10 Ways to Build a Profitable Company - globaladvisors.biz/inc-feed/20141013/10-ways-to-build-a-profitable-company/ BY MICHAEL ROVNER What goes into building a globally recognized company? Teamwork, commitment and humour are not enough. When Euan Rellie left Schroders in 1996 to start his own M & A firm, Business Development Asia, he invested his life savings of $75,000--and took an 80% pay cut. Today, BDA has offices in New York, London, Bahrain, and 7 locations in Asia with a run rate approaching $30 million. Rellie knew by 27, he didnt want to work for a big organization. What he didnt know was how long it would take. BDA closed two deals in the first three-four year period. It took 10 years for us to get anywhere, says Rellie, adding, Just about enough people hired us that we could imagine a successful future. Across industries, when youre paid for your advice, a track record and some grey hair go a long way toward credibility. From five employees in the first three years to staff of 90 today, hes picked up a few pointers. 1. It takes a team. My business partners have qualities I lack, and were not afraid to challenge each other on strategy, nor on tactics and budgets, nor on expenses. Actually, Id rather be the boss myself. Still, without them, I doubt the business would have survived let alone thrived. 2. Be decisive. Weve been under-capitalized throughout, but Ive never been scared. I have pushed my colleagues to take risks they were reluctant to take, in hiring, in the way we present ourselves, and on investing in growth. Ive been resolute in fighting to keep some of our smaller offices open even through local downturns and dry patches. This year, eleven of our twelve offices will be significantly profitable, and the twelfth will break even. 3. Be patient, and tenacious. In 1996, I thought Id be rich or broke within three years. The truth has been more prosaic: steady growth, and not in a straight line. Sometimes along the way, I have pushed too hard, and over-extended myself financially. Again, my partners have helped out when I needed them. But I have never come close to giving up. It took us twelve years to build a US$10m revenue company, and then six more to triple that. 4. Be fully committed. I invested $75,000, my life savings, for my initial 50% stake in the start-up, eighteen years ago. I took an 80% pay cut to start the company. Today I own less than 25% of the company, and all our senior team own stakes in the business. I still get that deal heat, the excitement from winning a mandate, or from securing a high-paying buyer for a business. The numbers are just bigger these days. 5. Dont be afraid to promote yourself and your company. We faked it until we made it. We wrote a lot of press releases. We sponsored a few conferences. Three years ago, we identified a fantastic alliance partner, the Chicago investment bank William Blair, and we sold them a 10% stake in our company. We bought lunch for a few journalists. And we cold-called a lot of clients. As an entrepreneur, you must write your own press, and believe it too. Be the ball. 6. Be mildly provocative. I tend towards irreverence. I tell our clients that we offer best-in-class, blue chip investment banking advice, but in a down-to-earth, practical way. Of course, they often ignore us, but our clients--be they Fortune 500 companies or private equity firms--always like us to give them candid advice, and to push them to act decisively. I use humour liberally to try to diffuse tense situations. It usually works, but every now and then, it backfires.
Posted on: Mon, 13 Oct 2014 14:32:16 +0000
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