Temporary CEO – Corporate Turnaround

TFG has added to it’s menu of services for small to mid-sized businesses CORPORATE TURNAROUND and TEMPORARY CEO services.  Following successful trials these services are now available.

Has your company suffered a critical setback and require the services of a professional manager?  This can happen due to illness, death, or other instances that remove an owner or key person.

Are you ready to sell and need to get the company prepared?

Are you ready to transition to family members who are not as ready to run the place as they need to be?

Do you want out and have lost the energy needed to position your company for sale risking a loss of all you have built over the years?

Has something gone wrong–a change in the market, loss of a critical customer or an intervening event–and you need someone to step right in and straighten things out?

These are some of the tasks for which The Fremont Group has prepared key Success Partners.  Give us a call!

303 338 9300

We are often asked, “Why should we work with The Fremont Group? What could they do for us?” Here is the answer:

Every business owner “owns” a “system.” It is a system that converts market demand for their goods or services into cash. Our Success Partners have “been there and done that.” Together with you they design and implement an “Operating System” for your business. The Operating System brings structure, stability, and mature management to the business. At a minimum it includes:
• creating standards of required performance and proper reporting in all areas (sales, operations and administration) so that proper and meaningful delegation can take place and employees can be properly held accountable for pre-determined results;
• control of the money including a budget that interfaces with pricing strategy, cash flow projections that bring sanity to AR and AP decisions, and implements proper use of debt and capital so that profit is budgeted and cash retention is accomplished;
• a consistent schedule of reporting/meetings with sales, operations, and finance so that things don’t “slip through the cracks” and the development of a responsible management team to shoulder responsibility;
• and a time management component so that the owner is focusing on what really matters rather than feeling constantly “stressed out” and unable to do his or her job which is really running the company.
Of course, every company is unique with different strengths and weaknesses. The Success Partner first surveys and gets to understand you and your business so that a tailored Action Plan can be developed with the owner. Then an implementation plan is developed so that the pace of change matches the ability of the company to assimilate the improvements and to be assured that it can be budgeted into the company’s cash flow.
But it is a two-way street. To be successful, The Fremont Group can only work with small business owners who are truly committed to change. The process is at its’ best with three types of owners: (1) The stressed owner who knows that his company is underperforming but simply doesn’t have control; (2) the owner who is contemplating transition—either to a family member or employee, prepare the business for sale or just to reduce the amount of time and stress that is now required; or (3) the owner who recognizes that he has not realized his potential and that he or she is not where they thought they should be by now.
Depending upon the desired result, the process can take weeks, months or years. The Fremont Group generally works in scheduled half-week sessions with regular contact and established benchmarks in between on-site work. Your Success Partner becomes an integral member of your advisory board of directors and a person that an owner can talk to, learn from and share their success with. Are you ready? Let’s talk.

Fatal Mistakes of Cutting Your Price

Everyone has had the experience of wanted a job so badly that they make the most elementary of mistakes. This is, in part, what keeps management consultants in business. I just experienced this first-hand and it moved me to write this post. (I won’t disclose the contractor). They had sent out a bid for some home plumbing work. The bid was over $750 which was significantly more than I had expected. When they followed up I told them that their bid seemed out of my price range. Then came their error–they quickly responded, “What if I can get it down below $600? I am playing with the numbers and I can shave off some of the time. I always figure extra time in for the “uh-oh” type moments.” Really–that is what they replied. So I guess they just were going to screw me with the original bid! I will NEVER use them again for anything.

So what do you do when you want a job and price seems the issue? Rule #1: NEVER LOWER YOUR PRICE WITHOUT TAKING SOMETHING OFF THE TABLE! Doing so simply makes you a whore. His mistake came up front–his bid should have clearly stated the scope of work. Then he could have lowered his price by “taking something off the table.” For example: the bid includes a 5-year warranty of the parts and labor. He could justify lowering the price by telling me that if he took the warranty down to 90-days the price would be less. That maintains the integrity of his first bid (and of his company!) Rule #2: See Rule #1. You cannot just dicker price with a client and maintain your integrity. If one time McDonalds allowed you to get a Big Mac for 50 cents all you would feel is ripped off for every other Big Mac you have ever (or will ever) bought.

In this case, if he really wanted (needed) the job and since he didn’t have a “fall back” he should have said, “I don’t know if we bid your job properly–let me take another look at different ways we could do it and see if there is a less expensive option.”

To get a review by The Fremont Group and see if there are ways that working with a small business management consultant could make you more money give us a call! 303 338 9300

The Cost of Not Seeking Help

On TFG’s Linkedin page, we recently commented on a kickstarter campaign which crashed and burned violently. Worst of all, the project could easily have been a success if only a few key actions had been taken.
Summary: The project was an affordable espresso machine for the home market. Founders just wanted to crowd fund a small production run of 50 units to be made by hand. In pricing the product, the founders discounted their labor to zero. When posting their project, they did not restrict the number of units which could be ordered. In the end, they found themselves on the hook for producing 2000 units. The project collapsed because the cost of creating and perfecting a factory production process was too high. No units were ever shipped.
Their key failing was not seeking advice on their plan from trusted advisors. At the outset, it would be easy to see the project could easily spiral out of control if demand exceeded the 50 units which could be produced. Thus exposing the project’s weaknesses before anything negative happened.
No matter how long you’ve been in business, there’s no excuse for this type of oversight. If you want an honest assessment of your business or strategy, schedule a free webinar with TFG. We’d love the opportunity to earn your trust.

Governmental Regulations

Here is your chance!  We are repeatedly told that governmental regulations are a major problem for small businesses.  Below add your comments—specifically, name a governmental regulation that is affecting your business and how it would help to have it repealed or replaced with your suggestion.  Go for it!

The next bubble to burst will be student loans

The total amount of student loans now exceeds our country’s credit card debt!  A trillion dollars of debt has been accumulated by our young people in simply trying to get the education that they need.  The cost of college has become so absurd that only the wealthy see their children graduate without the burden of significant debt.  This severely limits the career and job choices of these graduates and forces them to take jobs that reduce rather than expand their future earning capacity.  As if this were not enough, some estimates put the future default rate of these loans at over 50%!  As guarantors of those loans the bill will become the obligation of the federal government.  Somewhere we are missing the boat.  We need these young people educated; we don’t need them spending their lives in debt.  From health care education we need to do some serious sole searching—it’s broke and we need to fix it.  To stay the greatest country in the world we have to act like it.

This won’t fix it but we have to start somewhere:  Link to Inc. Magazine

A Break for Young Entrepreneurs

A new White House initiative hopes to alleviate the pressure student debt places on recent grads. Will it do enough?

By Eric Markowitz@EricMarkowitz   | Oct 26, 2011

US President Barack Obama speaks on the steps the administration is taking to increase college affordability by making it easier to manage student loan debt at the Colorado University in Denver, Colorado, on October 26, 2011.

Today President Obama outlined a new effort that he believes will help the country’s youth manage their student debt and enable them to consider starting a company as an option after school.

The program, titled “We Can’t Wait,” will modify the federal government’s “income-based repayment” plan, which allows qualifying students to pay back loans using a monthly percentage of their discretionary income, rather than a flat monthly payment. Currently, eligible students are eligible to cap their loan payments at 15 percent of their discretionary income, but the new proposal calls to lower that number to 10 percent. The plan, which goes into effect on Jan. 1, will also forgive the balance of eligible student’s debt after 20 years of payments, as opposed to 25 years, which is what current law allows.

Tom Kalil, the deputy policy director at the White House Office of Science and Technology Policy, says this new plan will “enable young entrepreneurs not just to get a job, but to create jobs.” And Ellen Kim, a senior advisor at the Office of Investment and Innovation in the Small Business Administration, says that “reducing monthly student loan amounts can buy an entrepreneur several months of runway in terms of operating and getting businesses running.”

The initiative is certainly a boon to current and soon-to-be graduates worrying about loans, especially the 1.6 million young adults that qualify for the plan, most of whom who currently hold low-paying jobs. (You can use this calculator to find out if you’re eligible, based on your income, federal student loan debt, and interest rate.) A White House press release speculates that some young people could even begin saving “hundreds of dollars each month.”

But does the plan do enough?

The total amount of money borrowed by students in the United States in the 2008 to 2009 academic year grew by about 25 percent over the previous year while the average tuition price tag grew six fold since 1981. The average price of tuition and fees at a private four-year college is $27,293, and $7,605 at an average public college, according to the College Board. The cost of college has also risen nearly three times the rate of the cost of living, according to the National Center for Public Policy and Higher Education. In short: college is more expensive than ever, and more students are taking out more loans to pay for it.

Peter Thiel, the famed Silicon Valley investor who backed Facebook in its scrappier days, made headlines earlier this year when he announced his “20 Under 20” program, a plan to pay 20 young students $100,000 to leave college and pursue their start-ups.

“Student debt in America has surpassed even credit card debt,” said Peter Thiel, the famed Silicon Valley investor who backed Facebook, when he announced earlier this year his ’20 Under 20′ program to pay students $100,000 to leave college and pursue their start-ups. “It saps creativity and innovation because it makes people afraid to take even limited financial risks, like those involved with starting a company,” he added. “For the past few years, I’ve worried that the rate of innovation may be slowing down, and such a slowdown could lead to more economic stagnation.”

A 2007 study by Princeton economist Jesse Rothstein supported Thiel’s claim, finding that “debt causes graduates to choose substantially higher-salary jobs and reduces the probability that students choose low-paid public interest jobs,” and reduced the likelihood of students launching their own companies.

Vivek Wadhwa, director of research at Duke University’s Pratt School of Engineering, concurs, based on personal experience. “A lot of my students are afraid to start companies because of their student-loan debt,” he told Inc.com.

So it’s hard not to wonder if the White House’s revised income-based repayment plan is akin to putting a Band-Aid on a broken leg.

The government recognizes it will need a boost from the private sector. The public-private Startup America Partnership led by Steve Case and the Kauffmann Foundation has already mobilized $730 million in private sector commitments.

As part of the “We Can’t Wait” initiative, the White House also announced an unusual partnership with Gen Y Capital Partners, an early stage venture incubator for Generation Y founded by Scott Gerber, the founder of the Young Entrepreneur Council.

“America’s youth are facing a crisis of epidemic proportions right now that nobody until recently had given attention to,” Gerber says. “We risk losing America’s young entrepreneurs because of college student loan debt.”

The Gen Y $10 million fund, which hopes to invest in 100 startups over the next five years, will pay for a founder’s federal student loan debt obligations for up to three years so they can concentrate on their companies during the crucial start-up phase. It will also offer young entrepreneurs the chance to live, rent-free, on college campuses around the country, and provide them mentorship.

The Small Business Administration is, in its own small way, contributing to the effort, too: It recently launched a website to walk young entrepreneurs through the process of reducing their monthly student loan payments.

For now, the White House’s Kalil is hopeful this plan will do enough.

“The combination of lowering student debt, making it easier for young entrepreneurs to raise capital in small amounts using online platforms, and major commitments by the private sector are going to dramatically improve the [start-up] environment,” he says.

OPEN LETTER TO CONGRESS FROM SMALL BUSINESS OWNERS

Get over yourself. We don’t care about the debt; we don’t care about taxes; we don’t care about abortion or marriage—it’s the economy stupid. Debt ceilings, taxes on millionaires—none of that matters—we need JOBS. The “job creaters” are consumers—they could be on welfare or they could be middle class—people who spend their money, not millionaires. People spending money create jobs. Tax policies don’t create jobs; taxes just pay for government. Social issues don’t create jobs; they just help people in need. Government waste is no worse than big corporation waste. Over-taxation is no worse than $8 million CEO’s or obscenely rich fund managers. We need the average person to have a good job so they spend money and our business can flourish.

NOT ONE SINGLE BILL HAS BEEN PASSED IN TWO YEARS THAT EVEN ADDRESSES JOBS. There is time for everything else—where is the legislation to create jobs? The Republicans were thrown out in 2008 because they didn’t create jobs; the Democrats were thrown out in 2010 because they didn’t create jobs—can we throw you all out in 2012?

There is not a single small business owner in the country who has said to him or herself, “I don’t think that I am going to hire and try to make more money because my taxes are too high. Or because I can’t choose what kind of light bulbs I can buy. Or because there is a Planned Parenthood Clinic in town. Or because there wasn’t a war resolution.” Get over it and get the middle class good jobs. Or good bye.