Why most companies hire a Chief Operating Officer to fail?

Posted December 4, 2015 by Michael Fanghella
Categories: CEO Recruiting, COO recruiting, Uncategorized

Tags: , , ,

By

Michael Fanghella

Managing Director

Santa Fe Advisory Services/IMS

A while back I put this summary together of how to interview and determine if you are going to select a Chief Operating Officer from a seminar I had put on for mid range business, all looking to make the next step. Its point and purpose was to show owners what the person you are looking to bring in believes and sees as their job going forward and what they as owners/visionaries should be thinking to ask or prepare.  For their (the Potential COO candidates) purposes note their typical skill sets and how they think is shown below by how they rank them and see as their purpose is when coming into a firm:

  •  Change management ranks highest; and
  • Setting and enforcing robust operational controls; and
  • Engaging in strategic board level discussions
  • Implementing the organizational and operational model ;and
  • Extracting operational efficiencies; and
  • Industry & Market knowledge and bringing a multicultural management approach ring last on the criteria  that you should expect this person to have.

Nearly all Chief Operating Officers will, at some point, have to take the lead on these issues: from the basics of ensuring vigorous operations, to creating a new operational structure, through to the change management aspects of execution. Beyond this list are the things you should know when looking for such a person and is why I address getting the organization in place with defined operational procedures and systems prior to hiring a person to fill this role assuming you have truly articulated what that role means in your search. Oft times we are over impressed with the CV of the person in front or us and what they did at a company most likely with systems and processes in place”.  If you don’t have those, then you are hiring someone to mix up the batter with a finger, when they are used to having a high powered blender.  I trust you see what I am addressing here as an important component to addressing your strategic vision of growth.

Key questions for you to present to them:

  • What kind of post-induction/acquisition/growth integration strategies does he know, and which will be most effective?
  • How adept is he at reassuring in-house stakeholders about the change, while still transforming the company’s approach to innovation?
  • How will he balance the conflicting views that will emerge on the best approach to innovation?
  • What is their approach to maintaining morale and retaining key talent?

Rethinking Strategy

  • What other tactical risks and opportunities could emerge from the changeover?
  • How would the new approach fit with the company’s existing resources and capabilities, and where would the gaps lie?
  • What would a roadmap for transforming the business look like?
  • What level of investment would be required to support it?

 Compliance: setting and enforcing vigorous operational controls

Questions the Owner/CEO should be prepared to answer:

  •  How well do you know the area of the business that has been exposed in articulating your searches needs, and what systems and processes do you have in place?
  • To what degree do you think we need to comply with current regulatory guidelines?
  • What are the alternative oversight frameworks that could be more effective for your sector?
  • What are your thoughts as applying good practice and corporate governance in our industry?

Designing and implementing the organization’s operational model

  •  What is their method for handling this?
  • What kind of modeling methods will they rely on?

They should ask

  • How are your competitors dealing with the issue?
  • How can you best determine a most advantageous operational model?

(The issue is do you know why you are hiring someone to solve your everyday problems.)

Performance: proficiency in identifying and extracting efficiencies.

 What is their structured approach for finding new efficiencies within the business?

  • What are the factors that most affect overall costs?
  • Which big data-related tools they intend to use that can help pinpoint the efficiencies in your company’s network that will ensure smoother operations?

Insight: deep industry and market knowledge

  •  How well can this person translate the industry’s dynamics into a strong proposition for how overall industry trends are changing and how he will take advantage of them?
  • What are his/her clear facts to back this up?
  • What is his/her stratagem for broaching sensitive issues in high level meetings, while demonstrating interest for this new strategy?
  • Which approach do they follow for determining who supports your views behind the scenes?

Finding a multicultural management approach

  •  What techniques do they know that can help bridge cultural differences during this process?
  • How can they ensure positive knowledge sharing across cultures and time zones?
  • How attuned is their appreciation of when “yes” might actually mean “no”?

A cross-functional background is a common feature of the career paths followed by today’s leading COOs so to not address this internally is like judging the book solely by its cover.

The corporate assessment for a new COO appointment

  1. Do you have a process in place for reviewing and defining the links between the corporate strategy and the competencies required of the future COO?
  2. Is your board involved in this process?
  3. Is there an appropriate job description that gives a complete picture of the role?
  4. What profile does the individual need to possess, including the academic background, experiences and competencies (KSA)?
  1. Have the relevant key performance indicators been defined?
  2. Have you decided whether you want to hire internally or externally?
  3. Is a competency-based selection process in place?
  4. Is there an overall development framework for the role, including coaching, action learning and mentoring?
  5. Have you created an induction and compensation plan in advance of this process?
  6. Are you prepared for the need to communicate extensively across the business to ensure that key stakeholders are prepared and available to support the new COO?

The one thing I have observed is that people tend to either prejudge candidates from being too impressed by their current status, and or their resume or they don’t really understand what their true needs are.  They will over look someone of age, but who is capable and in place to handle your real needs and hire someone who has neither the experience and or the patience to mentor those around them. As I mention above, owners don’t clearly look at their operations and analyze whether they would be  bringing in a personality that hasn’t gone through that transition in a long time and will adjust purely by change management so it fits his/her comfort zone.  One thing is for sure, unless you spend the time prior to even running a search, you are not prepared to hire anyone.  I handle executive searches, but only if the company hires me to come in and analyze their business, its operational strengths and weaknesses, seeing the functional status of its existing employees.  Only then can I address the potential candidates, which are now sought out in relationship to their KSA’s (Knowledge, Skills and Abilities) and how they would meld into a scenario that to date has been unmanaged by such a personality. Most medium sized companies don’t really need a COO, but they most probably need a Chief Growth Officer, they equate their need to grow with a parallel need to have experienced managers of that growth.  When often as the saying goes, “if you build it they will come” .  To me that means you can attract a better person when you are a successful growth entity rather than when you are a need entity.

To find out more about how to really have a successful executive search experience you can reach us at 858 432 6066 or michael@santafeadvisoryservices.com

Focus and Energy ©® “Either you know what you need to do or you are wasting resources”

Posted January 4, 2014 by Michael Fanghella
Categories: Leadership, Management, sales development planning, Strategic Planning

Tags:

MJF1

Michael Fanghella

Intergrated Management Services, LLC

 

            The reality is that many organizations have elongated job descriptions that go into great detail as to what is needed from a particular position.  The reality is that life as with many things that surround it are just not that complicated.  Take for example and many of you may feel I am simplifying things here. But take the Mortgage / Real Estate meltdown of 2008.  Did you really feel it was that complicated?  Two (2) year rates were 200 basis point higher in 2006-7 and person income had not grown, in fact rather it had shrunk and 1% of the consumer index that was fueling our economy was based upon refinancing an asset that was based on factors negative to this use of funds.  Add to that unemployment had grown and you had a clear recipe for disaster.  It is that simple yet we allowed the banks and the government to explain away all their bad decisions as being over our head. Not.

You job, your company’s future depends, especially in this marketplace, on you actually knowing what is “your” job and executing on that platform such that it positively affects the revenue and good fortunes of the company or self employ you serve. The reality is we accept this when we hear it from a football genius the likes of Bill Belichick Head football coach of the New England Patriots when he in on the sideline sounding the same refrain of “Just Do Your Job”. It makes sense if everyone just does their job, then we as a team will have backed each other up and will execute the vision and planning of management. Agree, disagree but you cannot argue with his success.

Let’s translate that into today’s business environment.  I will hearken back to a time when running a large mortgage bank we had a very focused environment.  We targeted the credit grade, loan to value grade and over collateralization of the interest rate to choose who our optimum client was.  In our case a client who may have had credit problems but was not over the edge. B+ credit, Average LTV 73% and Interest Rate Yield of 11.2%.  That person had the lowest default and the most likely opportunity to use the loan to right a wronged financial ship. So know your customer.

To our employees who covered Sales, Underwriting and Secondary Markets where we would sell our collateral to the highest bidder this meant knowing what their job was. By example we had a College where by we invited our sales personnel and others who interfaced with them and would have a lengthy weekend of training.  But the simple fact that dictated how we saw their job was the words we had at the front of the room.

Either you are working on originating a loan or closing a loan. If not, stop what you are doing, because you don’t work here.”

That simple really because that’s where they made their money and why we employed them, not all the nonsense that had little to with the simple refrain above.  Put their energy to work with a proper directive.

When trying to get these same tremendous high performing personalities who are in it to win it focus even more we initiated another simple platform. I bought a number of 30 second hour glasses with our company’s unofficial motto “Fund or die” on it.  Our purpose was to simplify the process of knowing what you do. It demanded that if in 30 seconds you could not elaborate on why a particular loan file should fund, how can you expect the underwriter to see it your way when they underwrite the loan application. 30 seconds is a long time and again loans fund for specific reasons such that if the necessary elements are not in place you are originating business that will not fund.  Or you are effectively planning to fail. Put their focus in a proper manner and you will have people accomplishing what you wanted to hire them for.

We actually rewarded not the just the highest volume producers but also those who had the highest funding to application ratios.  Product knowledge, salesmanship and work ethic were the mainstays of our operation. The result is that we originated good loans, did it with fewer personnel and were able to sell into the secondary markets at viable prices. Also everyone was happy because they knew what their job really was.

My challenge is to help companies, organizations or the great masses of self employed to see that the way to their success lays in understanding what is their job and realizing it is not a 3 paragraph description but rather the elements that drive it success.  Good fortune to you all the path lay in simplicity.

Disintermediation, The Sales Cycle, Relationship Prospecting & YOU

Posted August 16, 2013 by Michael Fanghella
Categories: sales development planning

Tags: , ,

By

Michael Fanghella

Managing Director

Integrated Management Services, llc

San Diego, CA

 Developing a sales pipeline is often judged on its size and based upon the qualities’ portrayed of incoming business over a 9-18 month period. The realities of business to expect it quicker using a traditional pipeline development strategy would not bare support although owners often want it so.  Therefore either you change your strategy or sit and wait.  The quality of what you are working on in your pipeline has the greatest long-term impact on your business and controlling what goes into your pipeline is essential. Maintaining quality and understanding its timing includes:

  • focusing on and defining your niche targets and working solely within that niche;
  • focusing on “non customer prospects” that have good business practices and are industry leaders who work in a parallel industry to team up with; and,
  • then prioritizing opportunities based on the quality of the existing relationships you derive from these non customer prospects and the relationship they have with your ultimate end users.

Consider these figures: fewer than 10% of sales meetings end in a sale, 81% of all business is brought to a successful close in the sales process after the 5th interaction, and 75% of sales pipelines are unhealthy. These figures are indicators of the flaws in our expectations of our sales and business development activities. These numbers hold true for businesses both large and small.(1)  Quantity, quality, timing, knowing who to prospect to reach your ultimate client and persistence are 4 critical factors in developing a sales pipeline that is directed to your current sales cycle. Understanding what has changed in today’s business environment as to how customers/clients (“end users”) approach their purchasing decisions will help you get your business where you want it to go, when you want to get there is your next step in your strategic plan. Like most good things it takes a commitment to this new environment.

Four key components that compose a sales pipeline have traditionally been:

  • Qualifiers
  • Timing
  • Interest level
  • Sales stage

To learn more click to read entire go to http://sfsasd.wix.com/santafeadvisoryserv#!experience/galleryPage see all Michael Article ready for download.

Disintermediation – Friend or Foe of Today’s Businesses

Posted November 7, 2012 by Michael Fanghella
Categories: Uncategorized

Tags: , , ,

Disintermediation – Friend or Foe of Today’s Businesses

BY

Michael Fanghella

Managing Director

 For the past 100 of 110 years, business has been extraordinarily focused on the supply chain: building it, perfecting it, defending it. And the modern corporation depends on the supply chain to continually generate profits, because systemic growth has been so hard to bottle. The middle man is at risk in today’s environment unless they adapt.

The great companies of the past have always taken an historic innovation— Ford with autos, AT&T with the telephone ,IBM with computers—and then consolidated control of their markets by defending their distribution arm by all means. But today’s fastest growing companies, such as Apple, Amazon, Microsoft, Facebook, Twitter, and Google, don’t focus nearly as much on distribution channels. Instead, their businesses are built around consumption models, and their single minded focus is on building relationships to their family of consumers to earn their trust, to expand their role in their consumers’ lives, and to enlist them in everything from product design to service to delivery.

Today’s enterprising companies are as focused on constantly improving their levels of trust with their clients as they are on the degrees of efficiency of supply.

And that is only half of the story. Even as this cultural shift is taking place, the nature of distribution itself is undergoing a transformation. Today, most manufacturing business models are still built around the traditional notion of a physical community of towns and roads, warehouses and delivery trucks, advertising and point of sale marketing. Not surprisingly then, most supply chains are also built around local physical stores, factories and the ubiquitous dealers that serve them.

But what happens in a world where one’s neighborhood is as much virtual as physical? When your friends and other key influences are scattered around the world? What happens when a single opinion, via a blog or Web posting, can influence a millions of clients on four continents? For these questions, the traditional supply  business model has few answers that fit today’s models.

From the Industrial Revolution to the brand management system to the virtual corporation, has taken place at the system level. That is, how do you coordinate assets, information, and people? Today, the Internet is the ultimate such system, bigger than any that came before. Can we be surprised then that it reverses that most traditional of business relationships, the one between manufacturer and client? Or that the old supply model is now beginning to seek new solutions in a world in which the consumer, for the first time ever, is enthroned in the driver’s seat of the global economy? If you don’t find your path and you are not controlling the supply you better find a way to draw in the demand or be gone.

We were given an advance warning of this trend more than a decade ago, during the mortgage refinance bubble. Unfortunately, we drew all of the wrong conclusions from that period. Even today, that era, with its creation and destruction of hundreds of new companies, is typically seen as an example of wasteful runaway business growth. But to be sure its effect cut margins razor thin and the companies providing products over reacted to the demand by losing control of them and did not scale back their resources in time or manage supply cycle instead they rode the rapids like an exciting trip down the river until they met the “Falls”.

We should look back on that era as being one of extraordinary importance. The “big idea” in the air in the 1990’s was disintermediation: the notion that business systems, empowered by the new information and communications technologies, would strip out the middleman and grow more efficient in the process. That period of time was essentially this idea of disintermediation, propelled by the Internet, reaching the retail world—replacing traditional bricks and mortar businesses with e-commerce companies.

The fact is that almost all of those e-commerce companies were retail driven enterprises, often driven by old line supply companies. And if you had looked at their business plans, you would have noticed that few of them had any idea exactly who would buy these products or services. All they knew is that their clients were taking the shortest and quickest route they could find direct to the supplier.  In fact, very few had any fulfillment capability or competitive advantage to speak of.

By comparison, those companies that did survive the shakeout— Amazon, eBay, Yahoo, Zappos, Google—have proven to be some of the most important and influential companies of recent years. And they in turn set the pattern for the Web 2.0 social media firms such at Twitter, MySpace, Facebook, and YouTube that have redefined modern life. What did those survivors have in common? Their business was based on what clients wanted, rather than what the suppliers already had. They were the harbingers of the demand driven economy.

The lesson for those who act as the current authorized middle man for the manufacturer to be learned is that in this era of oversupply it is now imperative that you construct a framework in your company that encompasses and aligns everyone toward meeting not just the current but the latent and emerging demand of your highest profit clients and consumers. And before you can do that, you need to understand who those clients and consumers are, where they are, and what “need states” they exhibit as they make their purchasing decisions. The concept of need states is important for developing an in-depth understanding of demand. Need states are the circumstances or the occasions that cause someone to want something and to take action in its pursuit.

The transformation you must make in your company and the reversal you must make in your perspective will be easier than you think. This is not re-orienting  this is rethinking. This is not reorganizing, it’s reshaping dealers, manufacturers, retailers, and the media into a collaborative network that will work to the benefit of all who participate. For a long time, this new model of organizing and collaborating has been intuitively felt, and now it’s real. It’s called the feeding the flow by corralling disintermediation to win in the new demand based economy.

The problem is not that the client can and has found their way to their purchase decision vies a vie this process, it is you haven’t identified it and set a strategy to focus it for your business. Gone may be the traditional sales force and the flow personnel you have had for years as the future challenges you to embrace your client, involve them on a current basis in the decision process and let them see it all as through the project management by giving them heretofore unavailable real time access to their decision online thus cementing your relationship with them. Your marketing should parallel this concept by instead of beating the bushes in an “us” versus “them” mentality, by aliening yourself with their needs through crowd sourcing and knowledge based marketing which make your effort in concert with their needs.

For more information of the effects of disintermediation and your business call Michael Fanghella 619.758.4019 or visit us at www.santafeadvisoryservices.com

 

HOW TO MANAGE A SALES DEPARTMENT

Posted October 13, 2012 by Michael Fanghella
Categories: sale personnel recruitment, Uncategorized

Tags: , , , ,

HOW TO MANAGE A SALES DEPARTMENT

By

Michael Fanghella

October 13th 2012

My perspective in managing a sales department is from having from as small a sales cadre of 5 sales personnel to over 150 under my direct report that produced results from $10 million in sales to over $1 billion.  The reality is in today’s multi tasking leveraged world is that sales professionals sell and if they are expected to be handling things other than sales you have diluted their time resource and effectively limit their earnings as well as their attention.  So establishing the Desired Results (Goals) that effectively consider what they will earn a living doing is paramount.

I believe that once the desired results (mutual goals defined), as relayed and defined through senior management and accepted by the sales team jointly and severally, are established the following are the issues under the managing control of its leader. They are as follows:

  •  The Procedural Guidelines established to follow to achieve those desired results for in this way when the results aren’t forthcoming you have a understood methodology to analyze the sales persons effort and either get them back on track; and
  • Resource management in that when prior establishment of the desired results were made along with that a clear path of who they can go to for information, aid in knowledge based sales technique, solution selling issues. This includes training sessions and open discussions as to objections and solutions as facilitated by the manager. This allows the team to see and know that if they choose not to utilize these resources (management, tech support, books, web based information services, etc.) they have effectively limited their opportunity to succeed; and
  • Accountability, which is often misunderstood, is where we as a team or an individual take the time to assess performance against the prior stated desired results.  At this time the measuring sticks are if the personnel are following the procedural guidelines as laid out to succeed and if not make corrections and also for the manger to be assessed by his team if he/she is doing what he laid out where his/her procedural guidelines to be the effective voice and manager they need to perform. These meeting occur throughout the time but can be done both as a team and on an individual basis; and

Ultimately this effort constantly is taking their performance issue to hand and allowing for adjustments and improvement that hold both sides of the team accountable to each other. What you find is that your sales personnel know how they are doing well before anyone else and as a manager you can see if they are putting an effort (procedurally) that accomplishes what they themselves outlined they wanted. The natural consequence of this process is defined by those results made by the individual team members. This reduces complaints, and focuses sale managements’ attention on helping not pointing fingers at personnel which makes all sales personnel in the team nervous. Sales personnel can’t be effective if they are looking over their shoulders. As sales manager if you can’t help (mentor) them you are a non event to their desired results and ultimately your authority is diminished.

o How to effectively turn prospects into clients –

  •  All prospects are somewhere in the sales funnel, the question is where, and once understood aids in defining how you handle them. So I have some basic rules to analyze them (prospects) by they are as follows:
  •  If a warm prospect seek first to understand before asking to be listened to-
  1. Who are they, what do they do, how large are they. Often this can be done rather casually ; then
  2. Establish their needs and how that takes them to what they want, then
  3. Qualify them in terms of their resources and expectations, decision making authority and their financial expectations (authority & financial qualification are the determining factors as to whether you proceed aggressively or not;  then
  4. Either move forward and or invite their superior to the next level of discussion to insure a clear line to closing the effort. or
  5. If they are that person and financial consideration are defined and acceptable; then
  6. Take them to a solution sales consideration that identifies how your product/service meets their needs; then
  7. Demo. track to close
  •  While this is a simplistic format and is always subject to the variables that a good sales person will sense, but it is a format that keeps time and expectation in alliance with the desired results to succeed.
  •  If a cold prospect, establish a listening relationship but get to qualifying them and whether they have the decision making capability or not to ascertain whether they move to the next level with you. If qualified see how quickly they want to move toward the next obviously level of discussion and or get their superior involved in the next discussion or demo.

o How to manage 3 projects at once –

I currently manage over 10 projects and attend to past clients who had projects with us but who have residual issues that need to be attended to.  Priorities are often misunderstood.  They are often misdiagnosed as crisis management, but are not.  They are things you do everyday because to effectively manage projects and the key elements as determined prior that are to be attended to each day by design.  The above referenced crisis management is then handled in the course as an adjustment but not as the day to day management.  This means phone management, time and resource management and trust basis a clear understanding of both the talent pool around you for delegation and what management expects and allows you to resolve without having to go one step up the management ladder are clearly understood.

 o How to motivate and inspire employees-

Understanding who you hire and their skill set is foremost. Imagine putting a 150 batting average person in clean up doesn’t make him a great hitter by design. So go back to how I hire and manage my sales teams in that I have a clear and understandable desired results from people who can clearly articulate them to me. If they can’t do that then they are not connected to the process of selling and haven’t thought about that prior other than wanting a job.  Ultimately this is what will pull the team both they and their supervisor into accountability with each other in terms of what they have to do for this effort to be successful.  This is paramount because if they don’t believe in what we are doing you will lose them as their first failure.

But beyond that motivational goals have to be offered in short terms expectations so that someone achieves those goals quickly and others see it as well as its attainability. Making them such that other voluntary stakeholders in this process (Family and maybe significant others) share in its acknowledgement.  While I don’t ascribe to knowing the families of our sales personnel, I do want them to see this as a positive process and are supportive of what we will ask of our sales personnel.

Having certain motivating factors that allow success to occur at different levels so that newer members of the team can execute and succeed also as they build their aptitude and base of knowledge and sales.

Napoleon stated; that soldiers die for honor (medals) as much as to win the battle”. Sales personnel are not much different so open communication, a developed effort to keep them aligned with what they decided in agreement with management to perform and their acknowledgement in the accountably meeting I stated earlier to, is always aided by that which we promised to them we would in turn provide.

Ergo, management above the sales manager never criticizes the team openly or to their face. That is left to their manager with whom they have a defined solution oriented process. Anyone can identify a problem, but a good manager attends to the problem by bringing forth and mentoring a solution.  Senior management above this level are the good guys.  They should never see your fears or even hear them. They (Sales Personnel) will want to be your friend only because if they don’t have this defined management solution process, they will seek that relationship because they believe it will effect their employment stability.

Consistency in the effort, the product/service surviving whatever due diligence the prospect has with it will give confidence and build momentum better than drinks after work or high fives when a sale gets made. The point is they have high expectations of themselves, so motivating them is an adjustment made often and done for their attitude, not their success.

You can comment or contact me directly if you want additional information on this or other subjects or contact me by clicking www.santafeadvisoryservices.com . 858.880.8650.

The ABC’s of Purchasing a Web Site Design

Posted June 29, 2012 by Michael Fanghella
Categories: Web Design for Small Businesses

Tags: , , , , ,

The ABC’s of Purchasing a Web Site Design

By

Michael Fanghella

 Custom web site design work is expensive.  That is what we have been told.  But it is in a Red Ocean world which makes you the buyer in command.

Website services including web design and web development.  Your developer should have expertise in ecommerce web design, application user experience design and website design can run up quite a fee.  Ecommerce website designers often have special requirements from their web hosting services and their clients and you will pay for it if you want it done correctly. Ecommerce is not the messiah but more and more  businesses are tying their different parts of their supply chain to their website and ecommerce is a bi-product of that.

You will find that Website costs can really vary depending on your particular website needs.  You can find a design agency or a private web designer who freelances as a custom website graphic designer and web developer.  The problem is resources which cost in terms of time and a broad sense of what is going on out there that works.

A business website designer should build a professional website that represents your business in the best possible way. Don’t get caught up in what you see as pretty and realize it is how your site works in the framework of the web that matters. Business website design/development and search engine marketing is an important as hiring a great sales person.  Search engine optimization when matched with a productive web design is the act of making ones website content more search engine friendly to make it rank higher.

A full-service website design, internet marketing and web hosting company will get you there all in one place and piece, but it is not cheap. This can include online marketing and ecommerce website design services.  Their goal should be to provide a driven website design that’s modeled to become an integral part of your organizations marketing strategy.

Take a moment to look around. You’ll see real solutions to real design and marketing problems.  A fully customized solution will help your brand succeed with eye-catching design and online marketing services but is usually not all that cheap.  The issue is not what can you get that meets a small businesses entry needs into the market and that you may grow out of but be dragged down from, rather that what your site does is in alignment with what you expect from your business.

Designing a web site that creates results and becomes the foundation of your successful business is much more challenging.  Your Web site’s appearance and ease of maneuvering represents your business online.  Your small business website designer should build a professional website that represents your business in the best possible way, integrating the social media as an effective tool for building your business.  Everyone is always trying to connect your business world with your web designs and marketing efforts.

A superior website design can benefit and facilitate several functions becoming an effective contribution to your company.  Web designers can change text, swap out images, whatever you need them to do.  If you need to update the text or change an image on your site, they should just allow you to contact them directly.  Once your site is designed you’ll need a place to host it so that is another cost. So negotiate all these issues prior to employing such a designer because there will be revisions and hiccups in the process.

Let them know what you need to make your business grow.  In our case our expert developers have vast experience to customize exist or new project as need of the enterprise.  Their interest in these things is only in the context of the task they need to complete.

So who is best for you?  I believe a small sized agency will get you the most bang for the buck so to speak as they have a need to perform and resources to provide the best possible outcome at a price that allows your company to grow and add on to your business marketing strategy.  Usually you will work with the designer and he/she will get a good feel for what you want which is much more effective than just using a template to solve your design work as your biggest advertising medium. A large agency has a huge overhead to support and you have to ask where your money is going.

Let us help you create an eye-catching, custom web site design specifically for your business that is affordable.  Santa Fe is a web site design and marketing firm, SFAS specializes in small business web development.  Our services range from custom web site design to logo creation and email marketing and we specialize in the Food & Beverage, Hospitality and Wellness Industries where “we build websites like they are on purpose”.  See www.santafeadvisoryservices.com

Starting a New Business Series

Posted June 5, 2012 by Michael Fanghella
Categories: Uncategorized

Tags: , , ,

Starting a New Business Series

By

Michael Fanghella

Managing Director

Step Number 1

If you are starting a new business have a new idea what ever you plan to do next do it like it is “On Purpose” please.

Starting a new business involves many steps.  You may borrow business finance for the purpose of starting a new business or for expending the established one.  Starting a new business is the easy part.  One of the most important things to do when starting a new business is to prepare a written business plan.  Starting a new business can be  exciting and challenging.

That’s what starting a new business is all about.  Quick money is not what lies behind starting a new business overnight.  Starting a new business online is easy and with the right help you will be making money but usually not quickly.

It may be intimidating for some people.  When you are starting a new business be it online or otherwise, you need have a website as it has become the acceptable means of communicating your presence.  When starting a new business there are certain decisions that you need to make.

The reality is that you probably don’t know everything and need the expertise of others.  The fact is you don’t even need a bank to start a business.  If you want to start a business, you need to think it out.  Is it feasible, is it cost efficient and can you reproduce the concept consistently at the profit margins you have projected. Marketing and sales should be a fore thought not an after thought.  Once you have the name  (which I suggest you make a s a working title until sure) which along with other things, you need to really sit down and plan the steps to start the business.  As a rule of thumb, your personal investment will need to approximately 25% to 100%  the total start-up costs of your business.

As a general rule of thumb, you will need $1.50 in quality collateral for every $1 you want to borrow, but that doesn’t mean anyone (bank wise) will lend to you unless you provide significantly more collateral, and experience and personal credit worthiness.

Like I said starting a new business requires   extensive planning and preparation which is quite time consuming.

One of the first steps in starting a new business is adequate research and planning.  Consider starting a new business in the Town you live in first.   IBIS World  recently published a  report  on the top 11 industries for starting a new business in 2012.  www.info.com/IbisworldIndustryReport

Starting a new business can be a little overwhelming in the beginning.  Therefore if you are considering starting a new business at all, then all these things will come up.  But don’t do everything all at once start with the above research on whether the idea will fly and can you produce it profitably.  Too many time fools rush in disguised as entrepreneurs where angles fear to tread and get too far ahead of the curve and crash and burn.  remember at least 50% of a small businesses fail in the first 5 years. Mostly because of either lack of capital resources or lack of business experience.

My next article will be on marketing a new business from a point of view away from the conventional norm.  I can be reached by visiting our website www.santafeadvisoryservices.com or email michael@santafeadvisoryservices.com

When to Hire a Chief Operating Officer and why

Posted May 31, 2012 by Michael Fanghella
Categories: sale personnel recruitment

Tags: , , ,

Company culture starts with a common set of values.  Because the role of a COO can vary from company to company, you’ll want to assess which departments of your organization the COO should oversee – be it all or just a few.  “The company’s core performance is impacted by a number of non-core items,”

Hiring a COO can free up a CEO to focus on major external initiatives and foster new opportunities rather than being occupied with keeping multiple departments productive.  In practice, I’ve found that hiring a COO makes sense for most entrepreneurs.  While I’m sympathetic to the arguments against hiring a COO, I do believe the role can be highly beneficial — and even necessary — in certain situations.

By hiring a COO, the CEO usually the founder in a start up or next wave company can concentrate on the aspects of the position that he/she really excels at and loves the most.  Before hiring a COO, ask yourself if you’ll be able to delegate business operations and put in place a monitoring system to ensure that operational standards meet your expectations.  For example, hiring a COO to handle operational problems, someone who can manage legal, someone who’s great at business development and revenue partnerships and someone who’s a technology leader who can actually scale the technology team or mange an ever growing sales force.

The COO should be an effective personnel hire for your small business.  Typically, these types of leaders are interested in working on operating and growing a sustainable organization while the CEO is more interested in driving innovation.  While innovation is extremely important (i.e. Apple’s ability to grow through innovation alone), Even Steve Jobs needed to have someone who is ensuring all the pieces of the organization are aligned with the company’s vision and priorities.  This is where a COO would be extremely valuable to an innovation focused leader. So Look at the experience of you hire and not at yourself in the mirror.  When you are in the grand forest of the business world you don’t really want the only sound you hear there to be an echo of your own voice.

In a world where good business practices and corporate governance are daily credos find one that has some dirt on his/her shoes because experience is more valuable than a alphabet soup monogram after their name. Check this article out at http://www.entrepreneur.com/article/73392

Funding Your Business in Today’s Ever Changing World

Posted April 11, 2012 by Michael Fanghella
Categories: Funding a Business

Tags: , , , , , , ,

If your business has easy access to business capital then you have a serious advantage over your competitor. The question is how to get it.  It can be from cash flow currently generated, it can be gotten as equity but more often or not it is collateralized and as such is a debt instrument of some sort that may cross over to equity but not just now.  This type of funding is secured to many different things be it a Small Business Loan (SBA), a peer to peer lender, a small business private financier, merchant financier, a leasing company often seen in leasehold financing and finally friends and family.  Why haven’t I mentioned Angels, VC’s etcetera.  Well if this is your first go around there’s a 99% chance they won’t even speak to you.  Your preparation has to be tight and your understanding of your business plan exacting in its current and future paths all shown on highly calculated spreadsheets that show proposed performance basis believable assumptions. First can you explain your business in thirty (30) seconds or less.  If not you are not yet prepared to go in front of a venture capital/Angel investor, small business lender, even your friends and family.  So attend to that immediately.  Think this way no one is going to fund you out of their inherent niceness to their fellow man.

Often your benefactor will want first loss security and this comes in the form of your equity or in business or directly to your product or of that of your personal assets.  You said you are a risk taker now “you” will be risking not your assets because you are the voluntary stakeholder in this event, but the assets of involuntary stakeholders like your family aren’t. So think before you sign or better yet think before you decide to quit your job, invest in an idea or consider a franchise etcetera.  Business especially small businesses have quirky financial needs.  It is not like you just turn on a faucet and business pours out profitably.  There are ramp ups, market share analysis, branding of your idea or company.

In the 70’s and 80’s there was a proliferation of funding by major investment banks of multiple business concepts basis a the available tax benefits they could provide the investor  from tax pass through to their limited partners. That all for the most part ended in 1986 with the Treasury Act.

Today if you are in an Enterprise Zone and they exist in 21 states and by example there are 42 such zones in California alone you can receive major tax credits for a number of things.  Now if you seek investors you may think of forming a sub s corp. for tax purposes in any number of forms such as Limited Liability Company, or a Sub Chapter S Corporation.  These are entities that are limited in the numbers of investors they can have (35) unless they (the investor) are qualified investors (means sophisticated investors and able to bare the loss of any investment made in your entity as provided to you in writing prior to investment) and they don’t get counted into the number of investor (35) as mentioned prior.  But before you run off to do this I highly recommend, no I really highly recommend you seek the advice of a legal counsel as to the particulars in your state and what the rules both intra state and interstate are because once you step outside the state you are operating in to get investors you are now under federal fund raising guidelines. So take the extra moment for precaution. But if you do this correctly and are located in these Enterprise Zones you can pass through many of these benefits such as new hires, equipment, etc. as tax credits to those investors and thus mitigate their financial exposure in you investment.  There may be limitations and that is why I say speak to competent legal counsel before going ahead.  Remember a tax credit is a dollar for dollar reduction of taxes to be paid so it will generate some attention.  Another tactic is if you have a company who will use your product and or service they may wish to invest in your future and take advantage of such benefits because companies are seen as sophisticated investors.  So you can see there are many choices other than the more known such as Angels or VC’s.

Be prepared to explain the amount of funding your business needs and provide supporting financial data on your past (if any and tax returns also) and projected financial activity in the form of income statements, budgets and cash flow statements, among other documents.  Explain how you plan on funding your business venture in the next section, which will cover financial management.  Anytime this can be done by an acceptable third party such as an independent CPA firm that helps build creditably.

Be prepared to deal with the following questions apart from your financials:

1. Target markets –  Who are you aiming for and what needs through either products or services are you trying to satisfy? 2. Drivers of choice – What is the thing that will get these clients/consumers to choose you over the competition? (see my article on Blue Ocean thinking) 3. Core Business – what are the products and services that you must sell (core business) and what should you say about them? 4. Channels – where do you have to be seen and be available so people will know about the brand and be able to buy it when they want it?

In essence you are being asked to know your business inside out. That’s not such a bad idea after all.

Where to go you ask?

There is the U.S. Small Business Administration (SBA) as an invaluable resource for entrepreneurs. It offers several loan programs through participating local banks. For example, the Guarantee Loan Program provides loans to small business owners who cannot secure financing through other sources. While there’s no limit to the amount you may borrow, the SBA can only guarantee up to certain amount. In addition, you must provide collateral, such as your home, to support the loan. Check with your local SBA office for more information about loan programs or visit their web site at www.sba.gov.

SCORE is also a great small business resource you should seek out for advice as to how to reach the many avenues discussed above and can be found in most cities just by looking it up on the internet. But if looking remember the 5 C’s of lending for small business loans are Character, Cash Flow, Collateral, Capitalization and Conditions. The 5 C’s are the underlying principals behind lending and if you are not able to meet them that’s when it gets sticky.  There are bad credit business loans, there are collateral based business loans, there is merchant financing basis your cash receivables, but all these are expensive and quite frankly all place your business in harms way if anything goes wrong.  Because you are a business you are not out in the market as a consumer and as such will be viewed and classified as a commercial entity and not subject to the consumer protections often afforded to those who seek credit personally. So think fast but act slowly when taking this leap and of all things “to thy own self be true” when assessing your chances, your credit and your business plan.

A healthy business credit profile will allow you to keep good open lines of credit with vendors, easily establish new accounts, and obtain more business funding for future expansions and business growth. Investors are more apt to deal with businesses that have a healthy business credit profile as it gives them an extra layer of security knowing that their finances are stable.   Just like with personal credit, your business credit profile will be supported by credit bureaus. Dun & Bradstreet is the main bureau that will be tracking and providing your business credit score. In some cases, your personal credit score can be tied to your business, so it’s important to discuss this matter with your Cash Flow Experts program mentor to determine the benefit or harm this may bring.

Register your company with the business credit bureaus.  These are Dunn and Bradstreet,   Experian Business, Business Credit and Equifax Business.  If you do not have the time to build your business credit score and you need funds right away, there are a few different small business loan programs that you can take advantage of.   These loan programs are going to have higher interest rates but offer cash very quickly into your business. Regardless of the type of financing you obtain for your small business, one constant remains true at all times—there will be interest.   So don’t live beyond your personal means.

For more information contact michael@santafeadvisoryservices.com  or call 619 550 1198 for a free consultation.

Procedural Guidelines in Marketing Business Strategy

Posted April 2, 2012 by Michael Fanghella
Categories: sale personnel recruitment, Uncategorized

Tags: , , , , ,

By Michael Fanghella

This is a topic where we could get lost pretty quickly as the sands shift almost daily and a new idea promotes a new strategy as quickly.  But rather than go there I am going to suggest we look at just taking the issue at hand simply.

You spend lots of money to hire and train if needed sales personnel.  But have you made clear to them what you desire as a result from them and have they done the same with you?  Or has it been a sales effort by you when you were impressed with the candidate in front of you.   Often we get caught up in what we want so much we forget to review what we need.

If you can’t explain to a new hire or a veteran who is anticipating coming on board for employ what your company does in 30 seconds or less, be able in that discussion, explain what the company’s desired results are and allow the candidate to speak freely to see how they can achieve them, how can you expect them to figure it out on their own.  Truly you need to answer the following issues internally before asking your newest employee to charge out there. I find it amazing how many hiring directors hire without making sure of the prospect that everyone is on the same page.  Little things like who does he/she speak to when there are questions, where else in the organization can answers be gotten.  What procedures for pursuing and accomplishing the results so mutually set out are and what means of sitting down to review them by and between both of you to see if results aren’t forth coming have they been followed on both your accounts.  Often I will see the hiring entity explain away the question because honestly they have never thought about it.  They are too worried about “do you have industry contacts or background”.  I have seen more great sales people fail because they went to the next level with a firm that was not connected to the procedure to ensure success concept by having it mapped out.  Without a good process the sales person will in all probability fail.

This may mean that if the employee is off course a few adjustments can have a beneficial effect because when in review either they or you are off the guidelines as to what was originally discussed.  But that those procedures were set out to allow this analysis and correction on a weekly basis.   How often do we hear where a salesperson gets a 30 day probation notice after 60 days being there?  Were any procedures reviewed, did the manager sit down and review as to whether or not he and the company were fulfilling the compact by and between both parties.  You waited 60 days before noticing?  What it really means is that you don’t have a procedural guideline for this sales person to follow.

I have built multiple sales teams successfully because of this basic concept. I have multiple sales efforts fail because of its absence.  Sales people like structure, they want and need feedback, want to understand how they fit in.  Most of the time we hire them and throw them into the that red ocean of competition without a thought or plan as to  how that one person will meet both you and their results by procedure.  It is like golf, you only have to miss the ball by a degree for it to land in the rough.

You see there is this leap of faith that says as an employee, “I will work and give you my best effort on the proposition that you will pay me for that time”.  But it goes much further than that.  It really goes to whether the employer really has their act together, has a strong vision and a result in mind that calls for procedures to be in place so that when hiring someone they can start working immediately on meeting the result driven thought process versus doing what we have all seen in the past spending time building a lead generation system on his/her own, spending as much time branding the company as being able to sell the products or services available and having a mutual respect process that keeps everyone on their game.  As too often the whole result driven paradigm at the moment is on the shoulders of the salesperson to meet expectations that while they may have bought in on they had no say so in the how to get there.

One of the worse things I heard from a marketing person that worked for us was I don’t now what do to make it better, can you tell me.  Well eventually I did it is what spurred my beliefs as you see them today.  I was not going to waste our training expenses just to go out and repeat the mistake.  In doing so this person latterly was transformed over night into being the most successful marketing assistant and from where her territory sales people wanted to get rid of her she was nominated for employee of the year.  It is not rocket science, but you do have to care as much as you say you do.

This concept I speak of and the one utilized with my employee is based upon the book I believe is one of the best guides ever printed and if you get the chance read it and get the CD to listen in your car on the way to work.  Stephen Covey of Franklin Covey has been at the forefront of this thinking for years and his book Principled Centered Leadership is to me at least its bible.

It is much more complicate than just this but….If you have been following this blog you know I started out preaching the need for vision and then a mission statement then once achieved the focus starts getting narrower.

So stop today before you go on Craigslist or LinkedIn to place that ad and ask yourself, “Am I hiring a person to do what?, and am I am hiring them because I know how we want it done?, and am I providing this person with the resources when they have questions to learn? and am I committed to this being a successful hire because we will have accountability sessions where we review the whole process including my effort and what we have promised.

If you do this, your interviews will be much more focused and your hires will understand why they are there and when the process is followed goals and results will not get away from you.  If you would like more information this and other thoughts about your hiring strategy call us at 619 550 1198 or email me at Michael@santafeadvisoryservices.com