What is the Plan for your Company in 2015?
2015 Wealth Strategy Insights for Entrepreneurs
The Big Idea. For those companies that survived the recession of 2008/2009, especially those middle market and emerging technology service businesses, the question now becomes? Should I make my company a “lifestyle company” or should I develop a growth plan and develop my business to be an "institutional enterprise" that creates exponential wealth and longevity?
The Economy. While 2014 saw a rise in growth capital funding and both strategic and financial / private equity M&A; 2015 will be a defining year for entrepreneurs as they are forced to make a myriad of decisions which will ultimately answer the question: Do I change my business model to become a market leader or shift to maximizing profits?
2015 Investment Decisions:
- Upgrade technology platforms to state-of-the-art or maintain status quo?
- Upgrade team competencies and capabilities to deploy new products/services?
- Invest in channel & sales distribution and new markets/geographies or maintain referral based organic growth?
Business leaders face a more costly and fast-paced digital driven, consumer-driven economy than ever before as the entrepreneurship risk and cost of failure is greater now than in anytime over the past 30 years.
But at the same time there are numerous opportunities to create market / sector leaders as consumers/buyers look for the next big thing and also want to ease their daily / ongoing functions and transactions.
- A Pattern of Consolidation. Industry in America as a whole is undergoing significant consolidation as leaders turn to inorganic growth to boost revenue and expand geographic footprints. Leaders are doing both: building their distribution footprint and portfolio to improve market share and strengthening their operational capabilities with presence in lower cost areas. M&A activity in the coming year will depend on a number of factors, including the ever present slow growth economic conditions. Gradual improvements in economic conditions and stable debt markets should help sustain growth in the overall M&A market, although economic uncertainty will dampen global consolidations. With interest rates at historic lows and companies looking for revenue growth opportunities, acquisitions are a natural venue to bolster market share, build out brands and fuel longer-term strategic initiatives.
- There is no doubt that this is a " Buyer's Market" for the near-term and that a diversified portfolio is key to serving the maximum number of customers.
- The nearshore LATAM region has become a receptacle for growth: some 120 new BPO facilities comprising approximately $350M in foreign investment in the past 3 years alone. Even with these impressive growth statistics in that region, Ephor Group has determined the total capacity utilization of BPOs in LATAM is in the lower 25% quartile, while the English speaking capacity utilization is even less. Of particular note, there exist a particular opportunity for the Healthcare Business Services BPO’s to expand and prosper in LATAM. Read more online: BPO LATAM Nearshore Findings. Geographic expansion near-shore should be a consideration for all service companies in that growth dynamics in LATAM will exceed double digits in the near term.
Wealth Outcomes. Leaders have to decide whether they have at their accessibility and disposal, the complex skills required to create exponential wealth.
The definition of success is creating wealth which in today's turbulent economy requires the best business model in your sector, at a minimum a unique portfolio of products/services, the best performing workforce, and the most skilled leadership team.
Paradigm of Change. In the past company capability and “skill deficiency” issue has been solved by retaining functional/domain operators and consultants to temporarily provide these needs via a “bottom up” or task oriented approach. In the “new economy” this approach has frequently failed. What has proven successful is a “top down” holistic approach that builds the long-term capability and capacity of the organization. Additionally, advisory boards or formal board of directors have proven likewise generally ineffective due to the “emerging business leader” simply does not have the time or skill requisite to manage and facilitate effective outcomes from a “pool of resources.”
The gap is most often management of the transition from a subscale business to a scaled market sector leader. Significant change of whom benefits from the transformation of a startup into a market leader is required to ensure America's innovation leadership and entrepreneur spirit reigns. Most businesses fail to capitalize on the original idea of their founding. In fact, less than 1% of all startups make it to year ten, and less than 1% realize a successful wealth exit. Entrepreneurs creating wealth for others is a nice byproduct of growth, but working for themselves versus a financial backer, banker, or venture capitalist is a fundamental change required for our economy becoming more prosperous and resilient and for more industry and sector leaders to be developed and succeed. A shift from the entrepreneur in viewing success as launch, to the goal of maximizing the wealth opportunity for the business is critical to the future of the entrepreneur, his business, and the American economy.
Read more from Ephor Group, related blog posts:
The Most Common Entrepreneur Mistake
The Common Mistakes Of Private Company Boards
The Most Common Entrepreneur Financing
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The Most Common Entrepreneur M&A Mistake
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