in front of customers and staying visible and top of mind for those making purchasing decisions.

Social media is steadily becoming a force to be reckoned with in terms of a marketing strategy plan. Using interactive mediums to connect with consumers and customers, encouraging their support of your brand is a valuable approach that is quick, inexpensive and effective.

This piece in Inc. positions Twitter as a resource to find and develop sales leads. How? One restaurant chain featured posted live links to coupons at specific locations where they wanted to see traffic spike. The real-time nature of Twitter increases the chance they'll actually be used.

Announce the release of new products on Twitter where you can also link to more details, post photos and best of all, instantly connect with customers to solicit feedback. Use the search function to see what people are saying about other products in your space, competitors or your company itself. How do key demographics perceive your industry? This is all valuable information you can quickly get a pulse on by being present on Twitter. And what better way to go after sales leads than to be equipped with the most recent conversations and information about your market?

Twitter also allows you to instantly connect with customers - find someone tweeting negative things about a product of yours? Tweet them back, in a friendly manner ask to know more about the issue they experienced and determine what you can do to correct it. You can actually solve a problem right as it happens. Imagine that.

So why not incorporate a Twitter campaign into your marketing strategy or possibly a product development plan or product development strategy? It can help to put a human face on your product or company, something today's business people and general consumers both crave. It can also encourage employee involvement, fostering feelings of goodwill toward the main operation as their voices are being given a platform from which to be heard.

And, bottom line is its free and you can spend as much or as little time 'joining the conversation' as you like.

I have a rule I'd like to introduce. If you're not familiar with Norm Brodsky, you probably should be.

Norm has been a contributor for Inc. magazine for years. A serial entrepreneur who has started and grown six different companies. Lately, Norm has been writing a column that details the incredibly complex and drawn-out process of selling CitiStorage, one of his six endeavors.

Each column details a new phase or challenge he's encountered during the process and I must say, his musings have been simultaneously intriguing and frustrating to follow. It seems the process of either buying a business or selling one (depending on which side you are on) is fraught with unseen obstacles whether those be morale of current employees, environmental regulations (one of Norm's problems) or adequate financing for the sale.

Even if you aren't currently in a position to either sell or acquire, reading through Norm's experience will open your eyes to the all the potential complexities involved in the process.

At Milestone Advisors, not only are we familiar with these complexities, we've helped many an entrepreneur sell their operations as well as buy other business that will enhance their products or brand.

We believe it an essential part of the process to contact a firm like ours who can objectively analyze the situation pre-sale and anticipate obstacles, thus building a strategic plan to ensure a smooth process. Such plans include organization assessment before a purchase or sale is made, market analysis (how will the sale or acquisition affect your remaining operations in the current economic client?) and much more.

Check out Norm's trials and tribulations throughout his process and if selling or buying is in your future, contact someone who can help you navigate through it.

As I type the above title the image of Scar perched on a cliff preaching to his heard of loyal hyenas about his extensive planning and maligning to steal the throne away from Simba in the Disney classic, The Lion King instantly pops into mind.

The kind of preparation I'm talking about is slightly different. Over the course of the past two years, we have seen CEOs of private companies manage conservatively, holding back plans for expanded operations, product lines or service offerings.

Add to that how difficult it's been to secure bank financing in days of late, with lenders cautiously screening loan applicants and reluctant to doll out any amount, regardless of how small.

Scar isn't that far off, if you have grand plans for your venture as he did for his 'regime', it's going to take extensive preparation. When you want to make a move forward with plans, you'll want it to happen swiftly and effectively. The key to achieving that: be prepared.

Here are some things to do in said preparation:

1. Invest in technology
Small and inexpensive improvements (particularly with all the free technology available today) may help your company run more efficiently, equipping you to handle increased business when you roll out new offerings.

2. Snap up talent on the cheap
We're all aware that with the economy in its current state there is a surplus of great talent in the job market who need jobs, turn the positive into a negative and hire these individuals at a discount.

3.Ramp up training
Take some time to evaluate current staff, give them both positive and constructive feedback and see what ways everyone can improve in anticipation of coming change.

4. From strategic partnerships
It doesn't cost much to meet other professionals for coffee once or twice a week. Dedicate some time to forging bonds with people who may be referral sources down the road.

5. Get to know prospective customers
Once again, efforts in this area shouldn't cost you much while spending time with them and getting to know their needs may allow you to tailor offerings to deliver more efficient services.

(The above points are taken from an Inc. Magazine article)

While these all sound like simple steps to take, combined, they can become an overwhelming to-do list. It's important to organize these initiatives into a strategic business plan. This preparation can also be a part of a marketing plan or product launch plan.

Scar isn't that far off. He has some big things he wants to achieve and he's cautioning others involved in his operations that they all have to have the mindset of preparation, meaning, there is a lot that needs to be done to position his plan for success just as there is a lot a company must do beforehand to prepare for good things down the road.

Who said Disney couldn't teach us lessons in good business practice?

When looking to start your own business, it's a good idea to check out some of those who have come before both in the industry you're seeking to break into as well as some that are completely unrelated. You want to get a feel for what has worked and what hasn't in an effort to put together a strategic plan to be used as a roadmap for the first few years of operation.

Here are some insights I found interesting from Fortune's interview with the founder of True Religion jeans, Jeff Lubell.

1. Don't be afraid of powerful people
Lubell shares that when launching his brand, he approached some higher-ups at Gap to obtain private funding without a real introduction. While I completely agree with the sentiment, in all aspects of life actually, I think introductions to potential investors are important, whether you're tapping private investors or securing bank financing. Yes, don't be afraid to go after the big fish but do some research regarding the proper avenues to approach them. Private funding and investors can be the key to successfully launching and sustaining your business. From the very beginning interaction with these individuals should be one of mutual respect to foster a lasting, positive relationship.

2. Skip the prototype
Instead of designing a sample line and shopping it around to various retailers, Lubell had 14,000 pairs of jeans manufactured before he had met with one potential customer. While it's clear this worked for his endeavor, I don't think it's sound advice for everyone. If you're going to be selling a product, you have to make sure you have buyers before sinking capital into production.

3. Comp the sales staff
Now here's a great business strategy. Lubell gave free pairs of jeans away to sales representatives in stores that agreed to carry True Religion on a trial basis. After they started wearing them around their respective stores, stock sold out. It's one thing to get your product into a store, it's a completely different factor to get it endorsed. And could there be a better endorsement than people actually wearing or using your product? Are you going to believe a salesman trying to sell you on the new Ford Taurus if he chooses to drive a Nissan? Of course not. But if he drives one himself, you're far more likely to listen.

Lubell has many more secrets of success that are worth taking a look at, particularly if you sell or manufacture a product. However, the main point is importance of research. Both of what other entrepreneurs are doing well and what decisions have caused them to fail. By conducting this kind of business analysis you can identify strategies you might never have thought of otherwise as potential plans that can positively affect your operations and bottom line.

If you don't have the time do this kind of industry research and analysis, I suggest hiring someone who can. The beauty of a company like Milestone Advisors is that we have been out in the field for years, observing what the Jeff Lubells of the business world have done to catapult a brand or decisions that have tanked their sales. It's this broad experience that allows us to provide clients with business planning and analysis that can position entrepreneurial operations to succeed.

Here at Milestone Advisors, we recently announced the expansion of our suite of services to encompass business consulting in the additional areas of marketing and technology.

The decision to do so has been made possible by several industry experts joining the Milestone team, one of whom is Doug Allgood.

The addition of Doug to the company will equip Milestone Advisors to provide strategic planning and execution as they relate to technology initiatives. Doug brings with him extensive experience in technology architecture and design, product and portfolio management, acquisition and integration of companies as well as business plan development and implementation.

Doug has held leadership positions at various corporations leaving substantial footprints in terms of positive change. At Ontario Systems LLC, Doug restructured their professional services division, brought 5 new products to market in less than 2 years, improved profit margins by 40 percent and left the organization with a new technology architecture in place to sustain future product development.

While Doug's past achievements are incredibly impressive, we are excited to witness the positive impact and results he will no doubt produce for our clients.

Milestone Client Feature
In January 2008, Bright Automotive launched from Colorado-based Rocky Mountain Institute, building on the work of a consortium of organizations, including Alcoa, Google.org, Johnson Controls and the Turner Foundation. In short order, the company has assembled some of the most experienced hybrid-electric vehicle engineers in the industry to help tackle the challenges of our economy, air pollution and diminishing oil supply. With its aggressive development plan, Bright Automotive has created, in less than 12 months, an all-new, plug-in hybrid electric concept vehicle call the IDEA, which operates on efficiencies of 100 miles per gallon. This two-seat delivery vehicle saves fleet customers an average of $3000 per year (per vehicle) to own and operate (based on $2/gallon of gasoline). The IDEA also produces one-third the emissions of a conventional van and is being promoted as a purpose-built solution for commercial and government fleets.

Previewed by fleet leaders and industry experts on April 8th, 2009, the IDEA was then taken to Washington, D.C. on April 21st for a special briefing with lawmakers, corporate leaders, energy industry experts, and Bright Automotive executives. The company and its CEO, John Waters, have made a media splash in 2009 with appearances on CNBC and Fox News, in addition to being featured in the Wall Street Journal, New York Times, Detroit Free Press, Fast Company Magazine, and recently in Forbes. The Anderson, Indiana start-up company has come a very long way in a short amount of time, accomplishing in a year what most companies in its industry can only achieve over several years.

Milestone Advisors’ has been privileged to work with Bright Automotive from the beginning.  As John Waters was forming the company, securing his operating facilities and hiring the first members of his executive team, Milestone managing partner Jeff Good was there to help set up the infrastructure necessary to handle rapid growth. Jeff was able to get things set up for the company very quickly. He made sure the company was ready to process payroll and provide health coverage to new employees, and also helped ensure the banking side was working properly. “The deep experience that Milestone possesses allowed the learning curve to be minimized. Jeff was able to step in as an executive of the company and fill the gap as a part-time CFO with a working model.”

With the company’s phenomenal growth and growing complexity, the company soon hired Jerry Bernier as its full-time CFO, and Milestone continued to supplement Bright’s accounting needs through a part-time controller arrangement with Ann Federwisch, who continues to play a role in the company’s accounting function.  As Jerry puts it, “we really didn’t have a need for a full-time controller, so Milestone was a logical solution.  It’s worked very well for us.”

Last month President Obama announced his goal to have 1 million plug-in hybrid vehicles on the road by 2015. Today, Bright Automotive is on track to begin mass production in 2012 with a goal to produce 50,000 IDEA vehicles annually and employ 5,000 people in the process. John Waters is a former General Motors engineer who believes his company is in an excellent position to succeed because Bright Automotive. He states the company has a “clean sheet approach to business and platform solutions”, giving the company a great advantage without the “bureaucracy associated with the fundamentals of a large corporation”.

Milestone Advisors helps start-up companies with their management accounting needs so entrepreneurs like John Waters can spend their time doing what they do best, growing their businesses.

Although growth in a business is usually considered a good thing, too much unmanaged growth can often have a negative impact on your business. Continuously reacting to growth, as opposed to anticipating and planning for growth, can cause problems, either because you’re growing without the proper resources and infrastructure or because you’re unable to capitalize on the right opportunities as they arise. In order to avoid these two circumstances, you need to continuously monitor the internal and external environments in which you operate. The following "To Do" list will provide you with a good starting point for things to consider each year.

First, you should regularly revisit your business plan. If it was a good business plan, it helped get you to this point, and it can therefore help take you forward. You’ll want to begin by compiling a list of things that have changed (both within the company as well as externally) since the business plan was written. Then you’ll want to compare this list with the assumptions used in creating the business plan. From this information, you can begin to develop new plans and points of action that are more closely aligned with the current and expected situation.

Second, review your numbers. Your financial statements can help you quickly determine the status of your business. Start by looking at the company’s performance over the last year (or two) – sales, profits, cash flows, etc. Then look at your balance sheet – e.g., available cash, working capital, outstanding debt. Once you understand where you’ve been (and hopefully how you got there), the next step is to prepare financial projections. Start by laying out reasonable estimates of your projected sales, expenses and cash flows over the next twelve to twenty-four months. As you develop your estimates, compare them with your historical numbers. Differences should be the result of expected changes in company actions (e.g., introducing a new product, reducing specific costs) or external factors (e.g., a new competitor) versus simply concluding that "sales will go up". By identifying opportunities and anticipating changes in growth early, you will be in a better position to have resources (cash, labor, etc.) available when you need them.

Cash management is ultimately about cash flow, and very few small businesses are blessed with a “flowing” supply.  In fact, very few businesses in general are immune to cash flow problems as they continually make strategic decisions that impact their cash position.  Some of these decisions, such as whether to add staff, increase inventory or purchase capital equipment are vital to the continued success of the business, but must be carefully analyzed in order to ensure enough cash remains available to continue to operate the company.

Fortunately, cash flow is something that can be managed and somewhat controlled.  However, it takes a dedicated business owner or part-time CFO to monitor the business’s activities and anticipate changes in cash flows.  The following are some tips and suggestions for improving your company’s cash flow:

Manage Your Cash
Like any resource, a business’s cash flow must be managed, and a big part of managing that cash flow is taking the time to carefully forecast both cash outflows (expenses) and anticipated inflows (revenues).  This will help you anticipate when you’ll have cash on hand, when you’ll need additional cash, and how the timing of expense payments will impact the company’s cash balance. 

Another part of managing your cash flow and building financial projections is evaluating and implementing various performance scenarios.  When developing your financial model, be sure to consider the impact both increased and decreased sales levels (and collection of receivables) will have on your business and anticipate both events.  Most businesspeople are acutely aware of the problems decreased sales levels will have on cash, but few are able to grasp the problem of too many sales - a business can get itself into plenty of trouble if it’s forced to grow too quickly!

Monitor Your Spending
One of the most common problems with new businesses is the owner’s tendency to spend freely, especially in the beginning when cash is ample and optimism is at an all-time high.  This is when cash management can have a profound impact on the longevity of the business.  Your objective during the startup phase (and in the future, for that matter) is to focus on each expenditure’s return on investment.  Lavish furnishings and catchy marketing prints are nice, but are they worth jeopardizing keeping the business’s doors open?

Lease Equipment and Property
Acquiring equipment or property can be an expensive endeavor, but leasing (as opposed to an outright purchase) can help preserve cash flow.  When evaluating acquisitions of items such as equipment, automobiles and property, it’s important to analyze the short-term and long-term financial impact of both buying and leasing.

Monitor Inventory
While it’s important to have ample inventory on hand to continue to attract customers and facilitate transactions, having too much inventory on hand can create problems (think of it as cash sitting on your shelves that you can’t use).  Therefore, be careful to only purchase inventory that you can turn quickly.  The other side of the inventory strategy is having dependable vendors that can fill orders quickly – the less time it takes between ordering and receiving inventory, the less inventory you’ll need to have on hand.

Accounts Receivable Collections
While it would be ideal to get your customers to pay on time (or early), most small businesses are required to sell on credit and, therefore, need to focus attention on cash collections.  Unlike their larger brethren that have strict credit policies and personnel devoted to collections, small businesses often have few resources to allocate to accounts receivable, while having a greater need to collect payment in a prompt fashion.  Therefore, be creative and vigilant in collecting from your customers, and even consider outsourcing significant past due accounts to a collection agency or other accounting services.  In many cases, the best source of capital for a small business can be found by collecting from your current customers.

Employees
Employees are both valuable and expensive for a small business.  In addition to an employee’s direct costs, which include salary, payroll taxes, and fringe benefits, additional costs are often incurred for office furniture, computers and other incidentals, as well as the time and effort required for training and management. To minimize costs and financial exposure, employers should focus on improving the productivity of their current employees through training, process improvement and other measures, as well as utilizing independent contractors and outsourcing certain activities that don’t require a full-time staff.

When was the last time you updated your strategic plan? Chances are, if you are like most CEO's of small, entrepreneurial companies, it's been too long. And given the roller coaster-like conditions in the market, you need to be proactive with your actions to keep your company on the coarse that you wish to maintain. 
When planning your business strategy, you'll consider issues such as:

• How will our customers be impacted by the economy? Will they be delaying purchasing decisions or opting to do without our product?
• Will we have access to the capital to support our business? You'll need to consider this issue based on the health of your company as well as the position of your lenders and investors.
• Are there opportunities in this economy to buy a weakened competitor or advance into new territories? Down economic times can represent opportunities to those who are in stronger positions. 

While the roller coaster ride can be nauseating, be prepared to strap in and hold on. This likely means shorter term plans, constant reviews of your performance and market indicators, and coarse corrections as needed.