Building Businesses From Ideas

hugh.mason@pembridge.netwww.pembridge.net

www.pembrideasia.com

Hugh MasonPartner, Pembridge Partners LLP (UK)

Director, Pembridge Asia Pte Ltd (Singapore)

Building Businesses from Ideas

Pembridge

Founded 2001 to help owner-managers of creative businesses to build and release value in their businesses. We help someone become a millionaire every 4-8 weeks.

In total: five partners + eight staff + 20 regional associates. People who have ‘been there before’ in Music, marketing services, TV, Film, Design …

US$50m+ raised/invested, 50 current engagements across Creative Industries

Active in Singapore, UK, Netherlands1,800+ companies engaged

Coming Up

1. Ideas BusinessesWhat is an ‘Ideas’ business?

Are ‘ideas businesses’ special?

2. The Early YearsHow businesses startHow businesses grow

3. Coming of AgeAttracting an investor

Letting go

Part 1

‘Ideas’ businesses

Fuelling the ‘Knowledge Economy’

Science

$

Products& Services

CultureResearch

InnovationCreativeIndustry

ArtTechnicalIP

AestheticIP

The right vehicle for the journey

Businesses: vehicles for ambition

Urge 1:Do great workCultural WealthWork focus

Urge 2:Build a better worldSocial WealthWorkplace focus

Urge 3:Make moneyEconomic WealthMarket focusPerhaps 5% of SMEs

Part 2

The Early Years

Most businesses don’t grow

Unwilling to

answer

Don't know

£5m - £50m

£2m - £4.99m

£500,000 - £1.99m

£250,000 -

£499,999

£100,000 -

£249,999

£60,000 - £99,999

£30,000 - £59,999

£10,000 - £29,999

Less than

£10,000

turnbanding

100

80

60

40

20

0

turnbanding

The number of businesses in the larger turnover bands falls rapidly

Turnover =>

Num

ber

of

Firm

s =

>

The challenge of growth

Most small businesses scratcha living down here

This is where the good stuff is

In between there is anuncomfortable journey

MaturityHigh

Medium

Low

Micro Small Medium Large

Size

One model of business growth

ClubsLevel 2

ArtisansLevel 1

Freelancers/ pre-start-up

Level 0

Value GrowersLevel 4

Value CreatorsLevel 3

AcquirersLevel 6

Value Realisors

Level 5

Public Companies

Level 7

Foundations for growth: a team

CEO /Commercial / Sales

Director

Creative / TechnicalDirector

Finance Person Operations Person

Every business needs:• A Finder• A Minder• A Grinder

Foundations for growth: plans

Some operational plans• Sales funnel• Marketing plans• Staff development plans• Cashflow forecasts

Some strategic plans• Exit / succession plans• Plans to set goals• Plans to build value• Plans to merge/acquire

Operational process: a sales funnel

There needs to be a steady stream of possibilities coming downthe funnel to ensure that production resources are kept busy. That oftenmeans concentrating most on sales when the delivery team are busy!

Part 3

Coming of Age

Strategic planning: setting goalsPERSONAL GOALS

•Why are you doing what you do?•What’s your idea of success?•How much risk/certainty?

CURRENT POSITION•Where is the firm now?•What makes it special?•How is it selling itself?

FUTURE SCENARIOS•What credible futures might be possible?•What would the pros and cons of each be?•What would it take to make each one real?

SETTING THE FIRM’S GOAL•Which scenario offers the best match to the team’s personal goals?

VISUALISE THE PLAN•Create snapshots of the firm’s future projects, money and people for each quarter over the next 3-5 years.

MAKING IT REAL•Identify the partners and resources needed to make the plan real.•Commit to execution.

Attracting investment

• Investment in what?

• Projects might – or might not - be golden eggs

• Growth businesses keep laying golden eggs

Inside the investor’s head

risk reward

Investors are conservative

Traditional business• Tangible Assets• Can see where the

money’s gone

Ideas business• What have I bought?• If it doesn’t work,

whathave I got left?

MaturityHigh

Medium

Low

Micro Small Medium Large

Size

Financing the stages of growth

ClubsLevel 2

ArtisansLevel 1

Freelancers/ pre-start-up

Level 0

Value GrowersLevel 4

Value CreatorsLevel 3

AcquirersLevel 6

Value Realisors

Level 5

Public Companies

Level 7

CompanyValuation

Time

RiskFFF

Self /Debt/SFLG

Angels

VCs

StockMkt

Six Golden Rules for your Exit

• Set ruthless targets• Do a reality check. • Be transparent• Rein in the Big Ideas• Stop pitching, start listening• Make sure the faces fit

hugh.mason@pembridge.netwww.pembridge.net

www.pembrideasia.com

Hugh MasonPartner, Pembridge Partners LLP (UK)

Director, Pembridge Asia Pte Ltd (Singapore)

Building Businesses from Ideas