As you will read below, my business coach Victor Cheng writes in-depth and content-rich
emails about revenue growth strategies in any economic condition.
I wanted to share his wisdom with my community. – AD
The annual Forbes 400 list is out and Americans continue their downhill slide.
It used to be 1 out of 2 billionaires was an American.
It is now down to 1 out of 3.. a drop in market share from 50% to 33%.
So which countries are gaining the most ground?
It’s the BRIC countries – Brazil, Russia, India, and China
Those economies are growth economies – both in the short run and long run.
Here’s a summary article on this trend:
http://finance.yahoo.com/career-work/article/112310/worlds-billionaires-2011
I think Americans business owners are hugely disadvantage in the
global marketplace for the simple fact that the average American
simply does not think globally at all.
If you pick a copy of Newsweek on a newsstand in any city in the US and
do the same in any newsstand in Europe, you will notice the articles are completely different.
The US Edition of Newsweek is all about US news.
The version sold in Europe is about GLOBAL news (not just the
country the magazine is sold in, not sure just Europe, and not just the US — but all of it).
When your focus is overly narrow, you risk missing out on opportunity.
I admit about 3 years ago I did not think globally about my own business.
After all I run a small business, not some multi-national Fortune 500
company which one more commonly associates with doing business across borders.
But, when the Great Recession hit, I anticipated that at some point in the future, given all the
economic stimulus and the completely upside P&L statement for the US government, there
would be incredible temptations to solve all those debt problems by printing more money.
All the US government has to do pay off the trillions and trillions of debt is to push 1 button,
and it can “print” trillions of dollars.
This of course creates an entirely different problem called inflation. WHEN (not if) inflation
kicks in, in the US economy, suddenly revenues generated from customers in more stable
economies outside the US become incredibly valuable.
At the time I generated perhaps 7% of my revenues from outside of the U.S. Given the
macro economic trends, I decide this was increasingly risky and stated to keep an open
mind about more global opportunities.
Today, my company generates about 40% of sales from outside the US. This rivals and
even exceeds the geographic revenue mix of many US-based Fortune 500 companies.
Most CEOs artificially constrain their global opportunities due to their own self limiting
beliefs about what is possible in their business.
And while it is true, some types of business will never be global in nature, often it is easier
to go global with a subset of one’s business.
For example, I recently met with the CEO of a heavy industrial construction type company.
In their local market, spending was literally non-existant.
The problem was all of the equipment, facilities, and staff were based in a city where no
demand existed. It was not cost effective to transport everything to other areas just for a single project.
Meanwhile in this exact same company, there was one revenue stream that was growing 100%+ per year.
What was it?
Consulting services.
One of the top people in the company got tired of sitting on his rear all day with nothing to do.
So he picked up his phone and started calling other construction companies in other regions
of the US attempting to do the kind of work this firm specializes in (I forget the exact specialty).
So his pitch was we’ve done 100 of these projects, know exactly what to do, but our local economy is non existent.
I know you are bidding of 5 of these kinds of projects in your area, why don’t you hire us and
we’ll buddy each of your key people with one of our key people and we’ll mentor you on the whole process.
We’ll have our proposals guy show you what has worked for us. Our foreman will be the advisor to your foreman.
Our CFO can walk your CFO through the cash flow cycles unique to this kind of work, etc…
So in this case, the equipment and bodies could not be moved to other geographical areas,
but the expertise of the staff COULD.
This is just one example of thinking differently about your business.
They key is not to think about your business defined in terms of your target customer and current
product/ offerings, but rather think in terms of:
“What the heck is my company extremely good at?”
If your answer to this question is a specific product or service, you are missing my point.
A product or service is simply ONE way your core capabilities or competitive advantages is EXPRESSED.
If you get wedded to how your competitive advantage is CURRENTLY expressed, then you miss out on
all the opportunities for how your competitive advantage COULD be expressed.
Once you think this way, the next, more practical step, is to ask HOW these competitive advantages
could be re-packaged to provide a different type of value (and perhaps to a different kind of customer)
that is in better ALIGNMENT with the current economy vs. the way those advantages are currently expressed.
This is the essence of being more strategic about your business and the environment you operate in.
To Your Profits,
-Victor Cheng
*****
Victor Cheng is revenue growth adviser to owners of professional services and online
business within $1 million – $25 million in sales.
As a former McKinsey consultant and the author of four books, he has been featured as an
expert commentator by Fox, Time magazine, Inc magazine, Fortune Small Business, and The Wall Street Journal.
He publishes an email newsletter on revenue growth for owners of high growth business.
To subscribe to Victor Cheng’s E-Letter please visit: http://www.askvictor.com