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A Monthly Briefing for Optical Lab Owners and Managers

- November 2017 -

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Dollars & Sense

Where Are You in Your Entrepreneurial Life Cycle?

By Ami Kassar

Just as we experience spring, summer, fall and winter each year, there are a similar number of cycles for entrepreneurs. It’s extremely important to understand into which cycle you presently fit, because it determines how you approach growth, helps pinpoint your most comfortable financial options and makes evident your tolerance for risk.

So, what are those four cycles?

Here are some easy-to-remember names: Growers, Gliders, Speed-bumpers and Exiters.

Consider the case of John, a man in his early sixties whose software company has coasted along for years. The business is growing steadily, although at a much slower pace than twenty years ago.

John’s financially set for life and wants to enjoy retirement by traveling with his wife and spending time with his grandchildren. Although there’s no immediate hurry, he’s looking to cash out from his company, which is now largely in the hands of his capable daughter.

As you might guess, John is an Exiter.

At a social function, John strikes up a conversation with a husband-and-wife team named Jason and Tara who run a fledgling software company of their own, although they aren’t direct competitors. Jason and Tara have just won a significant contract and their products are receiving good reviews, but they need capital to meet their demands.

These classic Growers ask John for advice, figuring (correctly) that he’s seen it all. So what does John tell them?

An aggressive businessman all his life, John essentially tells Jason and Tara to be bold—which is the only way to successfully get through each individual entrepreneurial cycle. 

Growers: A Grower is the type of entrepreneur typically depicted in film, on television, in books and all other forms of media. These are the businesspeople looking to expand their operations, often rapidly. They generally have a healthy appetite for assuming risk and are loaded with self-confidence.

John tests Jason and Tara by asking them what they’d do if they received a one million dollars gift. Would they invest all (or most) of that money directly into their business or would they hold on to it, essentially saving it for a rainy day?

John’s happy to hear that his newfound friends didn’t hesitate before saying they were confident in their business and figured that investing the money would go a long way toward solving their growth issues.

John tells them that since their business prospects are solid, there would be numerous financing options available for them ranging from the tried-and-true Small Business Administration (SBA) loan to the ancient practice of factoring to everything in between.

While John is speaking, his audience grows, enthralled by the wisdom he’s imparting. One of the listeners is a long-time friend named Mary whose small custom-framing chain of stores is stable and profitable. She is a Glider.

Gliders: Mary tells the group that she’s reached a happy point where she’s making a solid amount of money, expects her business to remain sound and is loath to wreck a good thing.

John’s been somewhat of a mentor to Mary over the years, so he poses the same hypothetical one million dollars gift question he just asked Jason and Tara.

That led Mary to waffle a bit. She first said she would place a significant chunk of that gift into mutual funds, happy with a smaller return, but still available to be used if need be. After more thought, she decided to place about 75 percent in her business because she realized she was already generating a higher return than what a mutual fund offered.

John approved, noting that keeping a business on an even keel is never a bad thing, especially for someone like Mary, who is beginning to consider retirement options. He also pointed out that since her business was doing well; there’d be no shortage of palatable financial options available if the need arose.

The conversation lurches in a different direction, however, when a frazzled-looking entrepreneur joins the discussion. That would be Derek, the founder of an online sporting goods store. Derek’s business was growing at a double-digit rate, but he overestimated his market and is now stuck with a warehouse full of unsold goods—not to mention his bank wants to pull its line of credit and is demanding repayment.

Derek, a textbook Speed-bumper, asks John what he should do.

Speed-Bumpers: John points out that a little rain falls on most people’s lives at some point and entrepreneurs aren’t immune.

Again, he brings up the hypothetical one million dollars gift.

It doesn’t take long for Derek to gain clarity when he says that he would plunk most or the entire hypothetical one million dollars gift into his business. While some non-entrepreneurs might consider that foolish, Derek realizes that for any business to succeed, it requires the stomach for at least some risk along with overriding confidence. By stepping back, he realizes that—missteps aside—his company and business model are viable and will need some fine tuning.

John cautions that challenges might lie ahead because some financial options will be closed to him. And the options that will be open may carry a greater risk (or interest rate) or even the possibility of surrendering some equity.

Having provided his sage advice to the others, the group of entrepreneurs questions John about his plans.

Exiters: John replies that even the most-fervent entrepreneur will walk away at some point. The reason why doesn’t really matter.

The group then turns the table on John and asks him what he’d do with the hypothetical one million dollars gift.

Not surprisingly, he says, he decides he’d invest half of it in mutual funds, but put the rest back into the business, noting that it would help his successor daughter.

John points out that succession planning is important, but too many businesses either overlook it or give it short shrift. After all, who wants to be thinking about the distant future when the thrill of running a business still looms?

He notes that eventually that day comes, however, and transitioning power is a delicate process, especially when you consider your legacy, not to mention tax concerns, heirs (whether or not they’re taking over the business) and dozens of other things that often aren’t considered.

John does say that the exiting process, which should be a joyful time, can become burdensome and require professional financial assistance.

With that, the group begins to break up, each having gained a bit of clarity in regards to their particular situation.

Conclusion: What have you learned from this hypothetical situation?

No matter what cycle they’re in, entrepreneurs are a fascinating breed; they represent much of what makes the American business world so great.

That said, entrepreneurs don’t know everything and tend to look at the big picture and forgo some of the fine details. That’s why they sometimes need outside help.

The key to providing that help is recognizing that no two businesses—and their financial situations—are alike and can’t be addressed with a rote game plan.

Ami Kassar is the founder and chief executive officer of Multifunding LLC, speaker, and author of the forthcoming book The Growth Dilemma. Heavily involved in business finance for two decades, Ami has advised the White House, The Treasury Department and The Federal Reserve Bank on the state of the financing markets. A nationally-recognized expert on business capital, Ami Kassar has helped over 700 entrepreneurs generate over 300 million dollars for their businesses. For more information on Ami Kassar, please visit www.Multifunding.com.

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Lab Notes

ABB Optical Introduces Digital Eye Lab Network

LABTALK

ABB Optical Group has announced a new brand for its optical labs, the Digital Eye Lab Network (DEL Network), and unveiled a new logo.  

The DEL Network encompasses the original DEL facility in Hawthorne, N.Y., as well as three labs that were acquired in ABB Optical’s 2016 purchase of Diversified Opthalmics: DLab in Cincinnati, Summit Optical in Nashville, and TriOptics in Milwaukee. Each lab will now be identified by its city under the DEL Network umbrella. The New York and Cincinnati facilities will serve as core hubs and the Nashville and Milwaukee labs will provide specialty services as satellite locations.

"For customers, this means the best of both worlds,” said DEL Managing Director Scott Pearl. “We can offer the benefits of our larger hub labs, increased speed, an expanded portfolio and reduced costs, along with the specialized capabilities of our satellite labs for more complex work.”  

ABB is working to fully integrate all four facilities by early 2018, which will allow previous Diversified customers to order from the full DEL portfolio of products, and DEL Network customers to order product lines formerly available only to Diversified customers. DEL’s portfolio includes a large selection of single vision and progressive lens designs from Shamir and Seiko as well as DEL’s own proprietary designs and AR coatings – the Digital Master Series, Digital 5.0 Lens Series, CLARIS HD, CLARIS HD PLUS, and CLARIS bluDEFENSE.

Once the integration is complete, the DEL Network portfolio also will include Varilux, Crizal and the proprietary PureSite lens series from the former Diversified collection. ABB is developing a new online ordering portal that will allow practices to order all product lines, including branded and private-brand lenses, with a single sign-on.  

“We are networking our platforms across all four facilities to create improvements in turnaround time, easy access to a broad range of products, and simplified ordering,” Pearl said. “ABB is well positioned to be a practice’s optical liaison across all eyewear and lab work channels.”

Shamir Releases New Video Content for Eye Care Professionals

LABTALK

Shamir Insight, Inc. manufacturer of premium Freeform® progressive and single vision lenses, has recently released a video for eye care professionals to assist in educating and promoting practices.

Shamir has created a promotional video that educates patients and encourages communication between patient and practice to create a better overall rapport and increase sales. The 40-minute loop video showcases a variety of people in everyday scenarios, each with eyewear chosen to fit their individual lifestyle.

The video illustrates several available design options, highlights the benefits provided by each one and encourages patients to discuss their unique lifestyle needs with their eye care professionals.

“Providing marketing, education and overall industry support has always been one of the things that sets us apart from others," said Rich Dailey, Shamir's Vice President of Sales and Business Development. "Creating this video was just another way we could help our partners reach consumers. Many videos are based on technology that is hard to understand and we wanted to provide something fun that patients could really relate to. We believe this will help open up the conversation between patient and practice which will ultimately lead to a larger loyalty customer base and an increase in sales.” 

The video is a free marketing tool for eye care professionals to use throughout their social media, website, loop in their office or any other way they see would be beneficial. To receive the video via USB drive, eye care professionals can contact their Account Executive or call Ashley and Alex at 877-514-8330.



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Brian Dunleavy, Editor, LabTalk/LabAdvisor

Brian is the Editor of LabTalk. He covers wholesale laboratories, lab systems, other ECP news and features/coverage. Contact Brian at [email protected].

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