NXT Ascent provides our consumer brand companies a shared resources operating platform which is normally reserved for larger, more mature companies. Here we are going to explore HOW & WHY we operate within a shared resources platform and the benefits our companies receive.
We have determined there are certain capabilities which all our brand companies will need professionalized from day one; by providing these capabilities from the portfolio level down we are ensuring our "startups" have the right processes and right infrastructure.
There are many benefits to our companies; here are a few top level:
1. Lower Expenses in early stages when cash is a scarce & the most valuable resource
2. Access to full human capital resources; a benefit most startups don't enjoy
3. Standardize certain services throughout the brand companies for reliable, optimized and consistent process deployment.
4. Eliminate / decrease duplication across brand company silos
5. Greater economies of scale across the portfolio
6. Increased productivity
7. Processes & full infrastructure for our brand company Presidents from day one
When we validate an idea & determine that a company should exist, we move it to our "Create" phase where we efficiently move the company towards deployment. Once a company enters the "Create" phase, we hire a President for the company and the shared resources platform kicks in. Our shared services are focused on: Finance; Operations; Product Development; Human Resources; Tech, Growth and business infrastructure.
Our shared resources platform is structured to act as an internal vendor / service provider to our brand companies by providing process & infrastructure in the early stages of the brand. The shared services team is not designed to make a big $ profit, rather take the total cost and invoice down to the individual companies based on allocation metrics.
Each shared team has a leader who will build their team based on resources needed across the portfolio. These teams take a portfolio down approach, meaning they build processes & infrastructure in the best interest of the entire portfolio and then modify for individual brand company needs. Our model allows us the luxury to build scaleable infrastructure from day one—since the expense will be shared across multiple brand companies we can afford to hire the best talent, utilize software not available to most startups and generally add-on vs replace as we scale.
Learning from any individual brand can be quickly deployed across other brands. Over time as the brand scales, it could be less reliant on certain shared services and determine it is better to manage these activities within a centralized service.
By combining our shared resources operating platform and brand creation process with a brand vision, we can increase performance of our brand companies that accelerates profitable growth to a loyal, engaged consumer.
To give you a real life example; here is how our shared resources finance team, lead by the Chief Financial Officer acts as a partner to the brand President and provides full financial services support to the individual companies:
• Built out, scalable financial platform system, integrating with inventory, CRM and all other data collection and measurement systems. This system is provided to each individual company with pre-established chart of accounts, budgets, etc.
• Top level management of banking relationships, account structures and pre-negotiated lines of credit for inventory.
• Full financial modeling, including forecasting financial targets for the brand companies. Management of monthly reporting and accountability metrics for actuals vs forecast.
• A leading role in the development of the company strategy and setting the key performance indicators for the business.
• Own business performance evaluation and management through weekly KPI accountability and monthly financial reporting.
• Assist in determining areas where the business should expand or trim for future growth & profitability with an eye on maximizing exit value.
• Assess the benefits and disadvantages of alternative distribution channels for each portfolio company and make recommendation tied to predictive growth models.
• Analyze market categories for further brand expansion & develop predictive models for growth within these markets.
• Control and evaluate the organization’s future fundraising plans and capital structure.
• Ensure cash flow is appropriate for the company’s operations.
• Set finance control framework (policies and standards) and ensure compliance with GAAP and company policies.
• Manage external accountants, financial infrastructure relationships and interaction with investors.
• Fulfill AR/AP and all accounting needs