White-label it: Make it ‘YOU’ inside.

By David Steakley

This week’s insight comes from David Steakley, who has contributed several great posts to Berkonomics this year.  David is an active angel investor in Texas and is a former management consultant, where he obviously plied his trade well.  – Dave

Companies can strike it rich by finding an element of business operations which many companies need, but few have the capability or expertise to execute with excellence – and then aim to supply that element.  Sometimes this is called a white label strategy, because whitelabelyour customers offer your product as their own product, writing in their brand name on the blank label in your underlying offering.

But, more often, this is just the virtualization of what we used to call outsourcing.  On the web, not only does no one know much of who you are, but no one cares how you sourced your widgets.

Bazaarvoice, a company in Austin, Texas is a great example of this kind of operation.  To be quite frank, the first two or three times someone told me what they do, I couldn’t understand it.  My preconceived notions of the possible range of business models simply didn’t include this one.

[Email readers, continue here…]  Basically, the company created software for online forums.  Really, that’s a business?  Yep:  revenues of over $100 million per year with a market cap around $800 million.  The company identified an element of operations which almost every online retailer already has, or needs, but very few do well on their own.  Moreover, the company’s offerings allow the retailer to change a thing which may be seen as mostly a pain – into an engine for increasing sales, for sharpening the retailer’s value proposition, for catching and solving problems before they become real problems.  In short, the underlying value of that company is the old-fashioned underlying value of outsourcing (if there was one):  the outsourcer not only does it for you, the outsourcer shows you how to do it right, and does it at lower cost. 

Now listen to one of Bazaarvoice’s short pitches:  “Our industry- leading social commerce solutions capture & amplify user-generated content, driving the highest social media ROI, for the world’s largest brands.”  Forgive me, but I had no idea what that meant.

I heard another pitch recently, for a company which must have been unknowingly inspired by that other obscure pitch.  This one wants to supply product comparison mechanisms for online merchants.   You know, those bubble charts of products and features, by model?  Do you want zoom in your camera?  How much zoom?  How many pixels?  Thank god I had finally grasped Bazaarvoice;  otherwise I probably would have sent these guys packing.

There’s a lesson in this for business operators.  Look around your operations, and identify areas of cost which, as far as you can tell, do little or nothing to enhance the profitability of your operations – but, you must have them.  Can someone do it better than you, and at lower cost?   Have an open mind.  You’re used to outsourcing payroll, bookkeeping, and logistics.  Just for an exercise, see if you can identify someone to outsource absolutely everything in your business.

You have only so much management bandwidth.  It can only make you more effective – if you’re able to focus your attention on the things you’re best at doing – your core competency.

Posted in Growth! | 1 Comment

The five kinds of risk in building your business

If you could predict a crisis within your business before its occurrence, wouldn’t you move to prevent or reduce its impact?  Making such predictions is a skill that can be developed, and here’s one method of doing so.

There are five basic kinds of internal risks than a business faces over time. Of course, there are external risks that cannot be controlled or predicted, but can be planned for as well –

profit, loss and risk (buzzword crossword series)

.

natural disasters, sudden political or economic events that rattle the entire economy, and more.  That discussion is for a future time.  Here are risks you can address.

First, there is market risk.  Will the marketplace accept your product?  Is there a market for your class of product at all?  Market risk is constant and should be of greatest concern to any executive or entrepreneur.  Mitigating market risk is not easy.  Someone within your firm must be finely attuned to the changes in the market, including subtle signs from competitors.  If you are big enough to have a dedicated product manager, that person is a good candidate for this ongoing task, as is a marketing manager, who should be attuned to the changes in the environment.

[Email readers, continue here…]  Second is product risk.  Totally controllable within your organization, the quality and durability of your finished product should be at the top of someone’s job description.  Whether it is you or a quality control manager, someone must assure that the product or service you send out to the world will not fail to perform at least to the level of customer expectation, if not to delight those customers most likely to be critical.

Third is finance risk.  Too often the person you call your chief financial officer is trained in accounting, which is primarily a process of looking backward over events in the past.  A real CFO must be one to project and plan for the future as well, aware of the need for increased cash during times of growth or market disruption, and aware of the weekly challenges of shifting cash flow.  The worst thing a fragile, entrepreneurial business can endure is to run out of cash.  Not only is the enterprise threatened, but confidence is shaken among employees, suppliers, even customers. Competitors have a field day when hearing about cash problems at a company; and the rumors they pass on can reverberate for months or longer after the problem is solved.

Fourth is competitive risk, which consists of two separate risks. Do you have a significant barrier to entry to keep competitors from undermining your effort?  And does a competitor have a better story and product to compete effectively against your offering? Someone within your firm must be finely attuned to the changes in the subtle signs from competitors.  These include having a current knowledge of competitors’ hiring practices, pricing strategy, and more.

Fifth is execution risk, which is squarely on management to perform, to take the company to and beyond profitability. It is your job to oversee the constant gathering of information, efforts to mitigate these risks, and even to hold senior level planning meetings around analyzing data and asking “what if…” questions that bring out the doomsday scenarios that could hobble your company.   Once defined, the obvious next step is to role play responses to each challenge, or even to put in place preventative measures well in advance for each identified risk.

When one or several of these events hit you and your team, and they certainly will someday, you’ll be better prepared to respond quickly and with a more appropriate, planned response.  That will reduce the possibilities of suffering a catastrophe, and will more quickly calm the many stakeholders who have reason for concern, looking to you for assurances.

Why not plan a series of meetings with the appropriate members of your firm to discuss these challenges as you and they identify them, and prepare a plan for overcoming each?  The time it takes may well be the difference between survival and doom; or it may be the plan that distances you from your competition if events do occur in your mutual future.

Posted in Growth!, Hedging against downturns | 3 Comments

My story: Fail locally, one customer at a time.

By Frank Peters

Our guest insight this week is from Frank Peters, well-known in the angel and in the bicycle worlds for his podcasts and passion.  His personal story is full of lessons for us all. – Dave

We’ve all heard the modern day mantra: Fail Fast. It’s good advice; the theory being that entrepreneurs can discover the flaws in their business models sooner, make course corrections and move in a more favorable direction.

In my case as a young software entrepreneur, I had a different approach: Fail Locally, one customer at a time. Perhaps like many businesses, mine started out painfully slow; wage-wise, I think it was three years before I earned $30,000. For me I had few alternatives; wall_st_bull_0working for someone else had proved to be a frustrating experience. I became an entrepreneur by default. I was fortunate that I could write software and doubly fortunate that my despair at working for ‘the Man’ – and feeling compelled to strike out on my own – coincided with the dawn of the personal computer era.

[Email readers, continue here…]  I’ve often looked back and said that you didn’t have to be a genius at that time. You just had to be lucky, write reasonably good code and land in an industry with some legs, and of course, treat the customer well. Prior to bombing out of corporate life, I worked as a management consultant and at a very early age I was dealing with the presidents of very large companies. This would serve me very well as my product moved from individual clients to entire Wall Street firms licensing my code. But there was something else at work here.

I can’t imagine encouraging an entrepreneur to follow in my path, but for me, operating alone with no board of advisors, no business plan and no outside capital, I was making it up as I went. I look back and describe the early days as ‘selling software out of the trunk of my car’. I would write code all night then get in the car around noon each day to make my rounds. On the West Coast, where I started, the stock market closed at 1 pm and that’s when my customers wanted to see me.

I was fortunate that these individual customers were well healed; they had the money and were looking for an excuse to buy a computer. As I look back, I can remember so many times where I benefited from good luck. Who would’ve guessed that a day would come when a major Wall Street firm would make a strategic decision to open high profile offices across Southern California? How would they populate these new fancy offices? They would lure the best and the brightest away from their current employers with fat cash advances – enough for a new car, and a new computer. I was a beneficiary of this development. When one of my clients was recruited away from a user, and all his new officemates saw his computer, pretty soon I was invited into the new companies for all those ‘me, too’ sales.

Oh, how I tortured these early clients! Ours was a 2-man operation in those earliest of days; I knew nothing of quality assurance. It would not be unlikely at all that a major update to the software would break critical features that previously worked fine. Flaws like these could cripple my clients, causing them grief, lost productivity and worse, a loss of good will with their clients. Thankfully, these mini disasters occurred in small sizes. I could fix the bugs and hand-deliver the repairs before I infected more clients. In this way I learned a great deal. I would take the slings and arrows of my disappointed clients face to face. And I would learn customer service.

Years later, when news of my product spread to Wall Street and I had my first appointments in these corporate offices, I was well prepared. My earliest job experiences had placed me in similar hallowed places; I was not overwhelmed. At this point in the company’s life, I had developed a mature product used by thousands of happy individual clients who were clamoring for the home office to build interfaces to minimize their manual data entry. But maybe best of all, as we arrived in Manhattan to move my officer to the source, I arrived with a good reputation and, as I like to say, I hadn’t pissed off anybody on Wall Street.

From this point the company grew like wild fire. People liked the product and by buying a license for everyone in their firms, these Wall Street executives were rewarding their hard working sale force. It was hard to believe, but this was a new concept back in the days of ‘green screens’ that only offered market pricing data to the people who made all the money for the firm. We became as popular as the hoola hoop. We went from our largest-ever sale of 3 licenses at one time to a thousand. In ninety days we sold three major firms; and this would only be the beginning of our rapid growth. I look back today and muse, “No one ever asked us if we could deliver all that software.” And oh, did we struggle as we learned all over again how to provide customer service to these large and demanding new clients.

Could an entrepreneur follow this same business model today? I suppose that’s what limited releases are all about. But in our case, our test clients consumed us for our first nine years of existence – no one would advise a similar strategy today. We were lucky that we were able to learn so many painful lessons on a small and local scale. By the time a large opportunity came along, we were ready.

Posted in Growth!, Hedging against downturns | 3 Comments

Drive your recurring revenues.

This week, our guest post is by  David Steakley, a past President of the Houston Angel Network, and a reformed management consultant.  David is an active angel investor, and manages several angel funds in Texas. 

I have a positive fetish for recurring revenue. When I hear a company pitch a business model which I believe has the potential to acquire a customer once, and keep the customer paying for a multi-year period without further marketing expense, my ears perk up. Typical examples are software as a service (SaaS) models, or any kind of content-driven subscription model.

There are so many things to love about a company with this kind of subscription model. Especially for a provider of a virtual good or service, costs of goods sold do not scale with sales, as they do in the real world. In the virtual world, a much higher percentage of incremental revenue falls straight to the bottom line. In most businesses, you can look at Raising moneythe revenues all you want, and you can draw pretty pictures extrapolating the curve of revenue growth, but, usually, the reality is, the company needs to go out and sell the annual revenue all over again every single year.

With the right recurring revenue model, top line growth can really shoot the lights out. Each year, the company can commence with a reasonably predictable big portion of last year’s revenues already in the bag.

[Email readers, continue here…]  It requires special capabilities and expertise to really capitalize on a recurring revenue model, and a different way of measuring success for both executives and investors. Subscription businesses typically take longer to get to profitability, because costs of developing the product or service, and customer acquisition costs, are front-loaded, while revenue is back-loaded. By conventional measures of company performance, a recurring revenue company can appear to be struggling at first, but you have to know what measures are predictive for this kind of company.

The key calculation is the cost of customer acquisition, compared to the gross margin contribution of the customer. If an analysis of the gross margin on a new customer acquisition reveals that customer acquisition costs can be recouped in two years, you’re doing well. If you get back customer acquisition costs in one year, you’re doing great. This assumes reasonably low churn of 10% or less.

The crucial turning-point for a recurring revenue model with a potentially massive market is the moment when the acquisition model is sufficiently effective, refined, and repeatable, so you can blow it out and scale it up. If you’ve got a favorable payback period for customer acquisition, and you can repeatedly perform the acquisition model, then that is the moment to forget about profitability and spend like a crazy person by scaling up the sales machine.

When you go to sell the company, you’ll get paid based on the slope of the recurring revenue curve (up and to the right), and even if a company sale is not in your plan, you’ll be glad you sacrificed current profitability for the longer term, if you’ve picked the right moment to go big.

I’ve always thought Steve Case was the early genius of this kind of thinking. In the late 90s, you could have had a hard time picking up your mail without finding an AOL software connection CD in the mailbox. AOL spent about $300 million sending out those CDs, and at one point, half the world’s production of CDs had the AOL logo on them. The lifetime value of an AOL subscriber was about $350. Average customer acquisition cost was about $35. That extreme in postal spamming took AOL from an IPO market value of $70 million to a merger value of $150 billion when AOL was combined with Time Warner. Wow.

Recurring revenue companies have been changing hands in the last few years at four to six times’ annual recurring revenue. Steve Case’s Time-Warner bonanza of perfect timing may not be repeated any time soon, but the appetite for these kinds of companies is more robust than ever.

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Nail it; then scale it.

So your business has begun to take off. You’ve figured out your channels of distribution, pricing model and how to support your growing list of customers. Don’t be alarmed by this next statement. That’s relatively easy.

You can be the one to develop a product or service, promote it, and support it when you are a small operation. But what if you need to repeat the process of positioning, selling, and supporting your product ten thousand or more times as often as you do today?

growIt’s worth repeating my every three million dollar crisis insight. You will have recurring crises as you grow your business. These are predictable and usually arrive in the same recurring order, and often with every $3 million in additional annual gross profit from revenues as you grow.

[Email readers, continue here…] The first crisis is financial, funding the business, development, inventory, and marketing. The second crisis is organizational. At about the twenty employee level, the organization is too large for one person to handle internal operations, and a new level of management must be inserted between the founder and the existing team, causing communication and control issues that many founders have not experienced.

The third crisis is one of quality control. At about $6 million in revenue, there are so many new customers that product or service quality is stretched to the limit, and complaints about quality surface in quantities you never experienced previously.

Guess what? And, at about $9 million in annual revenue, the cycle repeats, with financial needs for additional working capital and money for growth churning to the top of the problem stack. And, as you grow, the same class of problems returns but with a larger scale and more urgent cry for attention – and more ruinous if not solved.

It is important – no it is urgent – that you solve these problems and know how to spot them coming in advance. To scale any company to a large size, you must know how to solve the problems of production, customer service, working capital needs and more in order to keep the company on the rails. The cost in lost efficiency, customer referrals, and corporate reputation is too high not to make this a priority for a growing business.
Many of the insights in this book and the BERKONOMICS series deal with the issues of scaling your business. As you feel more and more comfortable being able to scale each portion of the operation, you will be able to focus upon other areas of weakness, spreading the risk out and into a manageable range, rather than overwhelming you and your growing staff with their magnitude.

But wherever possible, it is best to nail down the processes and structure before and as you scale the business, not in emergency response to issues as they develop and grow to threaten the enterprise.

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Premature scaling kills businesses.

Venture capitalists sometimes make an error in directing their portfolio company CEOs to push resources to the limit and scale the business to immense size quickly, all to seize market share.  The logic in this is simple: once a company has market share, other issues can be sorted out to monetize the market, make the company profitable, scoop up wavering competitors, or even sell the company to a larger firm looking for a large customer base.

This form of thinking has been unusually true during the rise of social media, where Up_rightmarket share became the primary goal of a company, with revenues and profitability to follow later.  It was true for Amazon and other visionary companies that grabbed market share during the early Internet era.  But beware. Many, many companies accepting venture capital lost it all following this instruction.  VCs have a goal of creating extraordinary value for their investors.  Incremental profits from companies that later sell for three to five times their original value at the time of their investment may be considered great successes for founders but relative failures for VCs, who must hit for the fences with every early stage investment.

[Email readers continue here.]   I’ve been involved as a board member of two such businesses, where venture investors came aboard and pushed management to immediately scale the business without regard for profitability, and without much regard for infrastructure.  Both businesses scaled beyond what their market could absorb, and revenues did not build at nearly the rate of audience increase.  The cost of each exercise was dramatic, far beyond what a founder-entrepreneur would order to be spent when using his or her capital or reinvesting cash flow from operations.  Venture investors need large scale to make large exit valuations, or in many cases are not interested in maintaining marginal companies.  To state it again, what might be a success to angel investors and to founders could be only of marginal interest to a typical VC.

Scaling a business is an art as well as a science.  By definition, scaling requires the addition of fixed overhead, sometimes the kind you cannot shed easily, including leases for expanded space.  Experienced CEOs often make it a habit to scale as a result of demand, reducing risk and mating cost to growth in revenues.  Angel investors are more tolerant of this than VCs.   Typically, when you bring a VC onboard, you increase the risk, the reward, and the definition of the size for a successful exit.  Adding to this is the extra risk undertaken by premature scaling.  It is important for you to realize that there is a fair tradeoff in valuation between a company with less outside investment and a lower endgame sales price, and one that shoots for a much higher valuation to justify a higher amount of outside investment.

Posted in Growth!, Protecting the business | 5 Comments

5 Simple Steps to Executing the Plan

It is all about execution.  Waiting over a year to see results is too long, since your chance of mid-course correction is greatly reduced.  To make the point, Harvard’s Robert Kaplan believes that less than 10% of corporate strategies are effectively executed.  Ouch!

If that is true, we are tolerant bunch.  We carefully plan in long, dedicated sessions each year or so, then draw up a series of goals, strategies, tactics, objectives, targets, or whatever we want to name them.  We hold all-company meetings where possible, and departmental meetings to roll out the new plan.

We set individual objectives and rewards to match these goals.  Then we manage day-to-day routine execution, and periodically measure the results.  Sound familiar?  This is the startegy+4_smbfdescription of a well-managed process within what should be a well-managed company.

And yet, Kaplan is close to right, whether it’s 10% or 30%, it is a minority of strategies that are effectively executed.  Why?   Here is a list to use as a guide to better execution.

[Email readers, continue here…]  Make the plan simple to understand.  Once deployed down one or more levels in the organization, like the old game of telephone, the corporate plan begins to look less like the original as each department attempts to adopt it and create departmental objectives to conform.  A complex plan stacks the deck against all but those who created it at the top.

Put someone in charge of executing the plan. That may be you, but in some companies, that requires a dedicated individual tasked with removing roadblocks, measuring success, and reporting progress.

Provide feedback loops at each critical stage of execution.  If the plan calls for increased revenues, measure output and efficiency as well as revenues.  Look for leading, not lagging indicators of change.

Make sure you provide the resources necessary to hit the plan, including money, new hire authorizations, and above all, clear instruction and delegation form the top.

Listen to complaints, suggestions and warning signs.  Respond, so that people know you are serious about execution of the plan.  Modify what is not working.  Then pivot, when necessary, to scrap part of the plan, and then rewrite it in order to meet its objectives.

If a plan has realistic goals and if you are reasonably able to provide the resources necessary to complete the plan successfully, you are way ahead of that other 90%.

But if you toss a plan out to others to execute, don’t follow through until the end, fail to measure, or to provide needed resources, then you will deserve your fate.  So take heed.  If you go to the effort to plan, go to the effort to succeed.

Posted in Growth! | 2 Comments

Fish in the giant ocean – not in a shallow creek.

This is like a Hans Christian Anderson parable, but aimed at you and your business… There are big fish and small fish, potential customers, all swimming in the sea that is your potential marketplace.  You, the lonely fisherman, have to weave a net to catch your fish.  Should your net be large and bulky, requiring more effort and expense to weave?  Or should it be small and delicate, to catch those fish that would otherwise fall through the net?

The size of your market may well define the ultimate size of your dream.  You can be the fishbowl1most successful coffee house owner in a city of ten thousand, or the founding CEO of the largest chain of coffee shops on the continent.  Defining your market in a limiting way reduces the opportunity to exploit the larger potential that may be available to you.

If you attempt to create a manufacturing business where the total available market for your products is only $30 million, even success leading to a dominant share of the market would not allow your company to scale it to a size of great interest to investors.

[Email readers, continue here…]  This lesson is important.  Companies grow proportional to the size of the market, and success cannot turn a limited market opportunity into a grand enterprise.

When we investors look at a business plan, we look immediately to see if there is research to support the claim of a large enough market to expect the candidate company to grow into the size projected.  And we look to see if the size projected is large enough to interest us as investors, since that is directly proportional to the ultimate value of the company in a liquidity event.

To the point of the headline above, sometimes an entrepreneur claims that there is a large market, and attempts to make the case for growth into a grand scale company, sharing only a relatively small portion of that market.  If the market claimed to be of a large size has no current, fast growing competitors, we must guess at the accuracy of the claim – something very unscientific.  But if there are entrants already scaling, often we then can focus upon the differences and advantages our candidate entrepreneur brings to the market, a much more comfortable piece of work for the investors.

The size of your dream must be scaled to fit into the size of your marketplace.  Be sure you can back up your claim with some form of research, then work to perfect the differentiation you offer against the competition.

And if your market truly is large but of unknown size, and if there are no competitors growing in the market, you must work doubly hard to convince investors of your dream.  Yet, there are wonderful cases where entrepreneurs created and grew vast enterprises in new markets which could not be measured when their journey began.  Think of FedEx, AOL, Microsoft, Cisco Systems, Facebook, YouTube, and tens of other billion dollar or larger players in markets that did not exist or were in their infancy when those entrepreneurs cast their nets.

Posted in Growth! | 4 Comments

Money motivates.

What a title.  Of course money motivates.  But there is more to it then this.

Salaries or hourly wages must be within reasonable limits set by the industry and matched by the competition, both regionally and for the same job classification.  But more difficult is the sticky issue of employee incentive compensation.  I find that this is an area much more often the subject of a CEO phone call, a roundtable discussion, or a board compensation committee meeting.

There are many studies that can tell us how various industries reward employees for achievement above a base pay, or beyond expectation. And there are some industries money1where tools such as stock options are considered mandatory for a company to be competitive.  But how about listing the basics for designing an excellent incentive compensation program?  Here are several, gleaned from numerous companies and systems of compensation.

[Email readers, continue here…] First, be rule specific.  A bonus or commission that is granted after the fact, without a target plan or without objectives to meet, is surely appreciated, but does not often create an incentive to exceed, only an expectation of receipt again in the next period.  When a leader and a subordinate agree upon a list of achievements in advance, then good performance can be rewarded based upon a fair assessment of accomplishments against those achievements.  And if those goals are aligned with those of the overall corporation, everyone wins and the process can be repeated in subsequent periods.

Second, there should be a substantial carrot, or upside bonus for outstanding achievement.  A sales commission plan should reward a salesperson with a combination of salary and commission up to the expected level of performance, often called a quota.  Perhaps a part of that compensation plan should include a bonus upon achievement of quota, as a form of recognition and celebration.  Then, contrary to popular thinking, there should be an increasing reward for achievement above the expected number, beyond the list of agreed-upon incentives for non-commissioned employees.  For a salesperson, the commission percentage should increase above quota, and a second level of bonus available at some higher point.  Sometimes, a combination of revenue, gross profit and even operating income form the basis for individual and team rewards.

Next, some form of rewards should be designed to be immediate.  Rewarding a February achievement in December disconnects the reward from the event, reducing the effect of the reward itself.  If we believe that money does motivate, then we should reward positive behavior immediately to reinforce that behavior.

Finally, and perhaps most difficult to design, there must be protection against workarounds or from employees gaming the system.  Reward only gross revenues, and salespeople will push the limit of profitability, impacting the corporation but not their commissions.  Real estate agents are paid as a percentage of the sale, not upon its relationship to the asking price.  Sometimes, agents push their clients to accept low offers to assure a quick closing of a deal, since their participation percentage is only slightly affected by a price cut to close the deal quickly.

There are more insidious ways to game a compensation system.   Wall Street brokers helped to create the financial crisis by following a bonus system driven by quantity, not quality of trades.  Salespeople paid entirely upon closing a deal will care less about the subsequent completion of a complex, time-consuming transaction.  Support people paid based upon the number of tickets closed will rush to close tickets at the expense of quality service.   There must be thousands of such examples where poorly designed systems allow employees to achieve personal goals that are at odds with the best interest of the corporation or its customers.

So use these four items as a checklist as you create compensation plans for various levels and types of employees.  Rule specific; substantial upside bonus; immediate rewards; protection against working around the system.

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Protect your international traveling employees.

international_travelAs your company grows, you will probably have to make conclusions about traveling employees, and travel for yourself.  There are vast opportunities internationally that require careful planning to execute well.  One of the most critical decisions is how to enter a new country or region.  Most companies early in to the process do not have the resources to place people on the ground in foreign countries, so they make new relationships with distributors or dealers to represent them in the new areas.

As you begin your travels into new territories away from home, it is always wise to have a host to greet you from arrival through departure in each country that is new to you.  If you do not yet have any firm relationships in a country, develop some connection using your outreach channels before the first flight.  Even if you are going to start a series of interviews, you can have one candidate meet you at the airport and another later return you to the airport.  You should find this connection occurs automatically later as the relationships mature and you have either dealers or your own personnel within each territory.

[Email readers, continue here…]  The customs, laws and even the knowledge of safety dos and don’ts are critical elements in assuring your safety and that of your traveling employees.  It is also good business to learn local customs from locals.  Having a local contact to provide information to your home and your work is a relief to all, including yourself.

Then there is the question of creation of a regional office to cover multiple countries in a geographic area.  It is the next logical step toward creating corporate entities abroad.  And the regional manager hired to oversee multiple countries can act as country manager for his or her home country, often volunteering to travel with you to the various countries in the region.  That’s the best and safest choice for a next step toward becoming a true, international entity with offices in numerous countries as you grow.

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