Each week, we seek expert advice to help a small or medium-sized business overcome a key issue.
Dale Overton knows a thing or two about spinning dirt into gold. His Winnipeg-based company, Overton Environmental Enterprises Inc., creates specialized compost. Its main business is making compost tea – a form of compost steeped in water – and related products.
The company, which Mr. Overton founded in 2010, sells its Eco-Tea to some 70 golf courses across the country. Large farms have shown interest as well, Mr. Overton says. The company also sells worm castings, a compost consisting of worm manure, that it produces at a facility in Winnipeg.
On top of that, OEE is lending its expertise to U.S. agribusiness giant J.R. Simplot Co. as well as London, Ont.-based animal nutrition specialist Masterfeeds and Winnipeg horse-racing track Assiniboia Downs. These businesses produce large amounts of waste that goes into landfills, Mr. Overton explains.
"We're working with all three of these companies to transform their waste streams into a high-value compost product," he says. If OEE creates a workable system, J.R. Simplot might adopt it company-wide, Mr. Overton notes.
Wait, there's more: OEE recently teamed with three other companies on a pilot study in Saudi Arabia for the Gulf Cooperation Council Interconnection Authority. The plan is to grow a native vegetation barrier around a power substation to protect the building from windblown sand. If the project succeeds, the authority would do the same at 40 sites throughout the Middle East and North Africa, Mr. Overton says.
All of these opportunities have left the OEE director stretched thin. As a professional scientist, he has little formal business training. As a manager, he is handling everything from sales and technical support to product development and project management, he says. "I change my hat about six times a day."
With just four full-time and three part-time employees, Mr. Overton needs help building his company. What key hires should he make?
He thinks he needs a chief executive officer, a chief financial officer and a chief operating officer. He hopes to have 35 employees in five years' time.
His hiring decisions also could bring much-needed capital. "We're not opposed to bringing in people who want to have equity in the business but also bring something to the table."
Meanwhile, the clock is ticking. "My biggest worry is some of the opportunities that we're working on will expire if we don't capitalize on them," Mr. Overton says.
The Challenge: Which key employees does Overton Environmental Enterprises need to build the business?
THE EXPERTS WEIGH IN
Look for the capital and that C-level executive at the same time. Find a private equity fund or a venture capitalist who has a relationship with a bunch of guys, one of which may be appropriate to go into your shop. Or find an angel investor who has become an angel having exited another business that's got synergy or that's from a similar industry.
I don't think Mr. Overton needs to add a CFO and a CEO and a COO all at the same time. But he should probably find a CEO who has some financial acumen and can act as a part-time CFO, or a CFO who has good business acumen and can be a quasi-business leader.
I would give him great caution on going to Saudi Arabia. Why do I want to go to Saudi Arabia when I can go to Ontario or Minnesota or Alberta? There are so many better markets that aren't an ocean away. In fact, I wouldn't take on a contract anywhere outside North America. It's not as sexy, but it makes more sense to do business locally and build a domestic footprint before you start going overseas. And when it is time to go overseas, I would want to do it in partnership with a local party that becomes either an agent or you have a distribution or licensing agreement.
Neil Huff, managing director, Foresight Cleantech Accelerator Centre, Burnaby, B.C.
He really needs to decide whether he wants to be a service company, a product company or both. If it's both, he's got to put them in separate subsidiaries. Ideally he should find somebody who really knows the business development side from a product point of view in the environmental sector. Then he could bring that person on to put together his product plan and his rollout plan and his market segmentation.
For a product business, you've got to pick a product and pick a market segment and focus. He needs to bring on somebody who can look at it and say, "Okay, if we take compost to the golf course segment, what kind of business would that look like? What are some of the other sectors that we could generate a high value proposition for?"
His project business, he can bootstrap that from what he's doing. But the product business, it sounds like it could be a scalable platform kind of technology that venture capital would be interested in. So if he's looking for this product expert that could help him put together a product plan, typically these guys are also well connected in the finance industry. There are venture capital groups that focus on environmental sciences as well, but there's probably some large strategics in his business that might be interested in investing in a product company.
Glenn Johnson, founder and CEO, Endurance Wind Power Inc., Surrey, B.C.
Based on his background as a scientist, I would say the sales side and the financial side are the two most important hires Mr. Overton can make right now. But he has to prioritize – make a list of what the next six hires look like. If you go through that prioritized list, it makes it much less overwhelming and much more just execution.
Getting a good, solid financial adviser beside you is a very important first or near-first step. That doesn't need to be a CFO from a title perspective or a cost perspective, but certainly someone who has senior financial expertise. They could have been a VP of finance or even a director of finance. You want someone who has worked in small business and understands how it works. Getting a guy who has worked at a big multinational isn't going to help because they've never had to deal with the true ebbs and flows of a startup business.
I wouldn't recommend going out and hiring a bunch of recruiters who want to charge you a 30-per-cent fee. But there are people out there – retired HR experts or whatever – who would work for a reasonable wage on a contract to help you get the job posting written professionally, get it up on the right sites and then screen some of these people so you're not interviewing 15 people for one position.
THREE THINGS THE COMPANY COULD DO NOW
Hire a financial expert
This CFO type should have small-business experience.
Go for smart money
Find an investor who can also supply a C-level executive.
Decide where to focus
You may want to put a product specialist in charge of a separate subsidiary, apart from the service part of the business.
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Interviews have been edited and condensed.