5-2-50 will be focusing on businesses of approximately 5 people who have been running for 3 years or more, and who have a strong appetite for growth. We are focusing on this niche market for a few specific reasons:
Less risk than investing in Startups
The greatest risk in business is at the start-up phase. It is almost impossible to tell whether the team or individual that could build an awesome business plan, will be able to actually build a sustainable business from it. However, if an organization has been able to survive for a few years, and it has been able to pay salaries during those years, at least regularly enough to maintain a small core of dedicated people to keep it running, then the model and the team has proven their ability to sustain something.
A niche where the constraints are relatively similar
These organizations generally run on very tight budgets, giving them precious little extra capital for expansion, precious little time for training, and precious little money to pay for development of the team that is running the business.
By investing some funds and development into these organizations with the very specific purpose of helping them build, fund, and execute a growth strategy, their potential for growth can be unleashed. By choosing a niche size of organization to focus on, the strategy for growth can be refined and developed to become increasingly effective, increasing the speed and success rate.
Businesses with a desire for growth
Part of the selection criteria mentioned above is to find businesses where there is an explicit desire for growth. This desire is the starting point of the development, and the development and funding activities are aimed at helping build the skills, whilst removing the obstacles and responsibly providing the resources to accelerate that growth.
Funds and development refers to combining financial investment with an investment in the development of the team that is running the organization. The development is done through interventions that are specific to organizations of this size, where skills are transferred through practically working with the team on activities that are most appropriate for where they are at, at the time, to grow into their next phase. These activities are then accompanied with appropriate sized investments to support those activities.
With the vast amount of management and leadership knowledge and theory out there, it can be challenging to know what skills to transfer.
Over the past twenty years, a series of management interventions under the umbrella of Theory of Constraints, have created the first consistent stream of results since the concept of scientific management was developed. Specific applications have brought results unheard of before in production management, project management, supply chain and logistics, strategy development and execution, and others. These skills do not take years to transfer but are all based on a set of relatively easy to teach and learn thinking processes. One independent academic study investigated a hundred randomly chosen TOC implementations and found not a single one that did not deliver significant bottom line improvements to their organizations within months.
The TOC thinking processes give people the tools to map and visualize the cause and effect relationships in their environments, to create a clear and visual understanding of why their business does what it does, and how to change it. It also gives them the ability to understand the bigger system that their business operates in, allowing simple, clear, logical connections between the market and the internal business environment. The skills transferred therefore focus on these concepts, and the practical skills needed to build and grow businesses.
5-2-50 will continually be running campaigns and reaching out to develop a broad network of investors. We will gain an understanding of the investors’ investment preferences, to ensure that when we recommend a client to a specific investor, there is a good match.
Organizations face different challenges as they grow. 5-2-50 will develop very specific interventions aimed at the process of helping these businesses grow; continually building knowledge and refining the interventions related to the typical challenges faced by organizations of this size. Once 5-2-50 is well established, the vision is to launch a next program called 50–2–500, which will run a similar program to help selected companies expand from around 50, to around 500 employees.
If we have not answered your question, please contact us, and we will answer your question, and over time possibly add it to the FAQ page.