The oldest professional collective in our sample is the Young Presidents' Organization (YPO; 214-650-4600; fees vary among chapters; international dues start at $1,000), which supports more than 7,000 presidents, CEOs, and chairpersons of companies with approximately $5 million in sales and 50 full-time employees. While its motto, "Better presidents through education and idea exchange," reinforces its commitment to education and networking, the group, according to some, is akin to a country club. To its credit, it extends programs to members' spouses. Many YPO members, once they hit 50, graduate to the World Presidents' Organization, which emphasizes public service.
The Executive Committee (TEC; 800-274-2367; annual fee is $8,400) is a 37-year-old, 3,300-member international educational group for company presidents and CEOs. Chapters offer one-on-one coaching; seminars with world-famous speakers and consultants; and daylong executive sessions at which members have their most gut-wrenching management problems solved (usually) by 14 peers, with the help of a facilitator. Steve Ashton, CEO of photo-image printer Ashton Photo, in Salem, Oreg., and a TEC member since 1988, remembers the meeting at which he shared his financials. "Deciding which growth path the company should take was difficult. Luckily, I wound up with a consensus. You can't beat the feedback; it's wonderfully candid."
The Center for Entrepreneurial Management's Chief Executive Officers' Club (212-633-0060; dues begin at $1,000 annually) is open to CEOs of all ages as long as they're nominated by a current member and run companies with at least $2 million in revenues. Its 400 members, scattered among nine cities, hear influential speakers and exchange company and personal information behind closed doors.
If those organizations don't appeal to you, hunt down local support networks. Many are listed in the yellow pages; others you'll hear about from fellow members of your trade associations. Of course, you needn't limit yourself to your industry's associations: your business problems will, we can assure you, be shared by members of the thousands of groups you'll find listed in library copies of National Trade and Professional Associations of the United States or State and Regional Associations of the United States (both from Columbia Books, in Washington, D.C.) and Encyclopedia of Associations (Gale Research).
Don't ease up in your search for the perfect networking group. Ashton Photo's Steve Ashton met many like-minded, noncompeting company execs through his local chamber of commerce. His active role at the chamber led him to his local economic-development board, where he's now exposed to a larger pool of potential confidants. Alternatively, you could visit CEOs at their own companies; phone friends and business associates; and tap the Lions and Rotary Clubs and the Jaycees. "I used to get a lot out of service clubs and political parties," says Bill Trimble, president of Apex Resorts, based in Vancouver, British Columbia. "Now I turn to YEO and my wife."
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Reputable Reps
We're an environmental start-up, and we're thinking of hiring manufacturers' reps who typically sell to engineering companies. How can we be sure this is the best way to build our business? Where can we locate reputable reps?
Bob Johnson
President
Wastewater Services
Waterville, Maine
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You can't be sure that using reps is the most efficient route until you've taken a hard look at your cost and control issues. Sales and marketing consultant Ed Bobrow of New York City says that once you've stated your sales goals -- what product lines you want to sell, to which industry segments, at what price, and with what profit -- you have to figure out how much marketing control you'll need to achieve those goals. To help you think those things through, Bobrow recommends a comprehensive how-to book: Harold Novick's Selling Through Independent Reps (AMACOM, 800-262-9699, 1994, $69.95).
Bobrow urges you to research the sales customs and practices of your industry, noting when reps work and when they don't and why. "I call on some large engineering firms, and it takes a lot of effort. A rep could starve trying to make the right connections. In this business, I've never seen one person in charge of everything," says Gene Witte, a former rep and now the marketing director for Environmental Operations, an environmental consulting and remediation business in St. Louis. "Often these marketing departments are staffed with people with master's degrees in hydrogeology." Witte hopes you've at least hired such a knowledgeable person as sales director.
John Grant, president of the Berlin Group, a marketing consultancy in Hudson, Mass., offers an exercise to help you figure out how economical each selling method -- using reps or hiring full-time sales staff -- is. First, all things being equal, you should pinpoint the sales level at which both methods would cost you the same amount. Let's say that at sales of $500,000 in a specific territory, it would cost you $60,000 to support either a full-timer or a rep. (Here, the full-timer might receive $40,000 in compensation, and you'd have to pay $10,000 for technical support and another $10,000 for travel and entertainment expenses. For the rep, you'd pay a 10% commission, or $50,000, and $10,000 for technical support.)
Now compare your actual sales projection with that break-even point. If expected territory sales are less than $500,000, reps make economic sense because of their fixed cost-to-sales ratio. But if business booms and sales surpass $500,000, you'd probably want to go with a full-timer. When using this model, Grant recommends that you factor in every sales cost imaginable -- the basics listed above, plus vacations, personnel-turnover costs, paperwork, taxes, training, and any other costs that are unique to either method.
If you've decided on reps, you might generate a list of recommended agencies to set up informational meetings with potential customers in hot territories, noncompeting companies in your industry, and manufacturers with similar products. If you come up short, contact the Manufacturers' Agents National Association (MANA; 714- 859-4040) for its annual Directory of Manufacturers' Sales Agencies ($85, which includes a year's subscription to Agency Sales magazine -- a good place to advertise). The directory covers nearly 8,000 agencies, providing contact names, product lines, the number of salespeople each has, the territories covered, and more. For tips on finding the perfect agency, read MANA's special reports "How to Work Successfully with Manufacturers' Agencies" ($10) and "Will Using Independent Sales Agents Meet Your (Clients') Sales Goals?" ($5). n
-- Reported by Karen E. Carney
