Business
ENHANCEMENT.
It is not unusual for business owners to become frustrated when facing the challenges of launch, recovery, or growth. The ‘how-to-get-there-from-here’ process can be daunting. So too, is the task of starting over when an economic downturn has caused customers and suppliers to disappear. With sales volume and margins diminished, traditional management methods are often inadequate. But when trapped in this manner, what is the answer?
Then, there’s the ‘friendly banker’ issue. Once central banks changed their rules in response to the 2007-09 subprime lending crisis, difficulties emerged because the former, ‘friendlier’ bank models no longer fit. At one time, a more or less established enterprise could count on their local branch manager to provide financial help. Finding such support today would be unlikely. Therefore, small to midsize businesses (SMEs) are often referred to as the ‘missing middle’* meaning the enterprise is too large to qualify for a “micro-loan” (e.g., backed by a business owner’s home equity line) and too small for a conventional bank loan.
The way I understand it, the Bank for International Settlements, located in Basel, Switzerland, is a financial institution that serves all member-nation central banks. This houses what is called The Basel Committee on Banking Supervision.** Due to the subprime financial fiasco, selected executives of this body organized an ‘accord’ named Basel III. This group came up with recommendations to avoid yet another global catastrophe. As a result, bank policies were changed universally, redefining the rules applied to a local Bank’s commercial-loan customers.
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Although some of this occurred after the previous financial downturn (1981), chances of now finding a ‘friendly banker’ are remote. Where viability-based lending was once quite common, it no longer exists within conventional banking. Today’s bankers focus on a loan prospect’s asset coverage capabilities and their business’s historical financials. Unfortunately, providing five years of sound financial background becomes problematic when the markets that first created them have disappeared. Conversely, a new launch will not have any history with which to secure a bank loan.
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This brings about a shift towards equity capital. Unfortunately, be it ‘angel’ funds or venture capital, forecasted returns must be much higher than the average SME can generate. Typically, mediocre growth prospects or lack of liquidity will discourage even the most patient investor.
Focused on ‘viability-driven’ growth initiatives – a strategic must when seeking private financial support – Entrepreneurialize Opportunity Corp. – creates, structures and helps execute a wide variety of generally straightforward but effective solutions.
*A term accredited to Céline Kaufmann of the OECD Development Centre (The Organization for Economic
Co-operation & Development), Paris.
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** Source: https://www.investopedia.com/terms/b/baselcommittee.asp
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Case 1
Findex Purchasing & Allwest Builder Buying Group:
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This enterprise progressed quickly from humble, ‘painting contractor’ beginnings, as chronicled in the ‘What is Entrepreneurship’ section. Vancouver’s North Shore offered access to many ‘upscale’ home builders. In time, what began as a home-based enterprise became an industry-unique, ‘tie-up-loose-ends’ builder support service.
Initially, this only dealt with the variety of tasks traditional trades would miss or could not promptly return to (e.g., re-framing for a plumber’s change order). Before long, the assignment list was extended, much of it falling outside traditional, trades-person mandates, including small building projects (garages/ gazebos, patio decks), landscape work, or preparing a site for sidewalks and driveways.
Within a year, the nature and need of this highly fragmented and disorganized industry sector were exposed. Although some customers were large, many, as independent builders, suffered from inefficien-cies. Most of the smaller builders faced limited purchasing clout. Few could compete with their large, national and international construction company counterparts.
Findex Purchasing Services Limited was my initial response. It began as a ‘one-man show’, a tiny purchasing agency. With builder-contractor relationships in hand, it was not a hard sell. In whole or in part, most accepted the common-sense proposal of:
“You stay on-site, supervising your trades.
And I’ll hustle for the best deal. Pay me
3 to 6 percent of the purchase price and
I’ll guarantee a savings of at least ten!”
The business soon took shape, establishing a ‘membership subscription’ service model, delivering the advantages of improved efficiency and greater buying power. Increasingly Findex became a support office for these smallish independent builders, helping them to grow their companies and coordinating their collective purchasing.
This was all long before the Internet, laptops and cell phones.
1974 - 1979
"You stay on site, supervising
your trades, and I'll hustle
for the best deal!"
1993 - 1998
Case 2
Nature's Intent™ Environmental Products
Branded Product Line Enhances 30-Year Mineral Operation!
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Here a 30-year, north-central Washington State limestone operation, with two quarries: calcium carbonate/lime & magnesium-carbonate /dolo-lime, and a milling & product production facility, is re-purposed. This initiative wholly transformed what previously had been a single-material process facility. Newly invented micro-milling equipment permitted a diverse list of natural minerals to be ground into uniform particle sizes, creating precise product blends. These materials included but were not limited to agricultural rock minerals − e.g., phosphate, potash, gypsum and zeolites, organic materials such as kelp and fishbone, composted manures, yard waste, and more.
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Empirical crop studies at nearby Oregon State University (Hermiston Extention Center) proved superior performance. The new milling capability enhanced production, creating a full line of regionally tailored crop/soil applicable natural fertilizer and soil amendment products. The results served as the foundation for a comprehensive marketing program addressing the needs of industrial agriculture, local lawn & garden, wholesale nursery and municipal park customers – concurrently launching the brand as:
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Nature's Intent™ Environmental Products
Case 3
Systems-Built Production Alliance
The National Association of Home Builders states that ‘systems-built’ construction includes Heavy Architectural Timber (Log, Post & Beam or Timber-frame), Structural Panels (SIPs/CLTs), and Modular or Concrete.
However, all building systems must comply with local building codes to qualify. Finally, except for their more consistent quality, they should be indistinguish-able from their conventional industry counterparts.
So focused, The Systems-Built Group set up two frame panel plants while organizing like-minded producers as a supply base. This accumulation was, in turn, supported by a comprehensive marketing initiative establishing a decent commercial, builder-developer following.
2004 - 2012
Off-site Construction
​"Redefining how Buildings are
Built & Brought to Market!"
Case 4
Customhaus Property Applications
®
In the hands of creative designers, quality producers and accredited custom builders, ‘plant-built efficiency is often enhanced by heavy architectural timber’s majestic beauty and structural integrity. This brings rustic elegance to estate homes, charm to urban or country cottages and timeless appeal to “character commercial” projects.
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Improving their lot and adding to the Systems-Built operations base, Customhaus embraced a multi-market development plan selectively representing this ‘off-site’ industry. The process combined material supply, plant-built construction and on-site build-out as one comprehensive, ‘stump to stoop’ process.
The development process became seamless. Many inadequacies, long plaguing the building development industry, were overcome. Concurrently, underlying land values were more readily realized.
2008 - 2012
Case 5
Timberwoodhaus Producers Limited
2011 - 2012
Much of BC’s Industrial Forest Products Industry is still highly fragmented, comprised of many single-product-line producers underperforming their market potential.
Timberwoodhaus Producers Ltd (TPL) brought about a solution. Its answer: selectively unite production, sales and distribution within a collaborative ‘complement’. The initiative adopted a business model analogous to a co-op.
Therein TPL assumed a self-appointed leadership role. As the ‘Industry Primary’, it established an exclusive market development banner, concurrently recruiting what is sometimes called an ‘orphan enterprise’ to form a comprehensive ‘production complement’ (serving a growing number of outlets).
Common-purpose sales and distribution supported the collective capabilities of the entire supplier-producer base. It also created new markets, both local as well as international. The result was a diverse product line.
All stakeholders benefited, notably as regional replication contributed to the ongoing expansion of this ‘production network’. The plan, once mature: TPL would establish its corporate value (e.g., Public Company Candidate). Sadly, however, despite initial success, some nasty business thwarted what promised to be a highly lucrative Forest Product Industry Opportunity. [And Yes, you’re certainly welcome to ask about this ‘nasty business’.]
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