It is no secret that behind every successful investment manager there is a written, measurable and repeatable investment strategy. However, many investors jump from one trade to another, putting little effort into creating and measuring their overall strategies.
Read on to learn four questions that, when answered, will help you create a better investment strategy. The following questions will help you create an investment strategy that is written, measurable and backed by your own strong beliefs. This will lead to more consistent investment performance and help you mitigate emotional investment decisions. Most importantly, it will help you avoid a scattered portfolio of individual investments that, when looked at as a whole, have no overall theme or objective.
(1) Can you write down your investment strategy as a process?
To quote the late Dr. W. Edwards Deming, a world famous author and management quality consultant, "If you can't describe what you are doing as a process, you don't know what you are doing." Like anything that requires a disciplined process, it is important to write down your investment strategy. Doing this will help you articulate it. Once your strategy is written, you should look over it to make sure that it matches your long-term investment objectives. Writing down your strategy gives you something to revert back to in times of chaos, which will help you avoid making emotional investment decisions. It also gives you something to review and change if you notice flaws, or your investment objectives change. If you are a professional investor, having a written strategy will help clients better understand your investment process. This can increase trust, mitigate client inquiries and increase client retention.
(2) Does your investment strategy contain a belief about why investments become over or undervalued? If so, how do you exploit that?
This question could relate to whether or not you believe that investment markets are efficient. Ask yourself, "What makes me smarter than the market? What is my competitive advantage?" You may have special industry knowledge or subscribe to special research that few other investors have. Or, you may have beliefs about exploiting certain market anomalies, like buying stocks with low price-to-earnings ratios. Once you have decided what your competitive advantage is, you must decide how you can profitably execute a long-term trading plan to exploit it.
Your trading plan should include rules for both buying and selling investments. Also, keep in mind that your competitive advantage can eventually lose its profitability simply by other investors implementing the same strategy. On the other hand, you may believe that investment markets are completely efficient, meaning that no investor has a consistent competitive advantage. In this case, it is best to focus your strategy on minimizing taxes and transaction costs by investing in passive indexes. (To read more on market efficiency and market anomalies, see What Is Market Efficiency?, and Making Sense Of Market Anomalies.)
(3) Will your investment strategy perform well in every market environment? If not, when will it perform the worst?
There is an old saying on Wall Street, "The market can remain irrational longer than you can remain solvent." Good investment managers know where their investment performance comes from, and can explain their strategy's strengths and weaknesses. As market trends and economic themes change, many great investment strategies will have periods of great performance followed by periods of lagging performance. Having a good understanding of your strategy's weaknesses is crucial to maintaining your confidence and investing with conviction, even if your strategy is temporarily out of vogue. It can also help you find strategies that may complement your own. A popular example of this would be mixing both value and growth investing strategies.
(4) Do you have a system in place for measuring the effectiveness of your investment strategy?
It is difficult to improve or fully understand something that you do not measure. For this reason, you should have a benchmark to measure the effectiveness of your investment strategy. Your benchmark should match your investment objective, which in turn, should match your investment strategy.
Two common types of investment benchmarks are relative and absolute benchmarks. An example of a relative benchmark would be a passive market index, like the S&P 500 Index or the Barclays Aggregate Bond Index. An example of an absolute benchmark would be a target return, such as 6% annually. Although it can be a time consuming process, it is important to consider the amount of risk you are taking relative to your investment benchmark. You can do this by recording the volatility of your portfolio's returns, and comparing it to the volatility of your benchmark's returns over of periods of time.
Saturday, August 21, 2010
Monday, August 16, 2010
TIPS ON PERSONAL FINANCIAL PLANNING
A considerable number of us do not plan for life in retirement. Unfortunately, our future financial security is not determined by how much we are making now, but how much we can keep and for how long. Corporate and government pension schemes have proved to be unreliable. In Britain, they talk about Self-Invested Personal Pension (SIPP) while the Americans call it Independent Retirement Account (IRA). No matter the nomenclature, you have to make an alternative provision for yourself.
It is estimated that we will need about 60% to 70% of our current income after our active years are over. We can estimate the amount we will need at old age. First, estimate how long you will live for after retirement (say 30 years); then multiply by 60% of your current income (say, 60% of NGN1.2m per annum= NGN720, 000). Thus, you will need NGN21.6m during your old age (30x NGN720, 000). Divide NGN21.6m by the number of years to retirement (how long you still need to work), say 25 years, you need to save NGN864, 000 annually (NGN72, 000 monthly). Using the power of compounding to your advantage, you do not need to save NGN72, 000 monthly for retirement. Assume you invest at 10% interest for annum, you need to save a total of NGN1, 993,594 now (NGN21.6m= P (1.1)25)! You could save what you need to secure your future in less than 5 years.
The following are guides on securing your future:
1.Reduce your liabilities: Liabilities are things that drain your financial resources, e.g. car loan, mortgage and so on. Reducing them will help increase your savings which can be used for investment purposes. Wise people save first and spend the remainder, not spend first and save the remainder.
2.Stocks Investing: Stocks offer a much higher return but is risky if you are not financially informed. However, when you do your homework, you could profit from the ignorance of other market participants.
3.Real Estate: This investment vehicle is safer than stocks but has a lower return. A great obstacle is the huge capital requirement which makes it available to only those with enough capital.
4.Treasury Bills and Government Bonds: These are government securities that are completely risk-free. However, their returns are very low.
5.Insurance: It is a good investment. One could become an annuitant receiving a fixed payment for a specified period or for life after retirement. However, a lot of us in this part of the world have yet to embrace it.
6.Emergency Fund: Keep fund for exigencies. It could be in a bank savings or any other liquid asset.
STOCK RECOMMENDATIONS
Courteville Investment Plc
Profile
Courteville began operations as a financial services provider in January, 2005. In a bid to remain relevant in the fiercely competitive financial services sector, it embarked on elaborate research. This culminated in the identification of a vacuum in motor vehicle administration and other public processes, and the subsequent development of an e-platform to provide business solutions.
AutoReg, which is the major product, automates motor vehicle licensing for the government while its affiliate, AutoReg Hackney issues a certificate, which is renewable annually, to owners of motor vehicles and motorcycles operating within a state. Other product offerings include AutoInsure, AutoReg Inspector, AutoReg Enumerator and AutoRegtive Shopping.
Strategy
The business solutions sector is, indeed, a very dynamic one; its success depends to a large extent on a robust information technology (IT) infrastructure. Therefore, the company has expended large sums of money (NGN1.2b at 2009 year end) to re-engineer its IT infrastructure in order to keep abreast of new technology and prevent business disruptions. This has, no doubt, impacted earnings positively-amid the economic quagmire.
AutoReg, which was first launched in Lagos, has now been deployed in additional 11 states in Nigeria. Decisive efforts are being made to penetrate some countries in Africa. This African Expansion Project which gulped NGN4.1m in 2009 may bear fruit soon as negotiations have reached an advanced stage in few countries.
Besides, more products are being developed to maximize Courteville's platform capacity. During the year (2009), products like AutoReg Property Revenue Manager, Education Management System and AutoReg Insurance Verification Enterprise Solution were developed. We believe that the innovation of the management will pay off if only it is supported with concrete marketing campaign.
Management and Corporate Governance
The board, which comprises 7 directors, is chaired by Chief (Dr.) Michael Ade Ojo. Mr. Adebola Akindele, the Managing Director, leads the management team. All the directors seem to be dedicated since they have a high stake in the business; they control 55.2% of the company up from 52.2% of 2008. Judging by the performance parameters, the board and management have performed above average.
Financials
Income grew by 50.6% in 2009 compared with 92.1% achieved a year earlier. Commissions from AutoReg business accounted for 70.5% of gross income. Though e-commerce contributed 4.1% of revenue, it was better than 0.6% of 2008. Profit After Tax (PAT) dipped 33.6% owing to diminution in the value of investment and increasing costs. Cost to turnover ratio increased by 13.5% to close at 45% while selling and administrative expenses to turnover ratio rose from 20.7% in 2008 to 26.9% in 2009. Earnings Per Share (EPS) lost 33.3% in the period owing to decline in PAT. Operating margin decreased to 28.1% down from 47.8%. Although shareholders got 65.3% of PAT as dividends, returns nosedived; both Return on Equity (RoE) and Return on Assets (RoA) went down by 4.1% and 3.5% respectively.
Courteville does not, in any way, have difficulty in meeting its obligations to creditors as interest cover is15.4 times and current ratio is 2.7. Courteville is highly solvent; long-term debt is less than 2% of shareholders' fund while its total liabilities are 12.8% of it. Despite the huge capital investment, Courteville is not highly geared. Even its operational cashflow can pay its interest 10.4 times and its long-term debt 4.1 times. Long-term loans from both Oceanic Bank and Fidelity Bank are 19.5% of current net earnings. So, Courteville is financially strong.
Valuation
Courteville has a trailing P/E of 8.2 times which when multiplied by its historical EPS of NGN0.06 translates to a price of NGN0.5. Using DCF analysis, we arrived at a price ranging from NGN1 to NGN2.1 for a share. Its book value is N0.83 per share.
We expect a 3-year compound annual growth rate in revenue and net earnings of 34.3% and 32.9% respectively. The expected return a share of the company in three years is 39.9%.
Thesis
Despite the increase in the number states that used AutoReg in the period (5 additional ones), profitability and returns to shareholders dropped. We are of the opinion that the recession took a heavy toll on Courteville's business. And the expenses incurred in research and development will pay off going forward. Also, expenses incurred to gain new grounds should be worth the while.
Furthermore, the patent granted Courteville in twelve states is commendable. Courteville has less financial risk and it is trading below its fair value estimate.
Business Risk
Courteville's business is largely technology- driven; research and development was 44.1% of total assets in 2009 (47.4% in 2008). So, technological changes will require huge capital investment which could threaten operational cashflow and profitability.
Besides, commissions from the 12 state governments using AutoReg form a bulk of its revenue (70.5% in 2009; 72.5% in 2008). Though there is no doubt about the credit-worthiness of these state governments, a change of policies could pose a danger to Courteville. As the major buyers, the governments have a high bargaining power; they could negotiate for better deals that may have adverse effect on Courteville's revenue.
However, management is not resting on its oars; it is working on improving the contributions of its other e-commerce products. In 2009, they contributed 4.1% compared to 0.6% of 2008.
Economic Moat
Courteville has an average competitive edge, having obtained a 20-year patent on its AutoReg business in Nigeria. Also, governments may be reluctant to change to another service provider because of the high costs of shifting its already automated vehicle administration system. In other words, its major customers may be locked-in.
Its African Expansion project, if successful, could help consolidate its hold on the market.
RECOMMENDATION: Buy
Vital Statistics
Recent Price: NGN0.50
Fair Value: NGN1.00-NGN2.10
Buy Below: NGN1.00
Competitive Advantage: Medium
Earnings Stability: Medium
Expected Return: 39.9%
It is estimated that we will need about 60% to 70% of our current income after our active years are over. We can estimate the amount we will need at old age. First, estimate how long you will live for after retirement (say 30 years); then multiply by 60% of your current income (say, 60% of NGN1.2m per annum= NGN720, 000). Thus, you will need NGN21.6m during your old age (30x NGN720, 000). Divide NGN21.6m by the number of years to retirement (how long you still need to work), say 25 years, you need to save NGN864, 000 annually (NGN72, 000 monthly). Using the power of compounding to your advantage, you do not need to save NGN72, 000 monthly for retirement. Assume you invest at 10% interest for annum, you need to save a total of NGN1, 993,594 now (NGN21.6m= P (1.1)25)! You could save what you need to secure your future in less than 5 years.
The following are guides on securing your future:
1.Reduce your liabilities: Liabilities are things that drain your financial resources, e.g. car loan, mortgage and so on. Reducing them will help increase your savings which can be used for investment purposes. Wise people save first and spend the remainder, not spend first and save the remainder.
2.Stocks Investing: Stocks offer a much higher return but is risky if you are not financially informed. However, when you do your homework, you could profit from the ignorance of other market participants.
3.Real Estate: This investment vehicle is safer than stocks but has a lower return. A great obstacle is the huge capital requirement which makes it available to only those with enough capital.
4.Treasury Bills and Government Bonds: These are government securities that are completely risk-free. However, their returns are very low.
5.Insurance: It is a good investment. One could become an annuitant receiving a fixed payment for a specified period or for life after retirement. However, a lot of us in this part of the world have yet to embrace it.
6.Emergency Fund: Keep fund for exigencies. It could be in a bank savings or any other liquid asset.
STOCK RECOMMENDATIONS
Courteville Investment Plc
Profile
Courteville began operations as a financial services provider in January, 2005. In a bid to remain relevant in the fiercely competitive financial services sector, it embarked on elaborate research. This culminated in the identification of a vacuum in motor vehicle administration and other public processes, and the subsequent development of an e-platform to provide business solutions.
AutoReg, which is the major product, automates motor vehicle licensing for the government while its affiliate, AutoReg Hackney issues a certificate, which is renewable annually, to owners of motor vehicles and motorcycles operating within a state. Other product offerings include AutoInsure, AutoReg Inspector, AutoReg Enumerator and AutoRegtive Shopping.
Strategy
The business solutions sector is, indeed, a very dynamic one; its success depends to a large extent on a robust information technology (IT) infrastructure. Therefore, the company has expended large sums of money (NGN1.2b at 2009 year end) to re-engineer its IT infrastructure in order to keep abreast of new technology and prevent business disruptions. This has, no doubt, impacted earnings positively-amid the economic quagmire.
AutoReg, which was first launched in Lagos, has now been deployed in additional 11 states in Nigeria. Decisive efforts are being made to penetrate some countries in Africa. This African Expansion Project which gulped NGN4.1m in 2009 may bear fruit soon as negotiations have reached an advanced stage in few countries.
Besides, more products are being developed to maximize Courteville's platform capacity. During the year (2009), products like AutoReg Property Revenue Manager, Education Management System and AutoReg Insurance Verification Enterprise Solution were developed. We believe that the innovation of the management will pay off if only it is supported with concrete marketing campaign.
Management and Corporate Governance
The board, which comprises 7 directors, is chaired by Chief (Dr.) Michael Ade Ojo. Mr. Adebola Akindele, the Managing Director, leads the management team. All the directors seem to be dedicated since they have a high stake in the business; they control 55.2% of the company up from 52.2% of 2008. Judging by the performance parameters, the board and management have performed above average.
Financials
Income grew by 50.6% in 2009 compared with 92.1% achieved a year earlier. Commissions from AutoReg business accounted for 70.5% of gross income. Though e-commerce contributed 4.1% of revenue, it was better than 0.6% of 2008. Profit After Tax (PAT) dipped 33.6% owing to diminution in the value of investment and increasing costs. Cost to turnover ratio increased by 13.5% to close at 45% while selling and administrative expenses to turnover ratio rose from 20.7% in 2008 to 26.9% in 2009. Earnings Per Share (EPS) lost 33.3% in the period owing to decline in PAT. Operating margin decreased to 28.1% down from 47.8%. Although shareholders got 65.3% of PAT as dividends, returns nosedived; both Return on Equity (RoE) and Return on Assets (RoA) went down by 4.1% and 3.5% respectively.
Courteville does not, in any way, have difficulty in meeting its obligations to creditors as interest cover is15.4 times and current ratio is 2.7. Courteville is highly solvent; long-term debt is less than 2% of shareholders' fund while its total liabilities are 12.8% of it. Despite the huge capital investment, Courteville is not highly geared. Even its operational cashflow can pay its interest 10.4 times and its long-term debt 4.1 times. Long-term loans from both Oceanic Bank and Fidelity Bank are 19.5% of current net earnings. So, Courteville is financially strong.
Valuation
Courteville has a trailing P/E of 8.2 times which when multiplied by its historical EPS of NGN0.06 translates to a price of NGN0.5. Using DCF analysis, we arrived at a price ranging from NGN1 to NGN2.1 for a share. Its book value is N0.83 per share.
We expect a 3-year compound annual growth rate in revenue and net earnings of 34.3% and 32.9% respectively. The expected return a share of the company in three years is 39.9%.
Thesis
Despite the increase in the number states that used AutoReg in the period (5 additional ones), profitability and returns to shareholders dropped. We are of the opinion that the recession took a heavy toll on Courteville's business. And the expenses incurred in research and development will pay off going forward. Also, expenses incurred to gain new grounds should be worth the while.
Furthermore, the patent granted Courteville in twelve states is commendable. Courteville has less financial risk and it is trading below its fair value estimate.
Business Risk
Courteville's business is largely technology- driven; research and development was 44.1% of total assets in 2009 (47.4% in 2008). So, technological changes will require huge capital investment which could threaten operational cashflow and profitability.
Besides, commissions from the 12 state governments using AutoReg form a bulk of its revenue (70.5% in 2009; 72.5% in 2008). Though there is no doubt about the credit-worthiness of these state governments, a change of policies could pose a danger to Courteville. As the major buyers, the governments have a high bargaining power; they could negotiate for better deals that may have adverse effect on Courteville's revenue.
However, management is not resting on its oars; it is working on improving the contributions of its other e-commerce products. In 2009, they contributed 4.1% compared to 0.6% of 2008.
Economic Moat
Courteville has an average competitive edge, having obtained a 20-year patent on its AutoReg business in Nigeria. Also, governments may be reluctant to change to another service provider because of the high costs of shifting its already automated vehicle administration system. In other words, its major customers may be locked-in.
Its African Expansion project, if successful, could help consolidate its hold on the market.
RECOMMENDATION: Buy
Vital Statistics
Recent Price: NGN0.50
Fair Value: NGN1.00-NGN2.10
Buy Below: NGN1.00
Competitive Advantage: Medium
Earnings Stability: Medium
Expected Return: 39.9%
TIPS FOR EDGING AGAINST SALES CRISIS
The upshot of the abating economic quagmire is dwindling corporate earnings. So, measures must be adopted to rescue the business from imminent collapse. Taking your sales to the next level requires the following purposeful action steps:
Positive Attitude: Negative attitude, during conversations, inhibits sales success. Be optimistic and associate with optimistic people.
Sales Goals: Formulate your sales goals and act on them. Top salespeople often encounter rejection. When you run into obstacles you have to refuse to give up. As Henry Ford once said, “Failure is the opportunity to begin again, more intelligently.” Obstacles are latent opportunities.
Superior Services: It is an irrefutable fact that the reason most customers do not repeat their purchases is they feel you do not care, or show indifference. Make a list of your top customers, and call one each day, asking,” Is there a way I could serve you better?” It opens the doors of endless possibilities.
Gain Access: Ask for referrals from great customers; send out helpful information to key prospects. If you can uncover information about the prospect-such as his or her challenges (business or personal)-and then research information and materials that could be useful for that person, it makes a lasting impression.
Listen More: Most customers prefer salespeople who listen more but talk less. Get them talking about their challenges, goals and interests.
Follow Through: When you follow up with a call, a thank-you note, it ensures that the customer feels important and not like he or she has been sold.
Positive Attitude: Negative attitude, during conversations, inhibits sales success. Be optimistic and associate with optimistic people.
Sales Goals: Formulate your sales goals and act on them. Top salespeople often encounter rejection. When you run into obstacles you have to refuse to give up. As Henry Ford once said, “Failure is the opportunity to begin again, more intelligently.” Obstacles are latent opportunities.
Superior Services: It is an irrefutable fact that the reason most customers do not repeat their purchases is they feel you do not care, or show indifference. Make a list of your top customers, and call one each day, asking,” Is there a way I could serve you better?” It opens the doors of endless possibilities.
Gain Access: Ask for referrals from great customers; send out helpful information to key prospects. If you can uncover information about the prospect-such as his or her challenges (business or personal)-and then research information and materials that could be useful for that person, it makes a lasting impression.
Listen More: Most customers prefer salespeople who listen more but talk less. Get them talking about their challenges, goals and interests.
Follow Through: When you follow up with a call, a thank-you note, it ensures that the customer feels important and not like he or she has been sold.
Saturday, August 14, 2010
9 TIPS FOR BUSINESS GROWTH AND SUCCESS
Every economy teaches us to expect the worst, but have you ever prepared for the best?
In Business the best thing is to have contingency plans in place before things go wrong. But, conversely, are you prepared for growth and success? What if it turns out your positive expectations were too conservative? What if an unexpected celebrity endorsement sends demand for your product soaring? Practically, if the economy gives signals of turning around, are you ready for that in your business operation?
Here under listed what are expected of you for growth:
a . IDENTIFIED WHAT GROWTH MEANS TO YOU AND YOUR BUSINESS When preparing for something, you have to know what it is and how you'll recognize it. Growth goes beyond mere hitting a set of targets. It is a process which involves changes to your company in terms of operations, production, staffing and facilities. Furthermore, determine what growth means to you personally. What will your life be like when your company grows and profits increase? How hard are you going to have to work? Are you ready and willing to do what it takes?
b. SOURCESES OF FUND
The more faster your company grows, the more cash you're likely to need. To get financing to meeting the growth rate is as every bit as hard--if not harder--to obtain than startup funding. Constant cash flow projection is very imperative to know how much credit you're going to need well before you have to start writing cheques Ensure there is strong and persistence relationships with your funding sources and be sure to have primary and backup sources available.The present day economic situation makes things seem harder than ever to predict credit availability, try to build up your financial backing to maneuver cash-crunch when it's time to borrow.
c. GET COMFORTABLE BEING IN THE SPOTLIGHT
Successful owners of growing companies are almost always in the spotlight to some degree--maybe not always to the general public but certainly within your industry and with your employees. Be prepared for a level of attention that you probably haven't received before.
d. IMBIBE TEAMWORK-ESPRIT DE CORE
Try to form team spirited group because the team that can successfully run a $1 million company is different from those that can run a $100 million company. If your goal is growth, hire people who can perform in the size company you want to be--they'll help you get there.
e. SOURCE FOR WELL EXPERIENCED HANDS
Employing the right people doing the right jobs is very essentials ingredient for growth sustanance. Whole person assessments and job benchmarking will allow you to take a systematic approach to hiring and career development, which will reduce your mis-hires and employee turnover.
f. TAKE CARE AND MOTIVATE YOUR EMPLOYEES
Your employees are power-machine behind a business success.. Recognize and reward that. Working in a high-growth organization is stressful and challenging. Take note of your employees' work and respond appropriately, or risk losing top talent. Create an environment where people are willing to work through the growing pains. In addition, take care of your suppliers, professional advisors and anyone else who can have an effect on your operation.
g. SEEK EXPERTS ADVICE
Nobody is an island of himself. You may have an expertise experience in your business, but you don't know it all. What's more, there often will be experts who know more about particular parts of an industry than the insiders. Identify the experts, listen to them and learn from them. Let them help smooth out your learning curves and keep you on your growth track.
h. MAINTAIN GOOD CUSTOMER RELATIONSHIP
Customer is a king-the business growth philosophy .No company can do without customers, and if you don't stay close to them, you'll lose them. Know what they need, but more important, know what they want and do everything you can to give that to them. Most important, communicate. Never let your customers wonder what's going on. Tell them--whether it's good or bad.
i. FOCUS ON YOUR CORE BUSINESS AND DO NOT GET DISTRACTED
Stick to the business your company knows best. Be sure any diversification or product line expansion you do makes sense. If it has nothing to do with your core business don't get into it just because it seems like a good opportunity. Otherwise, you'll you confuse your customers and your employees--and you'll likely find that dividing your efforts reduces the quality and profitability of everything.
. When you're prepared for growth, you better can manage the changes it brings and let it take you to the goal you set when you started.Just as you plan for when things go wrong, also plan for when things go well
In Business the best thing is to have contingency plans in place before things go wrong. But, conversely, are you prepared for growth and success? What if it turns out your positive expectations were too conservative? What if an unexpected celebrity endorsement sends demand for your product soaring? Practically, if the economy gives signals of turning around, are you ready for that in your business operation?
Here under listed what are expected of you for growth:
a . IDENTIFIED WHAT GROWTH MEANS TO YOU AND YOUR BUSINESS When preparing for something, you have to know what it is and how you'll recognize it. Growth goes beyond mere hitting a set of targets. It is a process which involves changes to your company in terms of operations, production, staffing and facilities. Furthermore, determine what growth means to you personally. What will your life be like when your company grows and profits increase? How hard are you going to have to work? Are you ready and willing to do what it takes?
b. SOURCESES OF FUND
The more faster your company grows, the more cash you're likely to need. To get financing to meeting the growth rate is as every bit as hard--if not harder--to obtain than startup funding. Constant cash flow projection is very imperative to know how much credit you're going to need well before you have to start writing cheques Ensure there is strong and persistence relationships with your funding sources and be sure to have primary and backup sources available.The present day economic situation makes things seem harder than ever to predict credit availability, try to build up your financial backing to maneuver cash-crunch when it's time to borrow.
c. GET COMFORTABLE BEING IN THE SPOTLIGHT
Successful owners of growing companies are almost always in the spotlight to some degree--maybe not always to the general public but certainly within your industry and with your employees. Be prepared for a level of attention that you probably haven't received before.
d. IMBIBE TEAMWORK-ESPRIT DE CORE
Try to form team spirited group because the team that can successfully run a $1 million company is different from those that can run a $100 million company. If your goal is growth, hire people who can perform in the size company you want to be--they'll help you get there.
e. SOURCE FOR WELL EXPERIENCED HANDS
Employing the right people doing the right jobs is very essentials ingredient for growth sustanance. Whole person assessments and job benchmarking will allow you to take a systematic approach to hiring and career development, which will reduce your mis-hires and employee turnover.
f. TAKE CARE AND MOTIVATE YOUR EMPLOYEES
Your employees are power-machine behind a business success.. Recognize and reward that. Working in a high-growth organization is stressful and challenging. Take note of your employees' work and respond appropriately, or risk losing top talent. Create an environment where people are willing to work through the growing pains. In addition, take care of your suppliers, professional advisors and anyone else who can have an effect on your operation.
g. SEEK EXPERTS ADVICE
Nobody is an island of himself. You may have an expertise experience in your business, but you don't know it all. What's more, there often will be experts who know more about particular parts of an industry than the insiders. Identify the experts, listen to them and learn from them. Let them help smooth out your learning curves and keep you on your growth track.
h. MAINTAIN GOOD CUSTOMER RELATIONSHIP
Customer is a king-the business growth philosophy .No company can do without customers, and if you don't stay close to them, you'll lose them. Know what they need, but more important, know what they want and do everything you can to give that to them. Most important, communicate. Never let your customers wonder what's going on. Tell them--whether it's good or bad.
i. FOCUS ON YOUR CORE BUSINESS AND DO NOT GET DISTRACTED
Stick to the business your company knows best. Be sure any diversification or product line expansion you do makes sense. If it has nothing to do with your core business don't get into it just because it seems like a good opportunity. Otherwise, you'll you confuse your customers and your employees--and you'll likely find that dividing your efforts reduces the quality and profitability of everything.
. When you're prepared for growth, you better can manage the changes it brings and let it take you to the goal you set when you started.Just as you plan for when things go wrong, also plan for when things go well
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