Emerging Market Entry and the Catch 22's

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Do you have a plan in place for your New Market entry? Success comes to those who plan for it! This presentation asks crucial questions for every stage of your business: the start-up, the growth phase and the exit phase.

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  • Emerging Market Entry and the Catch 22's

    1. 1. The Catch 22’s in Business Global Markets Business Coaching
    2. 2. How to overcome the Catch-22s of growing your business 2Global Markets Business Coaching
    3. 3. Contents o The
problem:
 approximately
90
%
of
new
market
 entries
fail o Introducing
the
Catch‐22s
 of
growing
a
business o Overcoming
the
Catch‐22s
 of
entering
a
new
market 3Global Markets Business Coaching
    4. 4. The Problem 90% of new market entries fail 4Global Markets Business Coaching
    5. 5. The Problem o The
vast
majority
of
new
market
entries
won’t
 survive
to
their
5th
year
and
of
these
most
won’t
 con@nue
un@l
their
10th
year.
 o Overall,
about
90%
of
these
businesses
fail.
 o This
represents
a
waste
of
@me,
money
and
 talent
and
missed
opportunity. o People
who
set
up
their
own
business
tend
to
be
 well‐mo@vated
and
usually
have
talent
or
 exper@se
in
their
field,
so
why
is
the
failure
rate
 so
high?
 5Global Markets Business Coaching
    6. 6. The Reason o There
are
2
main
reasons
why
businesses
 cease
trading 1. The
owner(s)
decide
to
give
up 2. The
business
runs
out
of
cash o A
cash
flow
problem
is
usually
the
result
of
an
 unforeseen
cash
requirement.
 o Why
is
it
unforeseen?
Because: – It
was
due
to
unpredictable
circumstances Or – You
just
didn’t
look
properly 6Global Markets Business Coaching
    7. 7. Where are you now? o Do
you
have
a
good
business
proposi@on
 or
business
idea?
 o Does
your
business
or
business
idea
have
 the
poten@al
to
reach
your
expecta@ons? o Is
your
business
paying
you
more
than
 you
could
achieve
working
for
someone
 else? o What
would
someone
else
pay
for
your
 business
today? 7Global Markets Business Coaching
    8. 8. What is your goal? o How
much
would
you
like
your
business
 to
be
worth
in
what
@mescale?
 o Is
your
business
growing
at
the
required
 rate
to
meet
this
goal? 8Global Markets Business Coaching
    9. 9. Why will you succeed? o You
need
sufficient
Customers,
Capacity
and
 Cash
to
achieve
the
reward
you
desire
 without
undue
risk.
 o A
good
Business
Development
Plan
will
show
 you
the
quan@@es
of
each
that
you
require
at
 every
stage
of
your
growth. o It
will
also
generate
focus,
mo@va@on,
 confidence
and
success. 9Global Markets Business Coaching
    10. 10. The Catch 22’s of business o To
be
successful,
there
are
3
Catch‐22s
that
you
 have
to
overcome: 
 o The
Entry
Catch‐22:
Achieving
first
base o The
Growth
Catch‐22:
Balancing
growth o The
Exit
Catch‐22:
Financing
ambi6on 10Global Markets Business Coaching
    11. 11. Introducing the Catch-22s of growing a business 11Global Markets Business Coaching
    12. 12. Introducing the Catch 22’s 12Global Markets Business Coaching
    13. 13. Business growth curve 13Global Markets Business Coaching
    14. 14. Business impediments o A
bad
debt
–
even
if
it’s
only
delayed,
it
s@ll
impacts
your
 cashflow
 o A
system
failure
–
even
if
you’re
backed
up,
you’ll
be
impeded
 un@l
it’s
fixed o A
break‐in
–
even
if
you’re
insured,
you’ll
be
delayed
un@l
you
 replace
and
reconfigure
new
computers
or
equipment o A
product
failure
–
you
may
not
have
manufactured
it,
but
if
 you
supplied
it,
you’ll
s@ll
have
to
deal
with
it o An
injury
or
sickness
–
if
you
employ
two
people
and
one
 gets
sick
you
lose
a
massive
50%
of
your
capacity o A
landlord
unexpectedly
increases
your
rent
–
if
you’re
 barely
making
a
profit
the
addi@onal
cost
will
soon
become
 insurmountable. 14Global Markets Business Coaching
    15. 15. Growth impediments o Growth
requires
more
customers
meaning
 more
promo@onal
effort o Extra
capacity
has
to
be
financed
un@l
it
can
 be
fully
u@lized
 o Extra
capacity
has
to
be
supported,
which
 increases
overheads o Extra
capacity
has
to
be
trained,
which
 impacts
exis@ng
capacity o Recruitment
mistakes
can
upset
the
balance
 and
reduce
efficiency 15Global Markets Business Coaching
    16. 16. Stability Steps 16Global Markets Business Coaching
    17. 17. The Entry Catch-22 To grow to the first Funding is only offered Stability Step requires after you’ve achieved the funding first Stability StepGlobal Markets Business Coaching
    18. 18. Hockey Stick Profile 18Global Markets Business Coaching
    19. 19. Growth Gradient The Steeper the growth gradient the deeper the cash requirement 19Global Markets Business Coaching
    20. 20. Out of Balance 20Global Markets Business Coaching
    21. 21. The ‘Saw Tooth’ Profile 21Global Markets Business Coaching
    22. 22. The Growth Catch-22 Your level of funding Your future earnings dictates your growth define the level of funding gradient and future worth investing earnings 22Global Markets Business Coaching
    23. 23. Balancing Ambition and Funding 23Global Markets Business Coaching
    24. 24. The Exit Catch-22 Your desired exit The level of funding valuation requires a increases the exit level of funding valuation you require 24Global Markets Business Coaching
    25. 25. Overcoming the Catch-22s of growing a business 25Global Markets Business Coaching
    26. 26. Business Planning o Business
planning
is
the
process
of
selec@ng
 where
your
business
could
be
in
and
in
what
 @mescale. o The
business
plan
has
to
detail
the
path
most
 likely
to
get
you
there. o One
of
the
most
significant
outcomes
of
 business
planning
is
to
es@mate
your
cash
 requirement
at
each
point
along
the
chosen
 path.
And
then: 1. Decide
how
you
will
fund
it 2. Predict
and
mi@gate
for
any
poten@al
threats 26Global Markets Business Coaching
    27. 27. Business Planning Process o Model
it
–
Create
a
business
model
that
links
the
3
‘C’s
 Customers,
Capacity
and
Cash.
At
this
stage
there
is
no
 scale
to
the
plan. o Balance
it
–
Balance
the
plan
to
the
scale
of
ambi@on
 and
funding
and
generate
a
growth
gradient
that
won’t
 lead
to
the
saw‐tooth
profile. o Sense
check
it
–
Check
the
scale
of
ambi@on
makes
 sense
compared
with
the
size
of
the
market
and
conduct
 a
sensi@vity
analysis o Produce
a
business
development
plan 27Global Markets Business Coaching
    28. 28. Model It o Link
Customers
to
Capacity
–
For
a
Service‐based
 business
capacity
refers
to
Resource
Management,
for
a
 Product‐based
business
it
refers
to
Stock
Management. o Link
Customers
to
Cash
‘in’
–
The
level
of
cash
 received
depends
on
the
number
of
customers
and
what
 they
buy,
how
frequently
they
buy
and
for
how
long
they
 con@nue
to
buy. o Link
Customer
Acquisi@on
to
Cash
‘out’
–
The
level
 of
Promo@ons
to
be
funded
depends
on
the
customer
 numbers
required
to
meet
the
ambi@ons
of
the
business,
 which
depends
on
access
to
funding. o Link
Capacity
to
Cash
‘out’
–
The
level
of
capacity
 defines
the
infrastructure
and
the
level
of
funding
required. 28Global Markets Business Coaching
    29. 29. Balance It o Balance
the
plan
to
the
scale
of
ambi@on
and
 funding
capability.
Specify
an
Ambi@on
Aim(s)
 and
Time
Target
to
generate
a
Growth
 Gradient. o Process: – Align
customer
acquisi@on
and
the
Growth
 Gradient – Match
overheads
to
the
required
capacity – Explore
op@ons
for
funding
the
cumula@ve
cash
 requirement – Repeat
the
process
un@l
ambi@on
and
funding
are
 in
balance 29Global Markets Business Coaching
    30. 30. Balancing ambition and funding 30Global Markets Business Coaching
    31. 31. Sense Check It o Check
the
scale
of
ambi@on
makes
sense
 compared
with
the
scale
of
the
market.
 Conduct
a
Market
Analysis
and
a
Sensi@vity
 Analysis. o Process: – Analyze
market
share
over
the
5‐year
forecast
 – Iden@fy
key
success
factors – Set
each
factor
to
worst
case
and
review – Set
each
factor
to
best
case
and
review 31Global Markets Business Coaching
    32. 32. Overcoming the Entry Catch-22 o Strategy
to
overcome
the
Entry
Catch‐22: Customers
–
use
highly
effec@ve,
but
low‐cost
customer
 acquisi@on
and
reten@on
ini@a@ves Capacity
–
focus
on
minimizing
in‐house
capacity
even
at
 the
expense
of
profit.
 o Don’t
spend
valuable
cash
on
anything
that
isn’t
 essen@al
and
outsource
the
rest.
 o Reduce
the
cash
requirement
for
growth. o Show
that
the
funding
requested
will
get
you
to
a
 point
of
stability. 32Global Markets Business Coaching
    33. 33. Overcoming the Growth Catch-22 o Growth
strategy
–
Plan
the
overall
growth
strategy
like
an
 assent
on
a
mountain.
Work
out
what
you
plan
to
achieve
for
 each
phase
of
the
assent
–
all
the
way
to
the
summit
of
 ambi@on.
 o Balance
ambi@on
and
funding
–
Find
a
balance
 between
ambi@on
and
funding
for
each
growth
phase.
Define
 the
Ambi@on
Aim,
Time
Target
and
Growth
Gradient
with
a
cash
 requirement
that
can
be
funded. o Growth
phases
–
The
heart
model
tends
to
heel
over
as
 you
add
chunks
of
capacity.
The
more
it
heels
over
the
more
 cash
it
will
be
hemorrhaging
and
the
more
likely
it
will
be
fatal
 for
the
business.
Focus
on
cash
during
a
growth
phase. o Stability
Steps
–
As
you
arrive
at
a
stability
step,
switch
to
 focusing
on
profit. 33Global Markets Business Coaching
    34. 34. Overcoming the Exit Catch-22 o To
maximize
the
Business
Valua@on
you
need
to
 maximize
two
elements: Growth
in
the
preceding
years Profitability o This
leads
us
to
certain
posi@ons
on
the
business
 growth
curve.
 o Scalable
–
Go
for
an
investor
who
brings
contacts
that
 can
put
the
business
on
a
steeper
growth
gradient
than
 cash
alone. o Not
scalable
–
Use
cash
flow
management
and
other
 funding
op@ons
to
reduce
the
level
of
cash
 requirement
and
borrowing. 34Global Markets Business Coaching
    35. 35. Business Planning Service o Business
Strategy
&
Planning
Service: Our
Business
Coaches
will
model
your
business
and
 generate
a
balanced
Business
Plan.
 Our
Business
Coaches
will
create
your
Business
 Plan
document
to
present
all
the
figures
including
 projec@ons
for
Profit
&
Loss,
Cashflow,
Balance
 sheets
and
Business
Value. o Ongoing
Business
Planning
Service
–
A
Business
 Plan
needs
to
be
dynamic
and
responsive,
so
we’ll
offer
to
come
 back
every
3
months
to
review
progress,
revise
the
plan
and
 maintain
momentum. 35Global Markets Business Coaching
    36. 36. Thank you for your interest enquiries@globalmarketsadvisor.com www.globalmarketscoaching.com 36Global Markets Business Coaching

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