The last week and a half have been crazy for me. Since November, 2007, I have been chairman of the board of directors of SonnenEnergy Corp. (www.sonnenenergy.com), a public company that trades on the Toronto Venture Exchange (TSXV:PWR). The company is a solar energy integrator and independent power producer with most of its operations in Germany.
Last Monday, the day before our annual general meeting of the shareholders, the board of directors decided that we needed a change in the leadership of the company. On short notice, I agreed to step in as President & CEO until we can conduct a search and identify an appropriate candidate for the job. The next day I addressed the shareholders and two days later I did the earnings conference call for shareholders and analysts.
You can hear the webcast of my conference call at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2394480.
In between these meetings and over the past weekend I have been busy getting my head around the issues, communicating with key stakeholders and planning a trip to Germany to review our operations.
As I see it, my goals are as follows:
1. Conducting a thorough and comprehensive search to find a new CEO to lead this company, ensure that we execute on our business plan and create value for our shareholders;
2. Working diligently to ensure that we deliver on the projections laid out by management and that revenue from future projects comes in as projected; and
3. Making it a priority to secure the funding we require in order to fund our future growth and meet our installation and power production targets in this year and the years to come.
With the whirlwind that I have jumped on to, I may not be blogging on as regular a basis. Stay tuned.
Wednesday, September 3, 2008
Sunday, August 17, 2008
All Your Eggs in One Basket
Much has been heard and written about businesses that have too much of their revenue tied to one customer. If the customer goes elsewhere, you lose your business.
In fact, a friend of mine who shall remain nameless for confidentiality purposes was just about to submit a letter of intent to buy a business that had 90% of its revenue coming from one customer. During his due diligence, my friend heard a rumour that the customer representing 90% of the business had recently decided move to single sourcing for this product and the target company apparently was not going to be the single source. Yikes.
Another example of having all one's egg is one basket involved my client Auctionwire Inc. This is a supply side situation. Auctionwire is the leading auction agency for top brand companies and non-profit organizations. Historically, they ran all of their high end auctions exclusively on the ebay platform. Ebay was effectively their sole supplier of the back end of their auctions. A number of months ago, Auctionwire had a dispute with one of their customers when the customer failed to deliver the auction item and Auctionwire refused to forward the purchase price opting to protect the buyer. A complaint was lodged with ebay, who rather that ajudicating whether the complaint was valid, began to arbitrarily suspending some of Auctionwire's other auctions even though they had nothing to do with the dispute.
Auctionwire began to realize that it had all of its eggs in ebay's basket and that their entire business was at risk. Ebay could arbitrarily and unilaterally put Auctionwire out of business because of the onerous terms of their standard form user agreement. Because of the near monopolistic position that ebay has in the market, Auctionwire has no ability to negotiate the terms of the user agreement. They have to take it or leave it.
Auctionwire decided to leave it. They took immediate action to diversify their suppliers of the online auction back end. Auctionwire successful found another platform and was able to secure the exclusive licence to use this online auction software. Now Auctionwire controls their own destiny because they have complete control over their online auction back end systems and no longer are dependent on ebay.
Be very careful if you have all of your eggs in one basket, whether it is on the supplier or the customer side. Being so dependent on someone puts your business in a very vulnerable position. Whether they have greater bargaining power, end up going out of business or being bought by one of your competitors, having all of your eggs in one basket could result in the death of your business.
In fact, a friend of mine who shall remain nameless for confidentiality purposes was just about to submit a letter of intent to buy a business that had 90% of its revenue coming from one customer. During his due diligence, my friend heard a rumour that the customer representing 90% of the business had recently decided move to single sourcing for this product and the target company apparently was not going to be the single source. Yikes.
Another example of having all one's egg is one basket involved my client Auctionwire Inc. This is a supply side situation. Auctionwire is the leading auction agency for top brand companies and non-profit organizations. Historically, they ran all of their high end auctions exclusively on the ebay platform. Ebay was effectively their sole supplier of the back end of their auctions. A number of months ago, Auctionwire had a dispute with one of their customers when the customer failed to deliver the auction item and Auctionwire refused to forward the purchase price opting to protect the buyer. A complaint was lodged with ebay, who rather that ajudicating whether the complaint was valid, began to arbitrarily suspending some of Auctionwire's other auctions even though they had nothing to do with the dispute.
Auctionwire began to realize that it had all of its eggs in ebay's basket and that their entire business was at risk. Ebay could arbitrarily and unilaterally put Auctionwire out of business because of the onerous terms of their standard form user agreement. Because of the near monopolistic position that ebay has in the market, Auctionwire has no ability to negotiate the terms of the user agreement. They have to take it or leave it.
Auctionwire decided to leave it. They took immediate action to diversify their suppliers of the online auction back end. Auctionwire successful found another platform and was able to secure the exclusive licence to use this online auction software. Now Auctionwire controls their own destiny because they have complete control over their online auction back end systems and no longer are dependent on ebay.
Be very careful if you have all of your eggs in one basket, whether it is on the supplier or the customer side. Being so dependent on someone puts your business in a very vulnerable position. Whether they have greater bargaining power, end up going out of business or being bought by one of your competitors, having all of your eggs in one basket could result in the death of your business.
Wednesday, July 30, 2008
Indian Drilling Company
I just returned from a week in Calgary with my new client Mohit Gupta of Geo Drilling Ltd., a coal bed methane (CBM) start up in India.
I met Mohit when I was in Delhi in 2004 as part of the speaking tour that I did in connection with the launch of my book, Lessons from the Edge. Mohit was the president of the Entrepreneurs' Organization chapter in Delhi and was my host during my stay.
Mohit is now working with some partners with coal industry experience to build an Indian CBM drilling company. Apparently, while there are any number of traditional deep well drilling companies in India, there are virtually no competitors in this specialized space. Shallow well drilling for CBM requires unique skills.
My mandate is to find a Canadian joint venture partner for Geo Drilling. While Geo Drilling has capital, labour and local expertise and contacts, they require a Canadian JV partner with the specialized skills to drill for CBM. We had a very successful trip. We identified a couple potential partners and we are now getting to know them better in order to identify the ideal partner. We will then negotiate the terms of the JV.
Its all gloom and doom here in Ontario these days. Real estate prices are drifting in the wrong direction and the lay offs in the manufacturing sector are piling up. Calgary on the other hand is in full fledged boom town mode. It was reinvigorating to be in an environment where there is a sense of confidence about the economy. I look forward to spending more time in Calgary and India as we put together this exciting Indo Canadian joint venture.
I met Mohit when I was in Delhi in 2004 as part of the speaking tour that I did in connection with the launch of my book, Lessons from the Edge. Mohit was the president of the Entrepreneurs' Organization chapter in Delhi and was my host during my stay.
Mohit is now working with some partners with coal industry experience to build an Indian CBM drilling company. Apparently, while there are any number of traditional deep well drilling companies in India, there are virtually no competitors in this specialized space. Shallow well drilling for CBM requires unique skills.
My mandate is to find a Canadian joint venture partner for Geo Drilling. While Geo Drilling has capital, labour and local expertise and contacts, they require a Canadian JV partner with the specialized skills to drill for CBM. We had a very successful trip. We identified a couple potential partners and we are now getting to know them better in order to identify the ideal partner. We will then negotiate the terms of the JV.
Its all gloom and doom here in Ontario these days. Real estate prices are drifting in the wrong direction and the lay offs in the manufacturing sector are piling up. Calgary on the other hand is in full fledged boom town mode. It was reinvigorating to be in an environment where there is a sense of confidence about the economy. I look forward to spending more time in Calgary and India as we put together this exciting Indo Canadian joint venture.
Thursday, June 26, 2008
A Personal Branded Website
I have decided to create a personal website. It has been an interesting process. As I go through the design stages, it begs a number of questions:
- Why do I want one? Is a personal brand the right way to go or should I be creating a corporate site for Cale Financial?
- What is the call to action? What am I looking for? Clients for my advisory practice? Corporate director opportunities? Exposure for my writing? Speaking opportunities?
- Should it be in first person ("I do this; I do that") or third person ("Jeff Dennis does this; Jeff Dennis does that")?
- What domain name should I use (unfortunately the jeffdennis.com and jeffdennis.ca domain names are taken)?
- Then there are the design issues of colour, font, layout, etc.
- Finally, I have to learn about search engine optimization strategies so that someone will come to my site.
Why a Personal Brand?
I've decided to go with the personal website because I am building a personal brand. People know me as Jeff Dennis, serial entrepreneur and trusted advisor to the CEOs of fast growth companies. My company, Cale Financial Corporation, has been in existence for over 10 years and has no brand recognition. I have merely used it as a vehicle for my capital raising activities since it is registered with the Ontario Securities Commission as a limited market dealer and as such is entitled to do "private placement" transactions with accredited investors. I am known as having expertise in the entrepreneurial field - strategy, finance, etc. If they search for me on Google, they will likely look for Jeff Dennis, not Cale Financial. A personal website will reinforce this.
What Am I Looking For?
My first draft of the copy for the website was all over the map. It was neither here, nor there. A little bit of this and a little bit of that - advising, capital, writing, speaking. Confusion.
It was a great process to map out the site as a flow chart and then write the copy for each page of the site. As I refined my writing, I kept asking myself what I was looking for? What is the call to action? I decided that my bottom line is my bottom line - I want new advisory clients. Everything else simply provides credibility as to why someone would want to hire me.
First Person?
The jury is still out on this question. Some would argue that first person is better because its less formal and creates a more approachable tone. On the other hand, you can come across as egotistical as you blow your own horn. My instinct is to go with a third person voice. It comes across as a testimonial so it is less self serving sounding. But, I may still change my mind.
Domain Name
The jury is still out on this one as well. I was disappointed that jeffdennis.com and jeffdennis.ca were taken by a jeweller and a real estate agent, respectively. Stay tuned as I figure this one out.
Design
I am using Teresa Gamble to design my site. She designed my wife's site - www.talktherapy.ca - which has been very successful. Lori gets the vast majority of her clients from Google searches that land on her site.
SEO
SEO or search engine optimization is something that I am just learning about. Teresa has clearly done a great job with Lori's website. I am doing some research and will rely on Teresa's expertise. From what I have read, the bottom line seems to be coming up with key words and having your site linked to other sites.
As soon as my website is up and running I will update my blog with more of the process and my learning. Stay tuned.
Monday, June 16, 2008
The Forest Hill Barber Shop Golf Tournament
On Spadina Road in the Forest Hill Village there is a small barber shop that has been there forever. Certainly longer than my 50 years. The barbers are Nick, the patriarch, who has been there as long as I can remember; Mario and Terry, Nick's sons-in-law; and Nicola.
The Forest Hill barbers have a thriving business that's a throw back to the good old days of barber poles, straight razor shaves and no appointments. Because of their location in the Forest Hill Village, their clientele are the whos who of Canadian business, law and medicine. On any given day you can see captains of industry waiting in line for the next available barber. There's a family feeling as Nick and the boys seem to know a little bit about every customer and their families. In addition, many a deal has been done while waiting for your turn. I myself can think of at least 2 opportunities that came to me while waiting to get my buzz cut.
What most impresses me about the Forest Hill barbers is that 13 years ago they started a charity golf tournament to raise money for Sick Kids Hospital. I just attended the 13th version a couple of weeks ago which raised over $100,000. Over the years, they have raised well over $600,000.
Nick, Mario, Terry and Nicola enlist the support of their Forest Hill clientele, the local Forest Hill Village business community and their Woodbridge friends and family. It is an amazing event. It not only has the usual trappings of the typical charity golf tournament, but they also have homemade favourites set up at various holes such as Italian wine and cheese and expresso and Italian pastries.
The barbers are on their feet cutting hair from 9 to 6 five days a week. They then put this incredible event together in their spare time. The Forest Hill Village barbers are amazing entrepreneurs in every sense of the word.
The Forest Hill barbers have a thriving business that's a throw back to the good old days of barber poles, straight razor shaves and no appointments. Because of their location in the Forest Hill Village, their clientele are the whos who of Canadian business, law and medicine. On any given day you can see captains of industry waiting in line for the next available barber. There's a family feeling as Nick and the boys seem to know a little bit about every customer and their families. In addition, many a deal has been done while waiting for your turn. I myself can think of at least 2 opportunities that came to me while waiting to get my buzz cut.
What most impresses me about the Forest Hill barbers is that 13 years ago they started a charity golf tournament to raise money for Sick Kids Hospital. I just attended the 13th version a couple of weeks ago which raised over $100,000. Over the years, they have raised well over $600,000.
Nick, Mario, Terry and Nicola enlist the support of their Forest Hill clientele, the local Forest Hill Village business community and their Woodbridge friends and family. It is an amazing event. It not only has the usual trappings of the typical charity golf tournament, but they also have homemade favourites set up at various holes such as Italian wine and cheese and expresso and Italian pastries.
The barbers are on their feet cutting hair from 9 to 6 five days a week. They then put this incredible event together in their spare time. The Forest Hill Village barbers are amazing entrepreneurs in every sense of the word.
Thursday, May 29, 2008
Looking for an Acquisition for a CPC
As you may know, I am the chairman of the Eminence Capital Group. We are a group of "eminent" people who have come together to create a series of capital pool companies or CPCs under the CPC program of the Toronto Venture Exchange.
A CPC is essentially a shell public company. It has between $300,000 and $2 million in cash, a minimum of 200 investors and at least 3 public company eligible directors. The CPC has 2 years from its inception to acquire an operating business that otherwise meets the listing requirements of the TSXV.
The Eminence Capital Group is working on its second CPC. We are just about to complete our IPO and we are reviewing potential acquisitions. Our criteria for an acquisition is as follows:
A CPC is essentially a shell public company. It has between $300,000 and $2 million in cash, a minimum of 200 investors and at least 3 public company eligible directors. The CPC has 2 years from its inception to acquire an operating business that otherwise meets the listing requirements of the TSXV.
The Eminence Capital Group is working on its second CPC. We are just about to complete our IPO and we are reviewing potential acquisitions. Our criteria for an acquisition is as follows:
- Experienced, quality management in place
- At least $5 million in annual sales with the prospect of reaching $10 million in sales within 12 to 18 months
- Profitable or at or nearing breakeven within 6 to 12 months
- $15 million market cap within 12 months
- Rapid growth potential
- Current public market appeal, including interest from institutional investors
- Company has public peers
Obviously there are always exceptions to each of the criteria. For example, we would look at resource opportunities that don't necessarily have revenues.
Please let me know if you are aware of any companies that are interested in going public and meet our criteria.
Wednesday, May 21, 2008
Cubapreneurship
I just got back from an incredible 5 days in Havana. I went with my brother-in-law for a "boys" weekend to celebrate my upcoming 50th birthday.
I had never been to Cuba before and didn't know what to expect. I had previously wondered about whether it was appropriate to go, thereby supporting a repressive regime. My love of Cuban cigars (and a rationalization of helping the Cuban people with my meagre tourist pesos) enabled me to get on a plane.
I was struck first by the fact that Havana is stuck in a time warp. Little has changed from January 1, 1959, the date of the revolution. The cars and the buildings seemed to have been stopped in time. There was a certain charm about it, however, it indicated the lack of money available to the people to buy basic things and to the government to improve infrastructure.
There is tremendous potential for Havana to become a world class city. All of the components are there - wide boulevards, a mix of beautiful architecture (especially in Old Havana), history and a young and vibrant population. They just need a little freedom and some much needed capital for investment.
I understand that things are starting to change. Since Fidel's illness, his brother Raoul has taken over the reins of leadership. Once considered the heavy, Raoul is now much loved by the people for the few small freedoms that have been instituted in the past month or so. Cubans can now go into hotels and restaurants that were previously the sole domain of foreigners. They can also legally buy computers and DVDs.
Just as the country has 2 currencies - one for the locals and one for foreigners, Cuba also has 2 economies. The vast majority of the Cuban people live on $20 per month and have little available to them other than some basic necessities. On the other hand, there is a vibrant capitalist economy working, mostly serving foreigners and Cuban entrepreneurs who serve foreigners. You can find privately owned and operated restaurants as good as any in the world. There are entrepreneurs selling cigars out of their homes and on the street. There are cab drivers and of course sex workers.
With more freedom, I predict that money will flow into Cuba. For example, if foreigners are allowed to own real estate, other than as a vacation home, capital will flood into the country and the wonderfully beautiful Spanish colonial buildings that are currently in such a state of disrepair will be restored to their former glory.
If the recent changes by Raoul are a sign of things to come, even if democracy is slower to come, capitalism can come to this beautiful island and unleash the pent up Cuban entrepreneurship. Look what's happening in China.
I had never been to Cuba before and didn't know what to expect. I had previously wondered about whether it was appropriate to go, thereby supporting a repressive regime. My love of Cuban cigars (and a rationalization of helping the Cuban people with my meagre tourist pesos) enabled me to get on a plane.
I was struck first by the fact that Havana is stuck in a time warp. Little has changed from January 1, 1959, the date of the revolution. The cars and the buildings seemed to have been stopped in time. There was a certain charm about it, however, it indicated the lack of money available to the people to buy basic things and to the government to improve infrastructure.
There is tremendous potential for Havana to become a world class city. All of the components are there - wide boulevards, a mix of beautiful architecture (especially in Old Havana), history and a young and vibrant population. They just need a little freedom and some much needed capital for investment.
I understand that things are starting to change. Since Fidel's illness, his brother Raoul has taken over the reins of leadership. Once considered the heavy, Raoul is now much loved by the people for the few small freedoms that have been instituted in the past month or so. Cubans can now go into hotels and restaurants that were previously the sole domain of foreigners. They can also legally buy computers and DVDs.
Just as the country has 2 currencies - one for the locals and one for foreigners, Cuba also has 2 economies. The vast majority of the Cuban people live on $20 per month and have little available to them other than some basic necessities. On the other hand, there is a vibrant capitalist economy working, mostly serving foreigners and Cuban entrepreneurs who serve foreigners. You can find privately owned and operated restaurants as good as any in the world. There are entrepreneurs selling cigars out of their homes and on the street. There are cab drivers and of course sex workers.
With more freedom, I predict that money will flow into Cuba. For example, if foreigners are allowed to own real estate, other than as a vacation home, capital will flood into the country and the wonderfully beautiful Spanish colonial buildings that are currently in such a state of disrepair will be restored to their former glory.
If the recent changes by Raoul are a sign of things to come, even if democracy is slower to come, capitalism can come to this beautiful island and unleash the pent up Cuban entrepreneurship. Look what's happening in China.
Monday, May 12, 2008
To Blog or Not To Blog, That is the Question
I have been mulling over for some time whether I should be blogging. In my upcoming column in Profit Magazine, I share with my readers my personal journey into the blogosphere as well as some tips that I have picked up along the way about blogging.
This is my inaugural blog. At this point I am not sure where this is going to go. My initial thoughts are to share with anyone who cares to read my blog my tips for entrepreneurs that I have learned (mostly the hard way) as a serial entrepreneur for the last almost 20 years. I also plan on spouting off with my views on business, the economy and politics. Finally, I will keep you up to speed as to what I am up to with my latest ventures (within the confines of the law in the case of any publicly traded situations).
Blogging has become ubiquitous. Everyone is doing it in the US. Canadians, at least Canadian journalists and political junkies, have jumped on the bandwagon. Corporate blogging and blogging by CEOs has not really caught on in the Great White North. While I am not currently the CEO of a company, other than my own advisory business, I have quite a bit of experience as a CEO and I currently work with a handful of CEOs of fast growth companies as I help them in their quest to take their companies to the next level. Its time for me to take the plunge and to become a blogger, perhaps as a way to inspire other entrepreneurs to do so.
Right now only one of my CEO clients or former clients are blogging. Razor Suleman's company I Love Rewards Inc. has a corporate blog. Razor, as CEO, is one of a number of authorized bloggers. The purpose of their blog is to:
This is my inaugural blog. At this point I am not sure where this is going to go. My initial thoughts are to share with anyone who cares to read my blog my tips for entrepreneurs that I have learned (mostly the hard way) as a serial entrepreneur for the last almost 20 years. I also plan on spouting off with my views on business, the economy and politics. Finally, I will keep you up to speed as to what I am up to with my latest ventures (within the confines of the law in the case of any publicly traded situations).
Blogging has become ubiquitous. Everyone is doing it in the US. Canadians, at least Canadian journalists and political junkies, have jumped on the bandwagon. Corporate blogging and blogging by CEOs has not really caught on in the Great White North. While I am not currently the CEO of a company, other than my own advisory business, I have quite a bit of experience as a CEO and I currently work with a handful of CEOs of fast growth companies as I help them in their quest to take their companies to the next level. Its time for me to take the plunge and to become a blogger, perhaps as a way to inspire other entrepreneurs to do so.
Right now only one of my CEO clients or former clients are blogging. Razor Suleman's company I Love Rewards Inc. has a corporate blog. Razor, as CEO, is one of a number of authorized bloggers. The purpose of their blog is to:
- provide greater public awareness of their brand
- get external feedback about the things they do
- give their employees the ability to tell their story
They chose an initial roster of 7 authorized authors (including Razor), representing their vision committees. They implemented a policy document after studying examples from other well known companies such as Google. And then they got going - http://www.iloverewards.com/blog/.
Frankly, I was initially a little nervous about I Love Rewards blogging. What would people say? What would the comments be? Would a disgruntled employee air dirty laundry? Ten months later the I Love Rewards blog has been a great success.
Because of its success and my own exposure to blogging, I am moving into the blogosphere myself. Wish me luck.
Please read my upcoming column in Profit Magazine on blogging. I hope my column and my blogging will inspire you to start your own CEO or corporate blog. In any event, I invite you to comment on my blogs or columns right here in my blog.
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