As you grow in your business, you find that the concept of profit isn’t as simple as selling more things. Selling one or two strong things, for instance, will go a lot further than selling a pile of weak ones. It’s just a matter of mapping it out well.
Larry Wolfert, a 40-year business and financial veteran and owner of On Demand CFO in East Brunswick, says the building blocks of success in business come from a balanced mix of strategic planning, solid execution, and risk management. And that means foreseeing all the possibilities, all the troubles, and even the plateaus that end up getting in your way.
Wolfert is part of a new program for businesspeople at the Small Business Development Center at the College of New Jersey. He will be the guest executive at the second session of SBDC’s Breakthrough Executive Leadership workshop series on Tuesday, September 16, from 2 to 5 p.m. at TCNJ.
The Breakthrough Executive Leadership program is, largely, a next-phase version of the SBDC’s Master CEO Roundtable, a peer advisory group that has helped business owners identify problems and strategies in order to help them a run tauter ship. Breakthrough Executive Leadership is a 10-session program that began on September 3 and will offer each segment on Tuesday afternoons and again on Wednesday evenings starting at 6 p.m. Each session is $39 and will feature experts who will speak on business development, strategies, marketing, sales, legal matters, and other topics. The course also comes with a free hour of SBDC counseling. Visit sbdc.pages.tcnj.edu/events for the schedule and topics.
Wolfert’s part in the program will concentrate on plugging profit leaks. He will open with about 45 minutes of lessons, followed by a group presentation and a “hot seat” exercise where business owners will be asked to defend their choices and hear some sage, candid advice. The main goal, Wolfert says, is to help clear the bugs off the windshield for business owners. “A lot of companies get to a plateau and then can’t see past it,” he says.
Wolfert grew up in Brooklyn, where he learned a lot about running a business and the spirit of entrepreneurial adventure from his father, who ran his own real estate and mortgages business. His father also invented and patented a lifesaving device shortly after World War II, which Wolfert says made him a little money, but never caught on enough to be its own business.
Wolfert earned his bachelor’s in business administration from Boston University in 1968 and his MBA from New York University in 1970. His career started with small entrepreneurs and moved onto executive positions at and with large companies, including Wonder Bread, Rolodex, Hoffman-LaRoche, and various luxury goods companies. In 2011 he started On Demand CFO to help companies see past those plateaus and figure out how to keep climbing. “My expertise is on the analytic side,” he says.
Death, taxes, and so on. Any plan for success, says Wolfert, begins with having a clear vision of what you want to achieve. “If you don’t have a vision, you don’t know where you’re going,” he says.
And vision starts with a simple question: What can you do better than everyone else in your field? In other words, what is your competitive advantage, what sets you apart from the crowd? This is not just a measure of your skills, Wolfert says, but an all-encompassing idea of what your company does, what the environment and culture of the company will be, and what kind of expectations you have.
This also means looking at what could possibly go wrong (Hint: Everything and anything), and that requires adding a third component to the list of life’s inevitables. “We all know about death and taxes,” Wolfert says. “ I think there’s another component in business, and that is change.”
Business history is replete with examples of companies that thought they were in one business and not in the larger picture. Atari, for one, could have owned video games if it had considered how games would evolve over time. Other companies concentrated on being makers of VHS tapes or floppy disks, but didn’t realize they were in the information storage business, and subsequently suffered when technology moved on.
“If you can’t adapt to change,” Wolfert says, “if you can’t see the analytics, you won’t be there for the long haul.” Strategy, he says, needs to be a living, breathing document.
Focus. The opposite problem to being too narrow of focus is to be too broad. As many companies grow, there is endless pressure to expand the product line. In some cases, product expansion is ridiculous (yes, folks, the makers of Colgate toothpaste once tried to venture into making TV dinners); other times, it’s fine. Still, at some point, even successful companies have a few dog products that look like they’re generating profits but really aren’t.
Wolfert often advises companies to dump a flagging product or service, and this advice usually rattles a few nerves. Companies, he says, see him removing a source of revenue and they worry about the loss of money.
But not all profit is the same. Wolfert says that many products that generate money are so costly that the money spent to offer them negates any real profit. Eliminate the costly product and you now have that money to spend on the products that really work well. If, in other words, you make $101 for every $100 you spend on Product A, you can apply, say, $50 to Product B, which brings in twice what you pay to offer it. “You need to build profits,” Wolfert says. “Not just revenues.”
A lot of the trouble with adaptation, Wolfert says, is entrenched thinking. Small companies in particular keep doing things as they always have, not realizing that better ways have come along. “Too many companies overextend and do not use the resources that ensure their survival,” he says. “When you’re planning look through all the scenarios.”
Wolfert admits that no one can foresee everything, and random events happen out of the blue. But you can prepare for disasters by asking questions like, what would you do if there was another crash and recession, or what if there’s another 9/11?
“You want to respond,” Wolfert says. “Not react by the seat of your pants.”