Njbiz

A Different Kind of Grower

Consultants help companies to launch and expand

By: Martin Daks
September 23, 2019 12:01am

When a member of a family-owned northern New Jersey manufacturing company grew worried about succession-planning issues, she put in a call to Steve Lauterback, a Morristown-based small-business growth and turnaround advisor.

“She told me her brother [the owner] had been running the company for 37 years and most of the infrastructure and operational steps were all in his head,” Lauterback recalled. “Very little of the structure was known to others.”

Steve Lauterback

Steve Lauterback – Lauterback Consulting

As she explained, it was time to transition to the next generation, but they had no clue where to start. Worse yet, they had no real sales platform beyond what the owner brought in, and they feared the company would lose most of its customers in the absence of the personal relationships formed through the informal network.

Keep It Moving

Once a well-run business hits on a winning formula, it’s tempting to stick with it. But that just doesn’t work in the long run. Customer needs keep changing, key business contacts move on, so businesses can’t sit still. Surrounded by competitors who are chasing after the same pool of customers, companies have to grow and innovate — or they’ll fall by the wayside. Fortunately, there are change-management and other advisers that can help them to evolve.

“In this case, I created a strategic business development platform along with the operations manual required to memorialize all existing processes,” Lauterback said. “During the development of the manual, as typically happens, we found efficiencies in many of the back-office, shop floor and in-field protocols. Next, I mentored the incoming leadership on how to run the business, lead, and get buy-in from the rank and file. My instructions included constantly articulating the goals of the business, sharing results, developing key performance indicators, creating an employee-leadership review plat form, plus engaging each worker to understand how their job was important and contributed to the overall success of the enterprise.”

For the most part, he works with privately held companies that generate $15 million a year or less of revenue. Although about 65 percent are business-to-business operations, the individual profiles vary — including manufacturers that make components, companies that sell high-tech custom products like robotic inspection devices used in a nuclear power plant; and service providers that focus on process-cooling technologies used in the manufacture of FDA-regulated pharmaceuticals. He’s also advised a cable service subcontractor, small and mid-size electrical contractors, and some retailers.

“These may be a first, second or third generation, usually individual, partnership or family-run LLCs,” added Lauterback. “Companies that come to me have difficulties in one or more of three basic categories. First, many are challenged by simply not having enough customers. Other issues stem from not being able to service the customers they have due to operational inefficiencies or inherent cultural challenges, like a complacent workforce. The last category involves succession matters, which usually means aligning the operations to assure sustainability.”

Developing A Plan

Identifying the specific challenges and crafting a solution involves three general steps, he explained. “First, it’s drilling down to uncover where the problems are.” He does this by taking a close look at the company and its industry, and then examines the firm’s operational infrastructure.

“I also look at issues like the company’s culture and workforce profile,” he said, “and at the sales, marketing, business development or whichever term that it uses to label their customer finding and keeping process. The final part of stage one is to assess management skills.”

After he reviews his initial findings, Lauterback focuses on “creating a plan that lays out what steps we will take to fix the business. Then the last step is implementation, which usually means creating an operations manual.” He compares the process to franchises, which, by federal statute, “are required to provide a proven operational platform, one that when followed, assures the franchisee will be successful. I create a custom ops manual for many of my clients, which outlines and supports every operational function in the business. Once completed and installed, I mentor the team, both employees and leadership. Then, once they’re performing as designed, it’s time for me to get out of the way.”

Some specialists, like South Orange-based Gem Franchise Consulting, focus on a category. Through a relationship with FranServe — a franchise consulting organization — Gem owner Genevieve Manderville has access to more than 500 franchisors in 75 industries, including food and beverage, senior care, pet care, fitness, and automotive. The companies she’s represented include automobile repair shops like Meineke, Midas, and AAMCO; food franchises like Forever Yogurt, Maui Wowi Hawaiian Coffees & Smoothies, and others.

“Franchisees represent all demographics,” she said. “The commonality is that they have
an interest in business ownership via franchising or are looking to explore available
opportunities. Potential franchisees often have a franchise concept in mind; however,
that may change depending on their personal, financial and professional goals.”

Where Do We Go From Here

Some potential franchisees don’t know where to start looking; and they seek full-blown guidance. “I am able to guide the potential franchisee in each scenario,” Manderville said. “These potential buyers have to live and work with the choices they make at the beginning, so it needs to be a franchise that interests or excites them.”

She recently assisted a North Carolina couple in their 40s who wanted to get off their career treadmill. “One was a systems analyst, and the other had a military background,” said Manderville. “They were open to different kinds of franchise opportunities but were determined to have more time to spend with their family and friends. I asked them about their background, and where they saw themselves in the future, and if there were any industries they wanted to avoid. After some deep discussions, they decided on a QSR (quick-service restaurant) franchise opportunity.”

That wasn’t the end of Manderville’s involvement, though. “I arranged for them to meet some current franchisees so they could get some tips, and I set them up for meetings with some funding sources and a franchise attorney.”

She looks forward to continuing to match up franchisors and franchisees, so they can each continue to grow. “Some people get bitten by the entrepreneurial bug,” said Manderville. “I’m here to help guide them.”

Visit NJBIZ.com to see the original article.