As entrepreneurs, we all want to grow our companies, but many don’t know how to facilitate growth. Or sometimes we do, but then we reach a level where what we were doing, no longer gets results. If that’s you, read on.
Founder-led companies go through more changes than entrepreneurial-led businesses that were acquired later in their lifecycle. Founders go through the sometimes more painful process of growth from infancy to becoming a solid lower middle-market company.
In the early years, founders are doing anything and everything to get the business off the ground. As the entity’s income grows, the founder can thankfully bring on help. This growth era makes the founder a kind of “jack of all trades.” They successfully navigate engineering, machining, sales, customer relations, accounting, and HR.
This can give an entrepreneur a Superman complex. We can do it all and we don’t need help. Inevitably, manufacturing business growth leads to problems. Problems can be anything from:
- Lack of clarity and focus
- Strategizing a growth plan
- Lack of skilled workers
- Creating a positive Company culture
- The need for an ERP system and the difficulty of implementing
- Sales & Marketing
- Brand awareness and positioning in the marketplace
- Cash flow and accounting
- The need to implement lean
- ISO and other certifications to remain competitive
I’m sure any entrepreneur reading this could add to this list. The challenge for entrepreneurs is to understand that although they did everything in the early years, they will need targeted expert help if they want to accelerate manufacturing business growth. Many may say that it’s not worth the cost. Statistics say otherwise.
Expert Help – Benefits vs. Cost
According to Dr. Merrill C. Anderson, a Fortune 500 Company wanted to study the ROI of Executive Coaching. They concluded that the coaching produced a 788% return on investment. In another survey of 100 executives in Fortune 1000 companies, participants realized a 6 X ROI.
Coaches provide visibility into your business that you might not have because you’re too close to it. There’s value in getting unbiased third-party insights. Specialty coaches and professionals can also bridge the knowledge gaps in an organization.
Getting Clarity on Vision, Priorities & Goals
On focus and strategy, we spoke to Michael Barrovechio of Capo Leadership Consulting, who states, “Many high-achieving entrepreneurs and executives understand that they need help in maximizing their personal and professional potential. They sometimes lose sight of their big picture as they work on the daily details of their business. My mission is to walk alongside them and help them clarify their personal and professional vision, set goals, stay focused, generate ideas, navigate obstacles, and remain resilient.” Michael helped one client achieve 535% revenue growth by helping them strategize priorities.
Dealing With Labor Shortages & Work Culture
On employee engagement and work culture, Lisa Ryan, best-selling author of ten books including “Manufacturing Engagement: 98 Proven Strategies to Attract and Retain Your Industry’s Top Talent,” opines:
“In today’s employee-centric job market, it’s more important than ever to create a culture where people feel valued, appreciated, and heard. Although this may sound like “soft skills,” there is nothing soft about the results. When employees are engaged, they are more likely to stay with you. They have fewer safety accidents, are more productive, and provide greater quality work. When you put pen to paper and see what your turnover is costing you, you’ll discover that investing in your employees and workplace culture gives you a huge bang for your buck. The small moments of connection, gratitude, and employee appreciation, done consistently, keep your top talent from becoming someone else’s.”
Benefits of Implementing Lean and Becoming ISO Certified
On the more technical side, John Kennedy, CEO of New Jersey Manufacturing Extension Program, Inc. shared the following on the benefits of implementing Lean and becoming ISO certified:
“There is a way for manufacturing businesses to immediately start improving their operation, and it’s called Lean. Manufacturers have the opportunity to reduce waste, improve efficiency, and create a more productive workforce by employing its principles. The only caveat is that at the heart of Lean is the phrase, continuous improvement. Without support and buy-in from every level of the organization, a Lean operation will not remain Lean. Instead, it will default back to the old ways of doing business. MEPs play an essential role in helping a manufacturing business become and continuously improve their Lean initiative. Through training, consulting, and a long-lasting partnership, MEPs help manufacturers ensure they’re always continuously improving.
“When it comes to ISO, it has to be understood that some of the certifications available can help a manufacturing industry break into new markets. These standardized quality control procedures come in many forms. There are general ISO certifications like 9001:2015, and much more specific certifications like the one for medical device manufacturers, ISO 13485:2016. So not only is it challenging for a manufacturing business to become ISO certified on their own, it’s difficult to find out which ISO cert. may be the right one for your business. That’s where MEPs come in. We have experts available to do the heavy lifting and make sure you’re set up for success. There’s no reason to start this journey on your own when you have partners willing and able to help.”
Sales and Marketing For Today’s Manufacturer
As an M&A intermediary specializing in the sale of manufacturing companies nationally, the component I see most often lacking in founder lead organizations is a sales and marketing function contributing to brand awareness. If companies focused on this during the years approaching their desire to sell, they would be much better positioned for the M&A process and likely sell at a higher price.
We spoke with an expert in marketing for the manufacturing sectors, Joe Sullivan of Gorilla 76, LLC. Joe tells us, “The industrial buying process has dramatically changed over the past decade. A vast majority of midsized B2B manufacturers, especially those second- and third-generation family-owned businesses, have built their companies on the backs of reputation, referrals and repeat business. But as we move deeper into an era where Millennials are taking on positions of buying power in their respective organizations, and when information about anything is a Google search away, we need to fundamentally change the way we think about creating awareness, building trust and opening the door to sales conversations.
“Whereas ‘marketing’ has traditionally been viewed as just another expense on the P&L, there to facilitate trade shows and create materials to support the sales team, its future in manufacturing is about proactively creating demand in front of the buying process influencers from the right companies. And that requires a whole new playbook.”
For most, this new playbook will require expert help to implement, because it’s so different from the old manufacturing paradigm.
The thought I want to leave you with is that coaches can help you get to the next level and provide a bridge over gaps in your team’s knowledge base. They can accelerate growth in specific areas. Also, seek a specialist in the area you’re struggling in.
Don’t hire the sales and marketing specialist if your manufacturing throughput is what needs correction. Having worked with several coaches and consultants at different stages of my almost 30-year career, I would offer for consideration that the order in which you do things matters. As a manufacturer, if you’re engaging with a sales and marketing firm, make sure you have addressed and are prepared for the capacity issues that an influx of business will bring. A good strategy coach can help you plan the appropriate action steps.
What accelerates manufacturing business growth? It’s hiring specialists to guide you and facilitate growth in specific areas. It’s investing in your business, yourself, and your team. What accelerates manufacturing business growth is the process of continual improvement. This investment always has a price, but it also provides a very high ROI.
At Accelerated Manufacturing Brokers, Inc. we’re passionate about manufacturing business improvement and growth. What makes manufacturing companies successful, also makes them easier to sell and makes them sell at higher prices in support of the owner’s retirement. This is a great result for both the owners and the employees. Strong manufacturing companies attract quality buyers that will continue to grow the business, providing future advancement opportunities for the staff. Also, a strong, growing manufacturing company is great for the employees and the communities the business is located in.