As part of the EY sales conference “The Sales Edge” I was privileged to be invited to sit on a panel hosted by Ernst & Young’s Mark Twine, National Markets Business Development Leader.
By studying the markets and related indices, EY know that more than 50% of today’s market leaders will be replaced within five years. EY have been working with high growth companies around the world for over 30 years – they were with Google when they were five people; they helped Jeff Bezos pack books in his garage in the early days of Amazon.
In this session we will explore how today’s entrepreneurs grow their business? What is their definition of being commercial? Does it differ depending on the stage of evolution of their business? Does margin matter to them? What can we learn from their approach?
I was part of a panel three entrepreneurs who shared their views and experience with us. Each of our businesses are at a different stage of evolution.
Gideon Valkin is CEO of Friendly Score, a B2B solution that increases conversion and approval rates for consumer lenders through social media credit scoring. It aims to be the first international social media credit bureau servicing financial institutions. The company is barely a year old.
Richard Gahagan CEO of Adam Recruitment (WeAreAdam.com), specialist Headhunter in Digital, Marketing, Business Development, Pursuits and HR across all industry sectors. The business is now nine years old, has survived a recession and is now scaling for growth across three locations in the UK and Internationally.
James Hibbert founded Dress2Kill in 1999 after a bad experience with a customised suit tailor and his business has gone from strength to strength ever since. (An unnamed member of the EY senior team quoted at the event that one of James’ suits made her husband look 50% more attractive…he is expecting a sales spike on the back of this fantastic recommendation!)
Discussion and Questions.
Commerciality, Scaling a business, when is margin key? Sector variances? Golden Nuggets? Types of investment and views on Crowdfunding?
We were asked to define our view on commerciality and how that has developed and evolved since launch. Gideon has a fabulous business model which is very much looking at fixing a major problem and developing a solution that will have value in the sector, rather than margin or profit. James talked around how important cash flow and profit are. My key points referred to the phases of launch, recession and scaling all of which required profit to protect and re-invest in the business. The business could only scale with investment. My take-away from this discussion was James’ point that the owners’ and leaders’ appetite for risk can also be a factor at these stages and depending on the market this needs to be factored in by using external advice or consultancy.
We were asked for our key advice for people starting in business. The two key points across the whole panel were to appoint yourself a mentor or Non Exec, someone who takes you and the business beyond the skills and comfort zones of the leaders and challenge the current status quo. The second point we all agreed on is that every business at every stage of growth constantly needs great people, no matter how big or small the team is.
What did I learn from the amazing team at EY?
Firstly, they have great people and how warm a welcome we were given.
There were many useful and insightful points on the panel which I can take away, and the last part of the session discussed finance and funding options. James & I have either re-invested profit for growth or borrowed through traditional banks without the need to give away external equity. Gideon has a business which is so cutting edge that investors and crowd funding are not just a good option financially but a great way of collaborating with the community of his customers, partners and suppliers. We all agreed that whether you believe Crowd Funding today is good or bad, it is very likely going to change radically and need to become more regulated as there are many funders who operate with potentially too little accountability to investors at present and the sector is still in relative infancy.
My final take away from the day is the realisation that good people are the essence of every business at every stage of evolution. There are markets so vast with such future potential that some businesses can be valued at billions before they make a profit. If your risk profile is lower or in a more traditional market, margin and cash flow become vital to sustain the appetite for growth and hire and retain great people.