Are you in the right business? A reality check. 
Many consultants are happy to tell their clients exactly what they want to hear. But at Growth Path, we specialize in telling our clients what they need to hear. Even when it makes for awkward, lip-biting conversations.

Tough Love
A few years ago, we found ourselves working on an engagement where, after doing the research, we realized our client was in the wrong business. Neither happy nor motivated, they were simply going through the motions.

“Sam” billed himself as an efficiency coach and retained Growth Path to help him expand his business but, in truth, Sam specialized in helping his clients with email and didn’t go beyond that. In speaking with Sam’s clients, we realized that Sam had a great opportunity: His clients wanted more services and they wanted to buy them from Sam. We wrote a plan for him to build those services into his offerings, but there was a hitch: Sam had no interest in providing them. We were at an impasse.

Tough situations call for honest conversations
Telling Sam what he needed to hear wasn’t easy, but it was the right thing to do. But a surprising thing happened: Sam admitted that his heart wasn’t in it. Turned out he’d always wanted to open a restaurant on the West coast. We could have told Sam what he was expecting to hear. We could have continued to work with him even knowing that he was miserable. But Sam engaged us for good advice and that’s what we delivered. “You’re in the wrong business,” we said. “Go do what you love. Go do it now.” Within six months, Sam moved to Vancouver Island to open a restaurant and follow his dream.

Reality Check
The bottom line is that, if you start a business, your responsibility is building that business. It’s not a question of what you want to do; it’s a question of what your business needs you to do. Not everybody is interested in running their own business. They may love to write or paint or build cupboards, but running a business requires that we go beyond our specific trades or hobbies, and do what our business requires whether that means making calls, attending networking events, or working with contractors.

“I’m not a morning person, but my business is.” – Charmaine Denton, Denmor Associates

On a positive note, we recently worked with a local photographer who wanted to expand his business. When he met with Growth Path, he admitted that all he really wanted to do was take pictures. “Then why run your own business?” we asked. “Why not simply work for Sears where you can take baby pictures all day?” This conversation opened the photographer’s eyes to what he needed to do to: Expand his offerings, subcontract and market.

Our tough love placed him on a strategic path that has empowered him to double his business over the last 12 months.

When in Rome, do as the Romans

But what happens when Rome comes to America?

Breaking into foreign markets is tricky and moving ahead without knowing your new market often leads to costly missteps. That’s why the Italian Trade Commission (ITC) approached Growth Path. They wanted to help Italy’s forward-thinking security systems companies expand into America, but they needed a navigator.

Every solution requires a research trip to Venice

When it comes to foreign expansion, forewarned is forearmed so step one is always research. First Growth Path headed to Milan & Venice to attend trade shows, meet manufacturers and learn about the technology (it’s a hard job dear readers, but somebody has to do it.) We reluctantly returned to Canada to organize a focus group with North American security systems gurus, to review Italian product lines and give feedback.

The results shocked the ITC. The great opportunity they imagined was wishful thinking; Italian electronic systems had almost no application in North America.

1. The Italian security systems market is geared to retro-fitting those beautiful old buildings common in Europe. Perfect for smaller locations, they focused on preventing intrusion – similar to home alarm systems. Unfortunately, the newer buildings in North America rely heavily on card-based access systems that control entry.

2. Those few European buildings with access systems tend to use biometrics like fingerprints to verify identity. But biometrics scare North Americans – we have a tendency to think we’re being checked for criminal records when asked for fingerprints, so we’ve been slow to adopt the technology.

A stylish, Italian-made silver lining

Although there was little market for Italian electronic security systems in North America, Growth Path uncovered an even better opportunity: North America was the perfect market for stylish Italian-made security hardware. North Americans tend to design for function alone and the hardware is often clunky. Think of ugly metal window bars on a bank vs. beautiful wrought iron bars on older European buildings. On the other hand, Italians don’t design anything unless it adds esthetic value. This was a hugely desirable niche that only the Italians could fill.

A lucrative outcome

The ITC followed Growth Path’s plan and spent the next 12 months promoting Italian-made security hardware via trade missions, trade shows and advertising. Their work paid off and Italian hardware is now widely available. Growth Path saved the Italian Trade Commission a ton of money by identifying the right products to invest in and the right way to promote them, and the ITC’s work in this area influenced the entire industry.

If you’ve been reading our blog or subscribe to the Growth Path newsletter, you’ve probably heard the term ‘gateway product’ a lot. These are entry-level services that we use to build a relationship with a client and they work. One of Growth Path’s key gateway products is a business development plan.

Below is a case study about our work with MinePros, and what’s interesting is that our initial contract was simply to write a business development structure. But typical of gateway products, the relationship blossomed from there…

In Search of Focus
Brendan was concerned. As the head of MinePros, a three-person recruitment agency, Brendan was responsible for finding top-tier mining engineers and geoscientists for Canada’s mining industry. And while his company was certainly successful, Brendan worried that it wasn’t focused enough. He looked to Growth Path for help.

The Discovery Sessions
Growth Path’s first step was to talk to MinePros’ clients - Why did they use MinePros to recruit talent? Why Mine Pros over other recruitment agencies? At each company, the answer was clear: MinePros was valued because of its industry expertise, technical knowledge and excellent connections. In the niche of technical mining expertise, MinePros was king.

After MinePros understood its core value, it was able to develop services and marketing around it. Yet this discovery, while hugely important, was by no means the only one.

Changing Tactics
While researching, we found that recruiters operate using three distinct billing structures:
1. Retained search fees
2. Contingency fees
3. Deployment fees

Since its inception, MinePros worked exclusively for contingency fees, meaning that they were paid only if they found the right person. There was no cash upfront. This presented a challenge: Not only were they out of pocket if a search went south, but their cash flow was sporadic.

We suggested Brendan change tactics. With a deployment fee, Brendan would be paid upfront for a defined level of service and then a percentage of the new employee’s salary once the role was officially filled.

Brendan liked the idea, but he worried that his clients wouldn’t go for it. Wouldn’t they just look elsewhere if we started charging a deployment fee, he wondered?

The key was communicating the fee properly. When Brendan explained exactly what the deployment fee covered, for example, advertising and access to his targeted database – he discovered that his clients were supportive of the new billing structure. For such a valued expertise and service, it was worth it.

The outcome transformed MinesPros. Their ability to articulate their value proposition, focus on their niche within a niche, and maintain steady cash flow helped them to grow exponentially over the course of a year. Growth Path still meets with Brendan and his team once per month to hold him accountable to that original business development plan and make sure that the new marketing and billing structure continue to work for him.

What's It Really Worth?
At the age of 70, Jack came to us with a simple proposal: he wanted to retire. He had run his employee benefit plans company, John Chute & Associates (JCA), for over two decades and was looking to sell his business. Yet in spite of his and his company’s success, Jack was still worried. Could anyone possibly run the business without him? Were they specialized enough attract prospective buyers? They were important questions and they looked to Growth Path to solve them.

The First Step
Before we could help Jack solve his problems, we had to answer some of these basic questions. We arranged advisory meetings with six of Jack’s most devoted clients. What was it they saw in JCA? Why did they continue to patronize them instead of their much larger competitors? Turned out the answer was pretty simple: JCA was the foremost expert on the healthcare industry. They knew how to work with nurses, doctors, organized labor and local healthcare integration networks. Quite simply: in the world of healthcare benefits, JCA was king.

An RFP, An Opportunity
Even though JCA obtained roughly 80% of its business from the healthcare sector, they never marketed this as their expertise. They never properly articulated or marketed their true value. Fortunately, an opportunity came in the form of a major RFP. Before engaging Growth Path, JCA had a fairly archaic RFP response process - either: “Yes we do comply,” or “No we don’t.” Growth Path’s job was to create something far more thorough; a template that not only detailed the company’s proficiency in healthcare, but also articulated its true value. 40 pages and a great deal of work later, we had it.

Success
Three months after JCA started using the new RFP template; they received a call from a competitor and one of the biggest players in the industry. They wanted to buy JCA. The planned to expand their business into the healthcare sector and JCA, with their incredible and well-articulated experience in healthcare, was the most valuable organization in town. The key to both Jack’s and JCA’s success was in understanding the value to end-customers. Jack was trying to sell something without knowing why it was so valuable – just having the instinct that it was. We articulated that value, which JCA was able to reap.

How an Erotic Store Went from First Base to a Home Run
Sex games. Erotic lingerie. Furry handcuffs. Lovecraft, an erotic company “celebrating sexuality since 1972,” had two stores and lots of engaging merchandise.

But it also had a challenge: both its Mississauga and Yorkville stores struggled. Their one-size-fits-all approach to managing both stores simply wasn’t working.

By the time the owners approached Growth Path, they were frustrated. They felt they had tried everything but nothing had worked.

GETTING TO KNOW YOUR VISITORS BETTER
Before proposing a solution, first we had to understand the situation. That meant studying the unique demographics and sales figures of each store. What sold? Who was buying? For Lovecraft’s owners, the answers came as a revelation.

The Yorkville and Mississauga stores had radically different demographics.

The typical customer at the Yorkville location was a wealthy married woman over the age of 45. She was looking to enrich her relationship, add a little something to spice things up.

In keeping with this demographic, the sensual and erotic items - candles, lingerie, oils - tended to sell much better and customers were willing to pay a premium.

In Mississauga, the reverse was true. Instead of selling higher end accoutrements, they sold mid market costumes and toys.

Their customers, young married couples and single men of diverse ethnicity, preferred the explicit over the romantic. XXX videos sold well. Scented candles didn’t.

A SEXY SOLUTION
Growth Path implemented a sexy three-step solution (I think anything that turns a company around is sexy!):

• First, we restructured the inventories of each store to meet the demands of its particular demographic. This was a relatively painless process that increased efficiency and profitability, particularly at the Mississauga location.

• Second, we tweaked each store’s advertising to better target their customers.

For the Mississauga location, this meant more Mississauga-focused messaging and a greater emphasis on the array of products offered.

For the Yorkville location, this meant branding the store as classy and erotic by placing the right ads in the right publications. Less NOW Magazine. More Post City.

• Third, we got creative. In order to lure more customers to the Yorkville store, we began a quarterly exhibition of erotic art and photography.

It was the perfect excuse for buyers otherwise embarrassed to walk into a sex shop to visit. (They weren’t cruising for erotic toys - they were viewing art.) This bit of marketing ingenuity created a 15% increase in sales, while simultaneously broadening the customer base.

THE CLIMAX
The lesson from Lovecraft is simple: Know your customers. Who they are. What they buy. You might be surprised to learn that what works for one location won’t work for another. By strategically targeting your merchandise to the local demographics of each location, you’ll increase sales, enhance profitability and build a loyal customer base.