Many entrepreneurs are uncomfortable with the idea of ‘going back to school’ to learn how to run their own business. And while it could be argued that those who have built a business from the ground up will undoubtedly know it inside out, there’s a lot to be said for taking time out for third-party enlightenment.
This was certainly true for Lara Morgan, founder of branded toiletries supplier, Pacific Direct. Executive education did more than just help her understand how to run her business better – it prevented the company, which at the time was turning over £4.5 million, from going under.
Dealing with success
The problem was not that the business was failing, rather that it was too successful. A born salesperson, Lara had grown Pacific Direct by successfully making deals and establishing an efficient way of creating products and getting them to clients. However, the business was poorly structured and lacked the necessary professional influences to take it to the next stage of growth. Its financial position was precarious and by the year 2000 it had become dangerously overstretched.
“I realised the business was getting too big and it desperately needed structure but I had no idea how to sort it out,” says Lara. “I was working from excel spreadsheets and it was glaringly obvious that my cobbled-together system was coming under serious pressure.
“I was so buried in the detail that I had no appreciation of what it meant to spend time on my business. I realised the business was failing and that this would be a terrible shame after ten years of hard work.”
Back to school
Lara enlisted at Cranfield School of Management and was soon well aware of the mistakes she had been making: the biggest was trying to do everything herself despite, by her own admission, not being a great process manager or financial controller.
“The most important thing I learned was to stick to my expertise. I am a salesperson, but as the business grew I moved further and further away from selling and more towards paperwork and KPIs – neither of which are my strong suit.
“I developed a strategic picture for the business and learned where our strengths and weaknesses lay. I studied the opposition from a financial point of view and laid foundations for cashflow, balance sheets and systems for planning growth through the company’s finances.”
Top of the class
The lessons learned at Cranfield gave Lara an immediate boost and empowered her to have better, more meaningful conversations with clients, suppliers and her bank manager. A direct result was a revision of her business plan that led Lara to successfully renegotiate Pacific Direct’s overdraft from £10,000 to £170,000.
Other outcomes included hiring a general manager and a finance director, and purchasing enterprise resource planning software capable of taking the business to its next growth phase.
With all these positives, it’s only fair to consider the negative aspects of taking time out from the business to attend a course. Did Lara find it a distraction? “It would only be a distraction if I had failed to act on what I learned,” she says. “In raw terms, the course didn’t absorb a lot of work time, because it took place on Friday afternoons and Saturdays.”
Lara was convinced by the positive outcomes of her executive education experience and followed it up with a strategy course at Stanford University in the US, which helped her work out an exit strategy and structure the business for sale. In 2008, as a 99% shareholder, Lara sold Pacific Direct for £20 million – an incredibly successful outcome for a business that looked set to fail just a few years previously.
Lara is also the co-founder of revolutionary sales training organisation Company Shortcuts, which supplies a range of products, services and events for business growth and sales leadership. Lara runs a range of courses, including a sales strategy course that aims to change the dynamic of sales expertise in the UK.
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