From Silicon Valley to Swaziland - Rick & Wendy Walleigh (motivational books for men .TXT) 📗

and the financial aspects of the deal. Robert had explained a lot about the business basics and the union team had already visited the mothballed MPE facility. My role was primarily to explain that we thought this business had good market and profit opportunity and what the required investment and expected financial returns could be. I also needed to back up my opinions with our analysis.

I had done some very thorough analysis, showing alternative scenarios for different rates of plant expansion and various financing approaches with different mixes of debt and equity. Although somewhat challenging, this was basic financial analysis and consequently the easy part. I knew what I was talking about but struggled with how to explain it and not make people’s eyes glaze over or put them to sleep. This was always a challenge in my consulting career. After doing extensive analysis on a company’s operations and coming up with many detailed findings and recommendations, how do you boil it all down into a crisp presentation that senior executives will listen to while sitting still.

The fact that this presentation was mostly about finance, an esoteric topic for many people, made it especially challenging. Most people, even some experienced business people, don’t understand why a company that will be profitable from day one needs financing. They don’t understand the difference between profits and cash flow. They don’t understand why an increase in an asset like accounts receivable can make a business run out of cash. The problem was that understanding all of these was important to understanding the MPE investment. A business can be very profitable, but if its customers don’t pay their bills for two months, the business will need a lot of cash (financing) to operate. I tried explaining all of these things, and in the end, it went very well, but I felt a lot of pressure throughout because the MPE team was depending on me. And this was with a very friendly audience. Fortunately, they wanted to understand, and in the end, I thought they did. The next step was just waiting as they discussed the opportunity with their colleagues and bosses, who would make the final decision.

While I was waiting on MPE, I focused on Tasty Meals. Before going to the Reed Dance and Cape Town, I had met with Phiwa who had brought me up to date on his progress. He was in the process of securing several small plots of land to grow Tasty Meal’s own maize. The plots were numerous and small because Phiwa had to be opportunistic to rent good land at an attractive price. We worked on Tasty Meals’s requirements, month by month, for planting and harvesting, and they looked promising. The bad news was still that once they planted the maize, it couldn’t be harvested for at least three (maybe four) months. The good news was that after the maize began producing, they didn’t need that many hectares of growing land to get them into the plentiful season. This would limit the expense but was still money that Phiwa and Tasty Meals didn’t have.

After spending most of our time on the supply, we talked about increasing sales. I told them what the sales and marketing plan would have to look like, and we began to explore ideas about increasing sales. I reemphasized that an important part of our activity had to be going from ideas to developing a real plan that would be actually used when mealies became available.

When we got back from Cape Town, Sonnyboy was also back from his honeymoon, so we visited Tasty Meals together. The first thing we heard from Phiwa was that absolutely no mealies were available at any reasonable price, so they had shut down production. Although they had been able to tentatively contract to rent land to grow their own maize (and pay at harvest), they had no money to pay for seed, fertilizer, etc. They were trying to tap all of their friends for short-term, high-interest loans, but so far they hadn’t been successful.

One great thing about Phiwa was that he could put aside these short-term, critical concerns and focus on the long-term business plan with the confidence that somehow the business would be successful. Maybe it came from growing up in Africa and achieving personal success in the past despite tremendous odds. I didn’t know what he was feeling inside. Despite the fact that his business was about to die and he was going to lose all of his investment and the collateral he had pledged against the loan, outside he seemed relatively relaxed and was able to focus on the analysis and planning. I admired his attitude and fortitude. It reminded me of some of the dedicated entrepreneurs I have seen in Silicon Valley.

I continued to work on the sales and marketing plan with Phiwa and one of his salesladies, emphasizing that they had to be very specific about where the sales were coming from and how they would make them happen. They had to justify the future sales numbers based on extrapolating their experience to date. Numbers in a spreadsheet without support were not going to be acceptable, especially since the business had never achieved breakeven volume. I explained that their first deliverable had to be a detailed spreadsheet of all the sales through the various channels with supporting backup that showed why they were confident in their estimates. Tasty Meals’s second deliverable had to be the marketing plan that supported the sales numbers. If they needed signs to support sales in small shops, it had to be in the marketing plan. If they needed specialized racks and displays for the supermarkets, it had to be in the marketing plan. And there had to be a person and date assigned to get things done. The less money available, the better a plan has to be. Tasty Meals had no money available, and getting more would be difficult, so we had to have an excellent plan. They realized that they had a lot of work ahead.

When I met again with Tasty Meals, they confirmed that they could rent enough land to supply themselves with mealies year round, but they still didn’t have any money to commit to planting. In the good news category, they had made great progress on the sales plan. Several women who had been selling the mealie bread were visiting shops throughout the country to evaluate their sales opportunities. Then the women were projecting sales for each store, based on their prior experience with similar stores and their conversations with the owners. The numbers were good with solid logic behind them. More importantly, the projections would generate a good profit for the business, and the women weren’t finished. They felt they needed another week to go through all the possibilities in the whole country. The short-term news was negative, but there was hope in the long-term. Phiwa took us out to lunch, and we briefly forgot about the threat that was looming over him.

Later that evening, we met with a food-processing expert who had come from the United States to meet with a number of bakeries. Many bakeries had problems with their products drying out and going stale. This expert was recommending the use of defatted soy flour to help extend shelf life. Shelf life had been a problem for Tasty Meals as well, so we thought the consultant might have some ideas. As he explained to us, Tasty Meals didn’t have a problem with their product drying out and becoming stale. Tasty Meal’s problem was that the product was moist and would readily allow the growth of mold. Although Tasty Meals had tried various preservatives in the recipe, nothing seemed to work in concentrations that didn’t spoil the taste. The expert suggested that a dilute solution of preservative could be sprayed on the outside of the product rather than mixing it into the batter. In this way, the preservative would go only where it was needed, on the outside of the product, and it would be so dilute as to not impact taste. We all thanked the consultant, and Phiwa committed to trying it out. This would make it easier to sell the product in smaller shops and in more remote areas that would have slower turnover and less frequent deliveries.

As I tried to help my individual clients, I kept thinking about the whole office and how we could quickly make a visible impact. From my business school and consulting days, I remembered the standard mantra of strategy—focus. My perception was that our office had not been focused on a limited number of industries to support. This was understandable since the Swaziland office was new and hadn’t yet had time to do a complete analysis of which industries had the most promise. However, I thought that we had done enough analysis of enough sectors that we could at least begin to focus. I volunteered to facilitate an off-site planning session with the intent of focusing our efforts and getting tangible results quicker. This was an activity I had done many times in my career as a management consultant, and I felt quite comfortable taking the initiative. I also felt that it would be a team-building exercise for the business advisors as they shared their activities and plans with each other.

The objective for the full-day session was to position all of our existing and potential projects (representing subindustries) into a two-by-two matrix based on the magnitude of the benefits that the project would produce and the speed at which those benefits could be achieved. Then we would concentrate our resources on the projects that would deliver the most benefits quickly. Since we didn’t think that there would be many projects with large and rapid benefits, we also decided to pursue a portfolio of other projects. Some of these projects would produce very large benefits but might take three to four years to achieve. Other projects would generate smaller benefits but could be accomplished quickly. We would choose a few of each.

At the end of the day, we had categorized all of our projects. We had decided which ones we would pursue and which ones we wouldn’t. We had also determined the levels and types of resources we would need to pursue these projects and agreed on some hiring plans. Overall, it was a really good day. Next, the business advisors needed to develop their more detailed plans and decide what benefits they would commit to delivering and the timeframe for achieving the results. But none of this was imposed from above. It was generated by the business advisors themselves, and consequently was more motivating. I felt good about the day, and even if we didn’t see radically different results right away, I felt that it gave us more focus and the results would come.