Sustaining GrowthHosted by GrowFL & FL-CANApril 10, 2013
Contact               Justin Reger, LLR Partners                jreger@llrpartners.com                     215-717-2900   ...
Agenda1. LLR Partners Overview2. Growth Inhibitors3. Overcoming Growth Inhibitors4. Sustainable Growth Model5. Value Accel...
LLR OverviewConfidential          4
LLR Overview•      Founded in 1999 by trusted advisors to middle-                          Investment Criteria       marke...
LLR Sector Focus     Business Services               Consumer & Education               Financial Services             Hea...
Growth InhibitorsConfidential               7
The Dreaded S-Curve               Revenue                         Expected Performance                         Actual Perf...
The Need for Innovation               Revenue                         New Product Innovation                              ...
Apple Illustration160.0140.0120.0100.0 80.0 60.0 40.0 20.0    -        2001   2002   2003   2004   2005     2006     2007 ...
Growth Inhibitors• Market         — Is there a market? Is it ready? Is it large enough?• Product         — What is the val...
Overcoming Growth InhibitorsConfidential                          12
Ways to Overcome InhibitorsMarket          1.    Define landscape of new growth initiatives   &            2.    Assess ma...
1. Mapping New Growth Initiatives                                            Thought Leadership                           ...
2. Assessing Markets & Product DevelopmentNote: Numbers indicate priority for the segment capability                      ...
3. Positioning the Offering  • Positioning of Company, Platform, Suites & Services  • Define the offering’s value proposit...
4. Integrate Go-To-Market Functions  • The objective is to establish a repetitive methodology for selling and    implement...
5. Solution Sell Methodology & VBP•      Adherence to Solution Sell Methodology•      Establish positioning and value prop...
6. Sales Plays & Account Engagement  • Always position suite and new offerings first  • Study and perfect each sales play ...
7. Partner Programs                 Integrated License Sales                            Service Practices                 ...
8. Productivity & Scaling Models  • Productivity Guidelines                     • Scaling Guidelines               — Multi...
9. Customer Satisfaction & References  • Customer satisfaction aligned to incentives  • Measure, measure, measure  • Respo...
10. Joint Demand Gen & Forecasting Visibility  • Joint lead generation, pipelines, PS backlog & forecasting  • Three major...
11. Talent Management  • Train to Company GTM model through Company University               — Technical training on the o...
12. Culture of Excellence  • Set the tone at the top of the Company  • Every employee working to close opportunities  • Sa...
Sustainable Growth ModelConfidential                      26
Effectively PlanAnnual Operating Plan (AOP)                                                 3-Year Strategic Plan         ...
Set Strategic Goals  1. Bookings Growth > 40%               — Critical driver to growth               — Strong client acce...
Manage by Metrics                                         Industry   Company ABC                                          ...
Structure of Sustainable Growth Company                                                               Vision  Corporate   ...
Investor Value CreationConfidential                     31
The Value Added InvestorA. “We love to roll up our sleeves and work side-by-side with our   portfolio companies for the lo...
Investor Resources                                        Sector                                      Experience          ...
Value Accelerators                                                                          Exit                          ...
“We Help Build a World Class Board”       Don’t    • Stacking the board with a bunch of investor types       Settle   • Ju...
“We Provide Strategic Insight”       Don’t    • A sounding board       Settle   • A mandate rather than a dialogue: “Here ...
“We Can Make Introductions to Customers & Partners”       Don’t                • A network of companies that can provide m...
“We Assist with Improving Operational Efficiency”       Don’t    • Monthly/quarterly reporting calls       Settle   • More...
“We Can Source Talent”       Don’t    • Minimal incremental value: “Meet Bob, he runs a search firm”       Settle   • Unil...
“We Can Help with Acquisitions”       Don’t    • Pledge to provide or help secure incremental capital       Settle   • Bas...
“We Optimize Exit Value”       Don’t                • We have successfully exited X number of companies       Settle      ...
Questions               Justin Reger, LLR Partners                jreger@llrpartners.com                     215-717-2900 ...
Upcoming SlideShare
Loading in...5
×

Sustaining Growth: Common challenges for growth companies and how to overcome them

1,990

Published on

Entrepreneurs face a unique set of challenges at each stage of growth. This presentation identifies the common roadblocks to scaling a business and shares advice from LLR Partners' growth experts on how to overcome them. Learn what challenges to expect and how to adjust your business plan to meet evolving needs for capital, sales growth, human capital and more. These slides were originally presented as a webinar with GrowFL, the Florida Economic Gardening Institute, on April 10, 2013.

Published in: Business, Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,990
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Transcript of "Sustaining Growth: Common challenges for growth companies and how to overcome them"

  1. 1. Sustaining GrowthHosted by GrowFL & FL-CANApril 10, 2013
  2. 2. Contact Justin Reger, LLR Partners jreger@llrpartners.com 215-717-2900 www.llrpartners.com Twitter: @LLRPartnersConfidential 2
  3. 3. Agenda1. LLR Partners Overview2. Growth Inhibitors3. Overcoming Growth Inhibitors4. Sustainable Growth Model5. Value Acceleration from InvestorsConfidential 3
  4. 4. LLR OverviewConfidential 4
  5. 5. LLR Overview• Founded in 1999 by trusted advisors to middle- Investment Criteria market growth companies in the Mid-Atlantic region Revenues $15MM to $250MM seeking to: — Share in the risk/reward of high growth companies Growth 10%+ — Provide local businesses access to known and trusted capital providers EBITDA $0 to $50MM — Bring a user-friendly, customer service orientation to Investment Size $20MM to $100MM private equity Management Vision & alignment• Grown into a national provider of late-stage growth capital with deep domain expertise Market $500MM+ & growth• Maintained core values: Model Differentiated, scalable, & sustainable — Invest in growth Situations where we can — Align with management LLR Experience add value — Treat companies like clients Confidential 5
  6. 6. LLR Sector Focus Business Services Consumer & Education Financial Services Healthcare Services Software & IT Services• Business Process Outsourcing • Multi-unit Businesses • Financial Technology & • Information Management • Enterprise Software• Professional Services to • Internet & Catalog Retail Service Providers • Revenue Cycle Management • Application Software Niche Markets • Multiline & Specialty Retail • Specialty Finance • Practice Management • Systems Software• Government Services • Diversified Services • Software • Outpatient Services • Infrastructure• Fixed Asset Management • Durables & Beverages • Security • Data Analytics & Informatics • Perpetual License and SaaS• Marketing Services & • Household Products • Alternative Payments • Diagnostics & Monitoring Models Technology • Childcare • Broker / Dealers & Trading • Distribution • Managed / IT Services• Data Analytics • K-12 Education • Capital Markets Technology • Disease & Benefits • Solutions Providers• Human Capital Management • Post-Secondary Education • Data & Analytics Management • Data Service Providers• HR Outsourcing • Education Technology • Asset Managers • Pharmacy Benefit • Technology-Enabled Business• Transportation & Logistics • Training • Insurance Brokerage Management Services• Information Services • TPA & Service Providers • Alternative Site CareConfidential 6
  7. 7. Growth InhibitorsConfidential 7
  8. 8. The Dreaded S-Curve Revenue Expected Performance Actual Performance TimeConfidential 8
  9. 9. The Need for Innovation Revenue New Product Innovation TimeConfidential 9
  10. 10. Apple Illustration160.0140.0120.0100.0 80.0 60.0 40.0 20.0 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 iPad iPhone iTunes iPod Laptops DesktopsConfidential 10
  11. 11. Growth Inhibitors• Market — Is there a market? Is it ready? Is it large enough?• Product — What is the value proposition? What is the positioning?• Model — Is it sustainable? Is it sufficiently profitable? Is it scalable?• Talent — Is the team complementary? Are they on the same page? Do you focus on culture?• Capital — Do you need it? If so, what forms and from whom?Confidential 11
  12. 12. Overcoming Growth InhibitorsConfidential 12
  13. 13. Ways to Overcome InhibitorsMarket 1. Define landscape of new growth initiatives & 2. Assess market needs vs. product capabilities vs. gaps vs. investment requirementsProduct 3. Effective positioning, value prop/ROI, messaging & collateral 4. Integrate GTM: Marketing, Sales and Services 5. Adhere to solution sell methodology & value-based pricing 6. Adhere to sales plays and account engagement processesModel 7. Develop effective partner programs for leverage, validation & new business 8. Manage to productivity & scaling models 9. Strive for customer satisfaction and passionate references 10. Build joint demand generation & forecasting visibility 11. Enhance talent managementTalent 12. Develop a culture of excellence and same page leadership Confidential 13
  14. 14. 1. Mapping New Growth Initiatives Thought Leadership Platform Suites New Value-Based Pricing Industry Adapters Expand our Offerings Max Client Opp Practices Branded SVS Suite Sells Expert Centers Cross Sell/Up Sell Premium Support Horiz/Vert Services Expand the Suite Expand Expand Current New Industries Expand Industries SaaS & Mid-Market Current Offerings EMEA Expand APG Geo(s) SA Current New Expand our ReachConfidential 14
  15. 15. 2. Assessing Markets & Product DevelopmentNote: Numbers indicate priority for the segment capability Leader Competitive Baseline Marginal TBDIndustrySegmentMarket Stage Mature Market Developing Market Potential Market Potential MarketCategory Fit High High Medium MediumProduct 1Product 2Product 3Product 4Product 5Product 6 Confidential 15
  16. 16. 3. Positioning the Offering • Positioning of Company, Platform, Suites & Services • Define the offering’s value proposition, compelling events and ROI • Develop effective messaging for decision maker • Develop collateral for client facing teams • Working with market analystsConfidential 16
  17. 17. 4. Integrate Go-To-Market Functions • The objective is to establish a repetitive methodology for selling and implementing solutions in the shortest timeframe possible, while gaining passionate references — Marketing to position the company/offering, build market awareness, push leads into the sales process and gain references — Sales to represent the company, capture market share and develop demand at account level — Services to scope minimum go-live solution requirements, implement the solution and maintain the solution • These interdependent processes must be jointly managed to shared objectives/processesConfidential 17
  18. 18. 5. Solution Sell Methodology & VBP• Adherence to Solution Sell Methodology• Establish positioning and value propositions early in the sales process — Focus on entire solution: License, Professional Services and M&S — Use of BVA Process — Establish pricing after providing our value propositions tied to the ROI• Manage scope of SOW early in the sales process — Project manage to initial SOW schedule, gain customer satisfaction and reference• Hold service pricing at tiered skill levels based on offering domain knowledge• Define value of premium supportConfidential 18
  19. 19. 6. Sales Plays & Account Engagement • Always position suite and new offerings first • Study and perfect each sales play • Find entry point and minimum solutions but add rationale/terms for full suite • Explore and profile the full account opportunity through various engagements: Business Owners, Divisions, Future Initiatives • Record, document, track in CRM systemConfidential 19
  20. 20. 7. Partner Programs Integrated License Sales Service Practices In In Process No Process Yes No Yes1.Strategic Fit Established 1.Strategic Fit Established2. Incremental Value Prop. 2. Incremental Value Prop.3. Joint Solutions Defined 3. Joint Solutions Defined4. Executive Sponsorship 4. Executive Sponsorship5. Business Model Defined 5. Business Model Defined6. Joint Business Objectives 6. Joint Business Objectives7. Joint GTM Plan 7. Joint GTM Plan8. Deployment Partner 8. Deployment Partner9. Resell ABC Solutions 9. Resell ABC Solutions10. Joint Sales Engagements 10. Joint Sales Engagements Confidential 20
  21. 21. 8. Productivity & Scaling Models • Productivity Guidelines • Scaling Guidelines — Multiple offerings — Align reps to a coverage model — ASPs — Number of accounts per rep — New vs. existing — Building pipelines of sales talent — Average bookings per rep per — Company University for on- quarter boarding talent — Bookings to license revenue — Partners for leverage conversion — Expense to revenue and DCM — Shorter sales cyclesConfidential 21
  22. 22. 9. Customer Satisfaction & References • Customer satisfaction aligned to incentives • Measure, measure, measure • Responsiveness to escalation processes — 360 Program • Levels of references — Event speaker, white paper, press, verbal, etc.Confidential 22
  23. 23. 10. Joint Demand Gen & Forecasting Visibility • Joint lead generation, pipelines, PS backlog & forecasting • Three major sources of lead generation — 40% Marketing, 40 % Sales, 20% Partners • Pipeline coverage supporting bookings plan — 4.5x qualified lead coverage for R12 — 3.0x, 4.0x, 5.0x & 6.0x progressively by quarter — Marketing targeting new leads of 400 leads/mo, Sales of xxx SQL/mo • Marketing campaign mix/multiple contacts to grow market share • Metrics and actions to improve funnel yields • Forecasting accuracy within +/- 10%Confidential 23
  24. 24. 11. Talent Management • Train to Company GTM model through Company University — Technical training on the offerings — Business training on the positioning, value props, messaging, BVA — Solution sell and support methodology training — Sales plays by segment — Role of partners by segment, client size • Evolve to specialization by segment and industry • Add staff as clear opportunities developConfidential 24
  25. 25. 12. Culture of Excellence • Set the tone at the top of the Company • Every employee working to close opportunities • Same page leadership • Assure cross-functional engagement processes are clear and efficient • Assure our incentive plans are aligned to strategic goals • Implement best practices program across functions • Continuous learningConfidential 25
  26. 26. Sustainable Growth ModelConfidential 26
  27. 27. Effectively PlanAnnual Operating Plan (AOP) 3-Year Strategic Plan Full P&L, BS, CF AOP Kick Off Key Initiatives Strategic AOP Annual Interlocked Plans Planning Tied to 3-year Strategic Plan Additional Directed at Business Meeting Strategic Opportunities Business Objectives Cross-Functional Plan Firm Update 3-Year Interlocking Plans Base Business Plan Initial Business Fall Plan Revenue Planning Analysis Plan Approval Assumptions Brainstorming Confidential 27
  28. 28. Set Strategic Goals 1. Bookings Growth > 40% — Critical driver to growth — Strong client acceptance, retention, momentum 2. 15-30% Profitability — Continuous improvement towards objective 3. Mission Critical Enterprise Solutions — Define and lead market — Recognized branded solutions 4. Superior Client Experiences — Passionate references 5. Innovative Culture — Where career development and growth are pervasiveConfidential 28
  29. 29. Manage by Metrics Industry Company ABC Ranges Target Bookings Growth >40% Revenue Growth >20% GM 65-85% Licenses 95-99% Pro Services 30-50% Maintenance & Support 80-90% Development 15-20% Sales 20-25% OpEx Marketing 5-8% G&A 8-10% Total OpEx 50-65% Operating Margin 15-30%Confidential 29
  30. 30. Structure of Sustainable Growth Company Vision Corporate Corporate Objectives and Supporting Business/Functional Models G&A Capability and Differentiation: Finance, Legal, IT, HR Management Processes for Growth Planning & Same-Page Leadership Business Management: Product Management, Product Marketing, Corporate Strategy Bus Mgmt Strategy / Market Driven Requirements Three Year Business Plan, Branding, Portfolio Management Cross-Functional Interlocking Product Lifecycle Management Process Operational Excellence Cross-Functional Operational Excellence, BP/CI , Enterprise Solution Product Facing Customer Facing Program Development Testing Deployment Marketing Sales Pro Services Support MgmtConfidential 30
  31. 31. Investor Value CreationConfidential 31
  32. 32. The Value Added InvestorA. “We love to roll up our sleeves and work side-by-side with our portfolio companies for the long haul.”B. “We work with management teams to implement strategic and operating initiatives to build long-term value.”C. “We are active investors who take a proactive approach to working with our portfolio companies.”D. “We work as a team to support the management of our portfolio companies in a variety of ways.”Confidential 32
  33. 33. Investor Resources Sector Experience Best Lenders Practices Service Providers Company Portfolio Operating Consultants Partners Advisory BoardConfidential 33
  34. 34. Value Accelerators Exit Acquisitions Talent ManagementValue Operational Improvements Customers & Partners Strategic Planning Board of Directors Time Confidential 34
  35. 35. “We Help Build a World Class Board” Don’t • Stacking the board with a bunch of investor types Settle • Just a foundational board providing basic oversight and compliance For Get • Independent directors with direct operating experience in Excited complementary functional areas By • Active involvement beyond quarterly meetings • What is the role of the Board? Ask • How active is the Board? Questions • What profile do you envision for board members?Confidential 35
  36. 36. “We Provide Strategic Insight” Don’t • A sounding board Settle • A mandate rather than a dialogue: “Here is your three-year strategic For plan, now go execute” Get • Collaborative strategic planning sessions that you and your team Excited own, with an independent facilitator By • Playbooks and frameworks to help as a guide, but application that is left to you and your team • What typically happens post-closing? Ask • Can you share a prior 100-day plan? Questions • What are your preliminary thoughts on avenues for growth? • What are the backgrounds of the investors/advisors?Confidential 36
  37. 37. “We Can Make Introductions to Customers & Partners” Don’t • A network of companies that can provide meaningful business value Settle For Get • Portfolio of prospective customers and/or partners Excited • Thoughtful partner development plan By • Deep relationships with channel partners / potential buyers • Are other portfolio companies potential customers and/or partners? Ask • What does the broader portfolio partner ecosystem look like? Questions • What is the firm’s history with driving business through its network?Confidential 37
  38. 38. “We Assist with Improving Operational Efficiency” Don’t • Monthly/quarterly reporting calls Settle • More mandates: “You must implement these processes and For systems” Get • Roadmaps by each functional area from prior successes Excited • Best practices sharing among portfolio – informal and formal By • Specific project examples from other portfolio companies Ask • We are challenged by X; what has been your experience? Questions • How much interaction occurs within the portfolio?Confidential 38
  39. 39. “We Can Source Talent” Don’t • Minimal incremental value: “Meet Bob, he runs a search firm” Settle • Unilateral hiring decisions: “Meet Joe, your new head of sales” For Get • Deep bench of operating talent in multiple functional areas Excited • Relationships and experience with multiple search firms across By multiple functions, geographies, experience levels • Dedicated director of talent leveraged by the portfolio • Is there someone on your staff dedicated to helping the portfolio Ask build talent management plans? Questions • I have holes in my management team; do you have access to talent who can fill them?Confidential 39
  40. 40. “We Can Help with Acquisitions” Don’t • Pledge to provide or help secure incremental capital Settle • Basic deal experience For • Thoughtful, collaborative approach: “Here’s an initial acquisition Get target list, let’s talk about what makes sense for your growth plan” Excited • An outsourced M&A department By • Previous buy-and-build experience and proven playbooks • What are your thoughts on an acquisition strategy? Ask • Do you have dedicated resources to support our acquisition strategy? Questions • How much experience do you have with buy-and-builds and integrations?Confidential 40
  41. 41. “We Optimize Exit Value” Don’t • We have successfully exited X number of companies Settle For Get • Thoughtful view on logical buyers and existing relationships into them Excited • Flexible strategy that will expand and evolve your exit options By • Management input on exit timing (partnership approach) • Who have you sold prior portfolio companies to? Ask • Do you have regular dialogues with strategic buyers? Questions • What is your investment horizon? • Walk me through sub-optimal outcomesConfidential 41
  42. 42. Questions Justin Reger, LLR Partners jreger@llrpartners.com 215-717-2900 www.llrpartners.com Twitter: @LLRPartnersConfidential 42

×