Advice for CEOs

One of the biggest challenges growing firms face is finding a way to market their products/services without draining their scarce working capital on marketing, advertising, and promotion. We asked our partners to reflect on the best practices they see companies following to get their products and services to market without costing big bucks.

Every successful company needs a strategy to define how it will win in the marketplace. But entrepreneurs, juggling many priorities, are sometimes inclined to dismiss strategy as a theoretical exercise and a distraction from selling their next customer or hiring their next employee. So how do busy entrepreneurs set strategy in a way that remains practical and relevant to what their company is doing day to day? Our partners reflected on this question based on their experience with companies they’ve run and advised.

Middle market private equity is a topic on which Newport Board Group has deep expertise. Our Chair, Doug Tatum, is Immediate Past Chairman of the Board for the Association for Corporate Growth (ACG), a global not-for- profit organization representing middle market private capital investors, intermediaries and the middle market deal community. Our partners have extensive experience running companies owned by private equity and serving their sponsors as portfolio company operating partners. We know the PE scene very well. But that is only one aspect of our familiarity with PE. We also talk to and serve a great many promising companies that are or could be targets for acquisition by PE. We asked our partners what they hear from entrepreneurs and their investors about PE-- whether or not our partners agree with these views. We got some interesting responses.

Spotting industry and technology trends and market shifts is key to entrepreneurial success. Changing market dynamics have a constant (if often hard to see) impact on the attractiveness of an emerging growth company’s products and services. Critical determinants of a company’s success-- such as its buying power with its suppliers and its pricing power with its customers-- are also changing all the time. Capital-strapped companies need to define their best approach to understanding the markets in which they compete — so as to optimize their chances to be the disrupter not the disrupted.

Patents can be a valuable defense against competitors. But the high cost of creating and defending patents requires a smart IP strategy for growth and emerging companies.

Risk is part of the essence of business. It can be defined as everything that would prevent or interfere with the positive outcomes that entrepreneurs, investors and executives seek. Risk management is the way that companies identify, assess, mitigate, transfer (typically via insurance) and manage risks to their business. Only after risks have been identified can resources be allocated to try to minimize them.