By Stefania Aulicino
Why not begin this year with a New Year’s Resolution for your company?
Many of us declare resolutions for ourselves; why not declare a resolution for your company?
The New Year seems to be a natural time when many people think HONESTLY about what could improve their life. Better health, lose weight, less debt.
What is a declaration worthy of your company’s New Year?
Richard’s company was built on his own excitement as a high school student, spending a week in the nation’s capital at the invitation of his US Senator, to learn the business of civic leadership in real time.
This experiential learning accelerated his career as a Senate staffer while paying his way at a prestigious University as a government major, out to change the world.
Midstream, Richard chose entrepreneurship to change the world. He co-created a company to give high school students leadership experience in a real-world learning environment thereby providing them with a life-time competitive edge. He organized events with political leaders of the day to empower young leaders of tomorrow.
Parents felt this exposure was instrumental in getting their children into prestigious world class universities and on a committed tracked for careers they loved.
With this success, revenue escalated… but profit margins declined.
What Richard did very profitably as a $5 million business took a lot more logistics to do as a $100 million business and his profit margins eroded badly.
Using a business model that worked yesterday, he generated 20% on $5million in revenue, but only generated 5% on $100 million of revenue.
Richard was coping with a problem which confronts many fast growing companies:
What worked on a small scale did not transfer directly to profits on a large scale.
While his company was delivering client satisfaction, it was NOT delivering shareholder satisfaction for RICHARD. Most importantly, the company was building on a NON-sustainable business model for the future.
But it can be hard to image how else to do things which built your original success.
Richard needed an out of the box solution.
Richard declared a bold New Year’s Resolution for his company: shareholder satisfaction!
After years of simply tweaking the same business model, Richard decided this year to challenge his own thinking with these 3 questions:
1. What do our satisfied clients expect?
2. What is the biggest bottleneck to growth?
3. What is biggest negative impact on our profits?
What do satisfied clients expect?
Richard concluded that kids want energy and excitement and partners want credentials for kids to get into good schools and experiences that helped them form their career ambitions with confidence.
What was the biggest bottleneck to growth?
Richard determined that changing times make it difficult to get access to current political personalities.
Originally senators and others gave freely of their time, but increasingly it was hard to predictably get busy politicians, worried about reelection and pending legislation, to commit to schedules to meet with kids.
What was the most significant constraint on profits?
This was easy: Logistics of many events all around the world, each one-off.
Initially Richard personally handled all the scheduling and logistics.
As the number of kids grew, it took an army of 1000 temporary staffer to manage the buses, hotel arrangements, and ensure the safety of so many children.
These questions led to answers which put Richard on a path to new solution—an updated business model after 2 decades – to achieve his New years resolution of shareholder satisfaction.
What did satisfied clients expect?
The gold standard must be preserved: energy and excitement of real-world experiences for motivated high school students that parents viewed as valuable credentials for their child’s life-time competitive advantage.
What was a bottleneck to growth?
To enhance scheduling predictability, Richard came up with the idea of providing experimental learning with leaders he could pay to arrange their schedule: Nobel laureates, celebrities in business, science, medicine and humanitarianism.
What was negative impact on profit?
To address the logistics juggernaut, Richard’s brilliant insight was to create a single venue and bring all the kids to a single location. He reasoned kids were going to rock star concerts by themselves. He would deliver his leaders and experiential learning in a rock star venue – as a live extravaganza. Capitalizing on this rock star concert idea, he could shift to a build-once, sell-many model
Richard’s New Year’s Resolution for his company of shareholder satisfaction re-positioned his company to benefit from economies of scale. Instead of another decade of revenue growth with depressed profits, the company’s profit margins are on track to exceed its historic 20% peak of yesterday’s little company even as Richard aims for market leadership, globally.
With a projection of $200 million, that’s a lot of shareholder satisfaction on top of client satisfaction—just the way it really should be.
How much is your company’s New Year’s Resolution worth?
Happy New Year to you and your company!
Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Become a magnet for non equity and equity sources to fuel your growth. Explore our tools, solutions and consulting options tailored for different growth stages and different budgets: www.CashAndControl.com
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