INSIGHTS & JOY

A business newsletter with Pizzazz!

"We help leaders become better marketers
using a holistic business approach!"

September-October 2008

It is no time for the faint of heart! It is during rough times that you get to judge the real strength of your company and the quality of your management team. Leaders must remain proactive and positive. Others quickly take on their leader's attitude. A calm, firm hand at the helm can help keep a company afloat. Timely decision-making, based on well-designed plans allow balanced firms to not only weather the economic gale, but to emerge with even stronger positions when the sun again shines. This storm, too, shall pass.

NTX Private Business League. The League's objective is to link business owners who need professional services from time to time with a select group of experienced professionals who provide those services. Business owners gain impartial outside advice on their most pressing issues and they have access to the full array of professional services when, and if needed. I will update you in future letters as the NTX Private Business League gains traction. Contact me if you would like more information about the League.

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IN THIS ISSUE

Managing during very tumultuous times

Marketing Facets - The Market Focused Guide to Company Analysis

Smiles make the day!

$ Million Marketing Tips

Amazing Facts!

Managing during very tumultuous times

Recent events seriously affecting the U.S. and global economies raise questions about how best to manage a business when the world turns inside out. Past guidelines and long-standing policies may have to undergo radical changes to meet unprecedented challenges. We have seen some industry giants topple in the last few weeks, and it is a good bet that additional venerable firms, caught in an unbalanced condition, will be absorbed or liquidated. How did this happen?

Here is my opinion. Misguided governmental social "tinkering" dates back to the Carter administration. In recent times, corrupt congressional committee chairmen with financial oversight responsibilities over Fannie Mae and Freddy Mac operations accepted large campaign contributions and sweetheart loan deals from leaders of these quasi-governmental entities and big mortgage lenders. Meanwhile, the leaders of Fannie Mae, etc. personally pocketed millions in bonuses as they actively encouraged lenders to extend home loans to unqualified borrowers, agreeing to buy up the packaged loans which, in turn, swelled Fannie Mae's portfolio. The same congressional committee chairmen and majority leaders blocked efforts to reform the system and halt the high risk sub-prime lending practices that triggered today's global financial meltdown. The damage is done. Panic is the result. Hopefully, a hard lesson learned. All Americans must now shoulder the burden created by the actions of a few. It will not be pleasant, but Americans are not quitters!

Running a successful business has always been tough. The job just became much tougher!

Getting back to basics would be a good place to start, given the uncertainties we now face. Under normal conditions, many firms spread their wings, try new approaches, add new products and services that require additional fixed overhead expenses. When it is crunch time, leaders should go back and look at the firm's mission. Strong leaders question all past assumptions and examine prior actions and commitments, separating the essential elements from any that fail to directly and positively impact the fundamental mission and company vision.

Now is a very good time to do a critical analysis of your whole company. A thorough analysis means asking a lot of penetrating questions, answering factually and realistically. Here are just a few examples:

What is the company's financial position? How highly leveraged with debt? Is adequate cash available to support operations? Are we taking all worthwhile discounts to help improve margins?
Is the firm organized and staffed properly to achieve its mission? How productive are our people? Too many employees doing non-essential tasks? Can we redeploy people to provide more greater customer satisfaction? Do we have a lay-off contingency plan?
Is the company in a well-balanced condition? How do our financial ratios look? How is the balance between financial, physical, and human resources? How is the balance between marketing, production, and administration functions?
How is the firm's relationship with its banks or other lenders? Are lines of credit adequate and secure for the next few months? Can we increase our lines to cover growth? Can we reduce our cost of borrowed capital?
What customer segments will we continue to serve? How will those segments be impacted by the current economic situation? Should we reinforce our credit policies? Are we tracking receivables aging closely? How will we avoid excess bad debt expense?
Are inventories in line with customer requirements? What is our average inventory turnover? Do we have old or slow moving stock that is tying up cash?
What range of sales volume can we forecast with our present customer base? How best can we attract and retain good accounts? Is our sales team actually acquiring meaningful new business? Are we taking good care of our key accounts?
Where are our margins now? How can we act to protect or improve margins in a down market? What is the cost of chasing business with discounts and reduced margins? How can we add more customer value without raising our costs?
How can we identify and reduce or eliminate unnecessary fixed expenses? Have we reviewed each expense category in detail, staying alert for savings opportunities? New insurance quotes? Lease renegotiation? Fuel and delivery expenses? Telephone and utility expense reduction?
Do we know our break even point? Can we accurately predict the effects on our bottom line from specific decisions we are considering?

Companies that are in good overall condition will have opportunities to make substantial gains, even in a down economy. While weaker competitors pull in their horns and 'hunker down,' strong, well-balanced companies will have the advantage. Strong firms can continue marketing and sales efforts, communicate with customers and prospects, and operate effectively. That is why strong firms generally gain market position during downturns, while weak firms must cut into the very marrow of their operations. Customers, who are also struggling with the new reality, are more willing to switch to a stronger supplier as the weak supplier's offering quality slips. Although it is counter-intuitive, it is best to retain and even strengthen your marketing and sales effort when times are tough. At the same time, you must deliver the quality products and exceptional service that your marketing effort promised.

It is no time for the faint of heart! It is during rough times that you get to judge the real strength of your company and the quality of your management team. Leaders must remain proactive and positive. Others quickly take on their leader's attitude. A calm, firm hand at the helm can keep a company afloat. Timely decision-making, based on well designed plans allow balanced firms to not only weather the economic gale, but emerge with even stronger positions when the sun again shines. This storm, too, shall pass.

Marketing Facets - The Market-focused Guide to Company Analysis

Should a salesperson's birth date be an important fact for a company acquirer to know? Could extended product warranties create a competitive advantage? How does the company forecast sales? What are the backgrounds and capabilities of the firm's key managers? Answers to these and a vast array of other in-depth questions receive attention in Marketing Facets.

Marketing Facets is a practical resource for those involved in determining the current health of a company and gauging its future prospects. Marketing Facets is a 103-page guidebook, and a supplement to other evaluation procedures and information normally gathered during a thorough due diligence or business valuation process. The workbook takes a holistic approach, assembling facts and management assumptions in key areas to help the analyst form and support conclusions.

Marketing Facets is a valuable resource to private investment fund managers, individual investors, venture capital specialists, investment banks, and valuation specialists. Marketing Facets is also a guide for C-level executives who wish to perform their own company analysis as part of normal business planning, or in advance of efforts to refinance, acquire or divest.

Marketing Facets is available in electronic form via the Internet, on CD/ROM, or in print with a ring binder.
> Electronic in MS Word .doc or Adobe .pdf format via the Internet @ $79.95
> CD/ROM format @ $85.95 including U.S. shipping and handling
> Ring binder version and CD/ROM combo @ $99.95 including U.S. shipping and handling

Consulting is also available. Please contact me for additional information.
Telephone: 972.931.7993 Fax 972.931.0542 rpmorgan@morganmarketingsolutions.com.

Smiles make the day!
About difficulties

1. Tackle difficulties at first sight. The longer you gaze at them the bigger they get.

2. Recall the steam kettle. Though up to its neck in hot water, it continues to sing!

3. How would a leader know if his team is weak or strong unless it has been tried and tested?

4. Few travel the road to success without a puncture or two!

5. If nobody knows the trouble you've had, you don't live in a small town.

6. It is easier to fall into trouble than it is to work out of it.

7. There are two sure ways of meeting difficulties: alter the difficulties, or alter yourself to meet them!

8. Keep your eye on the ball. Troubles and weeds thrive on lack of attention!

$ Million Marketing Tips

TIP: Each company's offering and service level is different. Effective marketing communicates how your offering best satisfies your customer or prospect.

TIP: Maintain a strong marketing and sales effort, even in tough times. Quickly build a 'doable' plan, get your team committed to the plan, then do it!

Amazing Facts!

1. One in 500 people will have one blue eye and one brown eye.

2. Mary Stuart became Queen of Scotland when she was six days old. I wonder who changed her diapers?

3. Mosquito eggs can survive in a dried-up state for 5 years.

4. There are no turkeys in Turkey.

5. In Denmark, Danish pastries are called "Vienna bread."

6. Einstein could not read until the age of nine.

A client speaks: "The experience at Garrett Creek Ranch was an unbelievably positive experience. Every person attending has followed up with enthusiasm and a lot of thanks for the entire weekend. Then, the added benefits of our update with the rest of our team today completed the circle of energy that is flowing through this store today. Thank you so much for sharing just a bit of your knowledge with us all but especially Paul and myself. We appreciate all that you have begun so far and I'm sure the future holds great things for everyone involved."
Dianne Tacker, CFO, The Tacker Company, Inc., Grapevine, TX

P.S. Ninety-five percent of our engagements originate as a referral from helpful people like you!
If you know someone who:

> Wants to develop a more productive marketing program, or

> Needs help building and implementing an effective operational business plan, or
> Wants to exit a business or acquire another company,

I would appreciate the opportunity to discuss the situation with you.

Our ideal client is a business owner or CEO between 30 and 60+ years old. Usually with a financial, engineering, or production background. Who is often impatient, and interested in improving company performance. Comes alive when you ask, "How's business?" He, or she, is practical but also enjoys the finer things in life. So, you may see my ideal client driving a Lexus, BMW, or SUV to Neiman Marcus...and to Sam's Club. Who do you know that fits this description?

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Richard P. Morgan CMC, FIMC
Morgan Marketing Solutions, Inc.
Two Galleria Tower, Suite 10008
13455 Noel Road, Dallas, TX 75240-6620

Telephone 972.931.7993 fax 972.931.0542
email rpmorgan@morganmarketingsolutions.com
www.morganmarketingsolutions.com

Author, Marketing Facets - The Market-focused Guide to Company Analysis

"We help leaders become better marketers using a holistic business approach!"