incredible things happen when you focus on growth
We combine the ambition and vision of business leaders with our deep expertise to develop a practical strategy to get the business where it needs to be.
Each step an achievable action. The right level of involvement depending on your needs. Access to hands-on expertise where it will have most impact.
working with actus
more support
We take your success seriously and will be there with you to make it happen
more progress
We look for better, smarter ways to move your business and our industry forward
more action
We believe in clear, actionable plans that can fix issues and create momentum
more clarity
We are precise and direct – making each step clear and outputs tangible
putting shape to your ambitions
Our tried-and-tested Business Growth Programme is the foundation of how we work with businesses – creating clear direction, outcomes and accountability for everyone involved
Understand your business
Align on your future
Build your
plan
Refine your proposition
Boost new business
Improve financial performance
Create powerful teams
Solutions designed around you
With our combined experience and in-depth knowledge, we’ll tailor the solutions and advice you need to build success for your business and maximise returns for shareholders.
Our clients work with actus for a clear plan to drive and manage your business growth and strategies that will increase the profitability and asset value of your business.
Dan Egerton
Partner
+44 (0)7879 845 845
Skype. dan_egerton
Dan believes that by improving the way teams work together and creating a high performing team is the most effective way to deliver against strategy and increase long-term value. Whether operational change, strategic direction or hands-on support are needed, Dan's expertise and experience across diverse sectors and businesses means he is able to break down barriers to an organisations' growth and profitability.
see more of our network
insights
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
insights
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Talk ain't cheap. It's expensive – and destructive
Companies often confuse talking with doing.
They think that talking about doing something is the same as doing it. That planning is the same as doing. That giving presentations is the same as doing. That making reports is the same as doing. Or even that making a decision to do something is the same as doing it.
All these errors occur with alarming regularity in companies today.
Mistaking talk for action is no simple error - talk can drive out action. Studies into the way meetings work show that negative people are perceived as smarter than positive people. In other words, that being critical is a sign of higher intelligence.
You see this attitude in business all the time. The fastest way for me to seem smart is to cut you down. You come up with an idea, and I come up with a thousand reasons why that idea won't work.
Everyone now sees you as dumb and me as smart — and we've created an environment where no one wants to come up with ideas.
7 questions to ask when developing your organisational design
Businesses are dynamic systems. And like all systems, they work best when their components are aligned and working smoothly together. For many businesses, organic growth, opportunistic client wins and the necessary focus on clients often creates a structure of convenience rather than one optimised for effective delivery. It’s important then, to review this structure objectively and decide if it’s fit for purpose or in need of change.
So, when developing your organisation's structure, ask yourself these seven questions:
1. Does this help me achieve my vision? Referring back to your business vision and mission statement regularly will allow you stay consistent with the changes you want to make. It’ll also help to assure you that you’re heading in the right direction.
2. What’s best for the business? A useful exercise is to review your structure around what the business needs rather than who's in it.
3. Does this align with the culture and values of the business? Sometimes change just needs to happen. However, getting people on board with changes is easier if they see that developments are consistent with what the business stands for.
4. What do our clients want? Take time to understand how your clients buy from you and what their journey through your business involves for them. This will help you develop closer relations with clients and provide for their current and future needs.
5. What type of service do I want to deliver? Build your organisational structure around the type of service you’re planning to deliver. If you deliver multiple services, think about how you can structure them to work smoothly together.
6. Is my structure helping me deliver more profitability? Make sure your structure allows you to deliver your services efficiently, with the right level of resourcing to maintain good margins.
7. Would I be able to scale the business quickly? If you win a new client or develop a new service offering, your structure will need to allow for rapid growth. It will also need to be resilient enough to stand up under pressure.
Any changes you make need to fit with your existing business systems. Alternatively, you can modify your systems, such as HR processes, to accommodate the changes. Plan change carefully to minimise disruption. By going through a systematic process, the logic behind the changes will be clearer. This will also make it easier for you to move to your new structure while keeping up with the day-to-day running of the business.
Managing for profit
All too often, good revenue or sales performance fails to translate to the bottom line.
I recently gave a talk, Managing for Profit, at Kingston Smith in London W1. It was a practical session to provide insights into why some businesses achieve good profits year on year, and the importance of viewing profit as an objective, not a consequence.
To manage for profit you need a profit plan which runs over the whole business. You need to establish what is practical and possible for the business in a given year. It should be challenging to management but not excessively optimistic.
There are six key elements to a good profit plan:
1. Make performance a key responsibility. The responsibility for generating profit has to be taken across the business. Different people will come at it from different perspectives, so there needs to be ownership at the top but also down the business.
2. Understand how you charge. To understand where profit is made (or lost) your rate card should reflect the full operating costs of the business. You need to set clear utilisation targets and track against them.
3. Tightly control resource management. The phasing of revenue and people costs must be matched as consistently as possible. Importantly, project management should not be an ad-hoc activity.
4. Set clear new business objectives. Businesses need a clear new business model with strategies and tactical plans for both existing clients and new prospects. Consider both reactive and proactive initiatives.
5. Measure revenue confidence. Conduct account reviews each month. This will make your forecasting more accurate. It will make account leaders responsible for the projections they’ve provided in prior months.
6. Regular performance reporting. Businesses should measure both revenue activity and operating performance regularly. Develop a clear dashboard that consists of the metrics and KPIs needed to run the business. Measure and communicate performance regularly and clearly.
It’s important that a profit plan is not just a document. It’s a culture and mindset where every action and decision is considered in the context of its impact on profit.
Maximise the value of your business Part 1 – Business value: what it is and how it’s determined
Why are some companies are more valuable than others when they all have access to the same talent, resources, clients and knowledge? It’s a big question, so we’re going to tackle it in an eight-part blog series. Over the next few weeks, we’ll look at exactly value is, what drives it - and how you can maximise it.
Would you buy your business? To focus your mind on the value of your business, imagine for a moment that you want to sell it and put yourself in your potential buyers’ shoes. To you, your business is the sum total of your hard work and dedication. It probably represents many a late night, some big personal sacrifices and no small amount of risk.
Very little of which will be of interest to your hardheaded business buyers. What they’re looking for are real commercial assets with clear profit potential.
V = P x M
When it comes to putting a figure on the value a business – especially agencies - the most commonly used formula is: value = profit x multiple
Profit is your business’s historic financial performance. The multiple is its future earning potential.
Typically, most business owners see increased sales and improved margins as the way to raise the value of their companies. They’re focusing on the profit side of the equation.
However, when we work with clients who are looking to sell a business (and by definition maximise its value), we focus more on the multiple side of the equation. As you’ll discover throughout this blog series, driving the multiple is a far more effective way to increase business value.
Timing
Timing is also a factor. If you’re looking at your business in terms of its eventual sale value, you’ll want to move at the peak of its profit/multiple potential. Selling too early could mean selling yourself short. Wait too long, on the other hand, and you may not get the value you were expecting. I remember working with a business that had received an offer, yet decided to play the waiting game. Then the market crashed. The offer was withdrawn, costing the seller around £25 million.
Another consideration is the size of your business. If it gets too big, it could become too expensive or difficult to integrate for many buyers. While, on the surface, a bigger business may appear more valuable, it could narrow the field in terms of potential buyers.
External factors can also influence the value of your business at any given time. Market forces, exchange rates and pending government legislation can affect your profits depending on the products or services your business provides.
A formal strategy that systematically prepares your business for optimum growth at the right moment will help you get this balance right. Vision, purpose, value drivers, risk management, an understanding of your potential buyers’ priorities and your personal goals are the basis of this strategy - along with a plan to make things happen.
This will, of course, sound like mere common sense, possibly even obvious, to many of you. However, it’s amazing how often entrepreneurs and business leaders, when focused on driving value for their clients, overlook the needs of their own businesses.
In Part 2 of this series, we’ll look at the importance of your business’s vision and the benefits of a clear plan that all your stakeholders can buy into.
In the meantime, to talk about growing your business, call me, Dan Egerton on 07879 845845, 020 8133 1845 or drop me an email.
Maximise the value of your business Part 2 – Building a vision for your business
In Part 1 of this series, we looked at how we define and measure value in a business. In this blog, we’ll look at the importance of your business’s vision. Or put another way, why your business exists and what its purpose is.
This is relevant as too often business owners lose sight of the purpose of their organisation – they forget why they started it in the first place. Day-to-day concerns and priorities start to take up disproportionate executive time, pushing strategy, goals and long-term thinking down the pecking order. It’s vital to identify and stay mindful of what you and your business stand for. Your vision and purpose will anchor your business and create clarity around your ambitions. They will act as your stake in the ground around which all your stakeholders, internal and external, can unite. They’ll also attract people who share your values to do business with - and work for - you.
In my experience, companies that define their why in this way always realise the highest possible value.
In Part 1, I used the hypothetical scenario of the prospective sale of your business as a way to focus the mind on the building blocks of value. It’s useful to think like a buyer at this stage too as, while the sale of your business should not be its vision, it is a possible outcome of having a clear vision and strategy in place.
Defining the vision and purpose is of your business means asking big questions, which can be challenging to answer. Therefore, we break it down into four key areas which, when considered together, will help you arrive at your vision and purpose.
1 What do your customers value?
How do they evaluate and measure the quality and usefulness of your products and services? Understanding your target audience’s needs and how potential customers compare you to alternative providers will give you greater clarity around your purpose. Also, consider how you would like your customers to describe and position you.
2 What are your rivals doing?
Do you know what your competitors are up to? The more you understand and appreciate their activity, the more effectively you’ll be able to use your knowledge and experience to leapfrog them.
3 What are the aspirations of the shareholders?
Often, the shareholders of a business are at different life stages and have differing aspirations. Take time to discuss and understand what your co-shareholders’ perceptions of value are and what they personally want from the business. To really succeed, the vision of the business needs to be aligned to the vision of the shareholders. So often, this alignment is missing and this can have a huge detrimental impact on the business.
4 What are you best at?
It's said there’s no such thing as a new idea - just new ways of bringing existing ideas together. So, don’t always try to reinvent the wheel. Instead, build on what you can be better than anyone else at. Think about the skills, resources and knowledge you have in your business and how you can leverage those to your advantage.
Having answered these questions and determined one or possibly multiple visions for the business, you need to put it into context by reconciling your answers against four further questions:
-
what are the potential rewards of pursuing the chosen strategy?
-
how much effort will be needed to deliver it?
-
do you have the resources and capabilities, both human and capital, to deliver it?
Finally, you’ll need to assess the level of risk involved at every stage and how that tallies with your appetite for personal and business risk.
Considering the questions above, and with all this knowledge at your disposal, you’re now well placed to articulate a clear vison and purpose for your business. However, it’s all very well having a strategy, but without a clear plan to deliver it, it’ll have very little value. So, in a later blog in this series we’re going to look at how you can turn knowledge into action in your organisation.
Coming up, we’ll be exploring the eight value drivers – these are the areas of focus in your business that will maximise the M (multiple) in our V = P x M equation. They are:
-
finance
-
quality of income
-
people and culture
-
shareholders
-
operations
-
clients
-
positioning and offer
-
new business and marketing
In the meantime, to talk about growing your business, call me, Dan Egerton on 07879 845845, 020 8133 1845 or drop me an email.
Looking to sell your business? Think like a buyer
According to recent research, for every 100 businesses that seek a buyer, only ten manage to successfully sell and maximise their value. Worse, an abortive sale process could cost up to £100,000, not to mention the hidden costs of a distracted management team. That said, hundreds of companies change hands every year and, while I’d be cautious about the claimed multiples, many of these businesses do realise their true value.
So, how can you seize this once-in-a-lifetime opportunity and avoid the pitfalls that scupper 90% of business sales?
Sunshine Marketing – a case study
A couple of years ago, the owner of a successful marketing agency – I’ll call it Sunshine Marketing - came to me.
“Dan,” he said, “I’ve been building this agency for 20 years. It’s a great business, but I'm now I’m tired of the long hours. I’ve decided to sell. Also, I’m about to make a down payment on a yacht in the Caribbean. It will be ready in six months. Can you help me sell the business by then?”
I said, “Sure, let me have a look under the bonnet.”
We sat down and assessed the 80 factors that influence how valuable a business is. While it looked like Sunshine Marketing was making a good profit, it wasn’t sustainable. The agency’s biggest client, for example, accounted for 15 per cent of turnover, yet 50 percent of its profits. The owner was under-investing in the business and doing all the work himself - even cleaning the toilets to save money.
I quickly realised that Sunshine Marketing was in the 90 percent of companies that don't sell. However, I also knew there was something unique about this business and that we could turn it around. I explained to my new client that to maximise the value of his business, he had to think about it from a buyer’s perspective. And, buyers want an investment that minimises their risk while maximising their returns. So it's all about risk management.
For marketing service companies, buyers typically manage risk through this simple formula:
V = P x M, where Value = Profit x Multiple
"P” represents the company’s historical financial performance while “M” is its future earning potential and its associated risk.
While from the buyers perspective it’s just a way to manage risk, for the business owner, the formula represents the culmination of your hard work and dedication to your business. It represents all those late nights, the risks you’ve taken, the sacrifices you’ve made and, importantly, the expectations of what the business would deliver to you and your family in the form of future financial security. Therefore, to prepare a business for sale, you need to focus on factors that will drive the multiple of the business, as this enhances value more than factors that focus on increasing profits alone. And you need to see it in purely financial and commercial terms, not as the product of years of hard work, blood, sweat and tears.
You have to take the emotions out of it. So, working with Sunshine Marketing, we put a plan together that over the next 18 months, transformed the business, creating some exceptional opportunities to grow the team and the clients. We did this by focusing on the 5 key areas that maximise the value of a business:
1. Selling the story, not the business
It’s important to show a buyer whyyou’re in business as well as whatyour business achieves. This is because it demonstrates a vision for the business’s future. It also enables you and a prospective buyer to assess whether there’s a cultural fit – which could prove critical if the deal involves an earn-out period.
Your story should also include a clear reason for selling. Buyers are all too familiar with the standard "the business would now benefit from being part of a larger entity to capitalise on identified and significant growth opportunities"line, so it pays to be more upfront than less.
2. A history of investing in growth
Underinvesting to maximise profits doesn’t work. Any serious buyer will see right through it. Remember, they’re more interested in your future profits than your current accounts. However, consider carefully what you invest in. Concentrate on areas that will increase future revenue, improve margins and fix the single points of failure in the business.
3. Reducing the number of single points of failure
What could make a buyer nervous about your business?Generally speaking, over-dependence on anything represents a risk. Here are a few examples:
Clients
-
No client should represent more than 20% of your profit.
-
Change of control clauses in client contracts could cause major issues from a legal perspective - I’ve seen deals collapse as a result of this.
People
-
As a business owner, your single greatest responsibility is to assemble great talent - including your replacement.
-
A risk-conscious buyer will want to see a strong team that’s in it for the long term.
At Sunshine Marketing, we incentivised the team with share options and bonuses so that we were all driving in the right direction.
Financial systems
-
Use financial data to make informed decisions about the business’s future.
-
Make sure these decisions will stand up to due diligence.
4. Improve revenue confidence
Historical performance and current profit are obviously important, but a buyer is acquiring your forward revenue streams. This means you need to demonstrate revenue confidence.
For example, the greater portion of your company’s revenue that is recurring and stable, the more desirable your company will be to prospective buyers. Avoid becoming dependent on the day rate trap by productising your services so they’re sold on value, not time. Look too, to develop multiple revenue streams. The more of these you have, the less affected your business will be by the failure of any single service. Investing in new business and organic growth is also key, as is getting your team to understand that improving revenue confidence is part of their job description. Remember, buyers will pay a premium for businesses that can show predictable earnings for the future.
After 18 months of hard work on these first four areas, Sunshine Marketing received an offer, valuing it at £8 million. But guess what? By now, the owner and management team were enjoying life so much, they decided not to sell, but to stay on and keep growing the business instead! The owner bought that yacht and, having appointing a managing director, even has time to sail in it a couple of times a year.
By making Sunshine Marketing saleable and getting the management passionate again, we also achieved the 5th and perhaps most critical factor:
5. Sell on your own terms
Nothing destroys value more than desperation. Selling your business shouldn’t be a strategy or the solution to a problem. It should be an option that a well-developed and executed business plan presents you with.
Not being in a rush is one of the most powerful messages you can give potential buyers about your confidence in your business. In the end, Sunshine Marketing’s owner decided not to sell. However, by putting himself in a buyer’s shoes and adopting a business disposal mindset, he maximised the value of his business, rediscovered his joy of building his company and made time to go sailing in the Caribbean.
Selling your business is not a strategy - it’s an option created by having a well-developed and executed business plan that focuses on growth. Why? Because incredible things happen when you focus on growth.
The three fundamentals of growth
Incredible things happen when teams focus on growth. But it doesn’t happen by itself and it’s not always easy to achieve. Only 4% of businesses reach the £1 million turnover mark, and only 10% of those - that’s 0.4% of all businesses - get to £10 million. In our ever-changing world, many businesses struggle to keep up while others change so fast, they crash and burn. Take Sunshine Marketing (not the real name). This firm almost doubled in size in just 12 months. It all got rather chaotic, so it had to put new systems and processes in place. The trouble was, this slowed the growth down.
Sunshine Marketing had encountered the stable/dynamic paradox. Furthermore, getting things done became a lot harder. There were now lots of meetings and new layers of management, but nothing was actually happening.
Sunshine Marketing was failing to turn knowledge into action. Finally, frustrations were brewing up among the team and the board became dysfunctional. Sunshine Marketing had neglected teamwork as a strategy. What happened at Sunshine Marketing highlights perfectly the three big challenges associated with achieving sustainable growth.
1. Solving the stable/dynamic paradox
This is about balancing a stable backbone with the dynamism you need to drive your business forward. Start-ups are chaotic but fast-paced. It's exciting and scary in equal measure because things are always happing and change is a way of life. But you can get trapped and lose your way. Every day is then exhausting, the chaos is overwhelming and you lose the confidence and know-how to make the necessary changes.
This opens the door to bureaucracy. Form filling and box-ticking start slowing things down even more as authorisation processes bedevil every decision. If the business is agile, however, change can happen quickly and effectively. It's exciting, but also organised, secure and flexible. Information flows freely and leads to action at agile companies. And, because they don’t fear change, they’re able to rethink regularly and redesign their structures, governance mechanisms, and processes as necessary.
In this way, the agile company finds a balance between stability and dynamism.
2. Turning knowledge into action
As a business grows, it can become less effective at turning knowledge into action. This is because doing means learning - and learning involves mistakes. So if you’re serious about making the transition from knowing to doing, build a forgiveness framework — a tolerance for error and failure — into your culture. A company that demands smart ideas and rapid implementation has to be willing to cut its people some slack.
Corporate memory is another factor in a ‘doing’ culture. Sometimes "how we've alwaysdone it" is interchangeable with "the right way to do it." The root of this is fear. We don't want to make mistakes, so we avoid risk by doing things as they've always been done. There’s a circular logic to this: "We do what we do because it's the best thing to do. And it's the best thing to do because it's what we've always done." Also, don’t confuse talking, planning, presenting, reporting or making decisions with doing. These are errors that too many companies make far too often.
3. Making teamwork a strategic priority
When I was a kid, my dad used to come home from work frustrated by his company. He disliked the way he was treated there and how dysfunctional things were. I didn’t understand what this meant at the time, but that changed when I started working with companies on strategy, finance and other operational issues.
I quickly realised that nothing improved unless we:
-
assessed how the business was structured
-
improved the way decisions were made
-
put teamwork at the heart of strategy
I now know that teamwork is a strategic priority. In fact, it’s the only true competitive advantage you have.
The good news is teamwork is not complicated. However it does call for courage, commitment and a lot of work. You’ll need patience too as it takes time to see the results.
When we work with businesses to develop teamwork, we use a model developed by Patrick Lencioni called The Five Behaviours of a Cohesive Team.
The behaviours are:
Trust. When team members trust one another on an emotional level, they’re comfortable about discussing their vulnerabilities, weaknesses, mistakes, fears, and behaviours. We call this vulnerability-based trust rather than predictability-based trust as it enables colleagues to engage in unfiltered, constructive debate.
Conflict. With trust established, teams are free to speak openly and discuss conflicting views, ideas and interpretations. Gone is the tendency to agree with the loudest voice. In its place is respect for every individual’s viewpoint and a focus on reaching the best decisions.
Commitment. Team members are more likely to commit to a decision if their input has been considered than if not. Far better to hear every opinion and explore every avenue than to deny people the chance to put their case.
Accountability. When people are fully committed to a decision and performance standards, they’ll hold their colleagues accountable for sticking to them. And rather than looking to the team leader to reinforce accountability, they’ll work things through among themselves.
Results. Teams that embrace the four behaviours above are highly likely to put the goals of the collective above their own agendas. This is the holy grail of teamwork.
When you build teamwork into your business philosophy, you’ll soon discover what a powerful weapon it is. Get it right and it changes everything - from how fulfilled your people are, through how delighted your customers are to how profitable your business is.
Now growth does not just happen - growth must be anticipated and planned for.
So every day, if you are asking yourself:
-
can I make my business more agile?
-
are we turning knowledge into action?
-
am I investing enough in teamwork?
Then every day you’re taking a step closer to a more successful, more satisfying and more valuable business.
contact
Improve business performance, exceed your aspirations and build exceptional value.
Contact us today.