 |
 |
The NASE posed Member Deb Nile’s dilemma of growth strategy to NASE Shop Talk consultant Gene Fairbrother for guidance. Read his response, and then submit your own question to Gene through the Women’s Resource Center interactive “Voice of Experience.” If you would like to be featured in “Real Life Self-Employed,” email WomensResourceCenter@NASE.org. |
While growing a business can mean reevaluating the methods used to distribute your product, reinventing the wheel always means taking a risk. Deb has obviously built a successful business model and I would be hesitant to suggest she make any drastic changes without first testing the waters. Most of us can remember the near disaster for Coca Cola when they tried to change the formula on original Coke and introduce New Coke. While some might argue as to whether Coca Cola was listening to some marketing person from another planet or built a brilliant PR campaign ... the results could have been the beginning of the end for Coke.
This is particularly important in looking at the aspects of moving into a distributorship or franchise business. While this type of business can be very lucrative, it is a very different animal with a whole new organization and style of business. Deb has to decide “does she like running the type of business she has now or would she like to change the way she does business and the actual product she sells ... from ValueCard to Franchises or distributorships?”
This isn’t to say that Niles & Associates should not investigate changing the way they do business. Change is a necessity of success and not looking for new ways to do business can stunt growth. Going in a different direction also doesn’t mean the company has to choose between one or the other ways of doing business. Nor does the decision have to be made immediately. To start, Deb and her management team should develop a business model that would allow for alliancing with others who could take the ValueCard to a broader market through either licensing the rights in a specific area of the country or by creating a joint venture. This would allow Niles & Associates to maintain a level of control over the product but still establish a track for other people or entities to expand beyond the existing 21 state market.
Allowing for a gradual implementation of the new program would allow Deb to look for potential problems along the way and modify the new business model before she did a more aggressive national launch. It would also allow Deb to get a good feel for the “franchise type” organization and she could find out if being a franchiser was the type of business organization she would enjoy. If the program worked Deb could expand it into a national franchise or distributorship program. If the program wasn’t working, she could take back control without putting her entire product and company reputation on the line.
In looking at the franchise direction, Deb should contact the International Franchise Association, which is the primary national association for franchise companies. By explaining her situation she should be able to get the contact information for others who have started in business like her and made the jump into franchising. Most of these people are very willing to share their experience with others taking a serious look at franchising and I am confident that a few hours on the phone talking with other people who have already been where Deb is thinking of going could offer a great deal of insight.
Another consideration for Deb to look at is her own desire for the company and her talents to grow the business in the specific direction she wants to lead it. Every entrepreneur needs to evaluate their real capabilities and make sure they have put together the right team to take a business into a major market expansion. While Deb has obvious talents to identify a market and build a fast growing business, she now has to evaluate whether she has the talent ... and the desire ... to take Niles & Associates to the next level.
A good case-in-point to demonstrate this is Apple computer and Steve Jobs. While Mr. Jobs is now back at the reins of Apple, and doing very well, it was not always that way. At one time Apple fell on some very hard times in a diminishing market and Mr. Jobs was fired from the company he started in his garage. Quite simply, his talents were in new concepts and product development ... not in competing head-to-head with the likes of Dell and Gateway in an exploding world of computer mania. Now, the cycle has come full circle and Mr. Jobs is back leading Apple with new developments ... such as the highly successful iPod.
One of the talents every entrepreneur needs to have is the ability to evaluate where their personal strengths and weaknesses are. They need to be able to capitalize on their strengths and hire other people to control those areas where they are weak.
Not personally knowing Deb, I certainly can’t suggest that she doesn’t have the ability to take Niles & Associates to the next level. What I am suggesting is that Deb admits she is at a crossroads and questions how to best take the next expansion step. This means that she needs some eyes from the outside that can take a fresh look at the company direction and maybe someone who has some expertise in national product launches or franchising.
This person could be an outside consultant coming in to do a business evaluation and help Deb develop a business plan that she implements or it could mean bringing someone onboard as an executive level employee to lead a new division of the business.
What it all comes down to are two key factors in making a decision. The first is for Deb to make sure she uses all the talent at hand (both inside Niles & Associates as well as outside advisors) to evaluate the existing business structure, the potential market, competitive factors and what type of demands would be placed on the existing company infrastructure to move into a national program. The second ... and most important factor ... is to grow slow and spend the necessary time to pilot the launch and continually test the market and redesign the business model as it evolves.
|
|
| |
| |
|
| |
Have you had an experience that others can benefit from? Are you still going through a challenge or growth opportunity, and want the advice of an NASE consultant? Email WomensResourceCenter@NASE.org with a brief description of your business challenge, and you could be featured in “Real Life Self-Employed.” |
|
|
|
|
