Discerning what phase your business is in and what you need to focus on to grow it
Understand what Growth Means
Let’s consider the word growth for a moment. What does that word mean to you? For many business owners, the term growth often defaults to one of the strategic focuses.
The first is revenue. When we consider growing our businesses, our focus quickly jumps to strategic initiatives surrounding customer diversification, increased digital marketing, and the recruitment of skilled sales assassins ready to capture new opportunities.
Other business owners might challenge those revenue-focused businesses by proposing that revenue growth for the sake of revenue growth is a tireless endeavor with little reward in the end. These business owners would likely point to profits and cash flows as the accurate representation of a company’s growth ability.
In other words, it is not how much work you do but what you earn from that work that drives company growth. In both cases, these opinions are not incorrect. However, we at Cunningham & Associates understand that there is a third dimension of growth that is too often overlooked: Enterprise Value.
Unfortunately, many business owners do not consider their business’s enterprise value until they want to exit that business. At this point, it is often too late to truly impact the value they will receive for the business they have put so much time and effort into.
This blog will outline each growth dimension’s importance, starting with predictable cash flows and profits, then moving into predictable revenue growth, and concluding with predictable enterprise value.
Understand Where You Are
Understanding where you are in your journey as a business will significantly impact the strategies you deploy to reach your strategic initiatives. At Cunningham & Associates, we partner with our clients to identify your ultimate goal as a business owner.
Through discussing the long-term vision you have for yourself, we aim to create predictable value within each of the three dimensions of growth. This will ensure that you receive the most significant return when eventually considering an exit. It is important to note that it is never too early to address each stage of growth as value captured within each division should be expanded as the company continues to mature.
Most critical to this process is self-awareness.
You need to be fully aware of your personal goals relating to your business and very much aware of your organization’s strengths and weaknesses. Moreover, you need to understand how those factors create a gap between your business’s current value and the potential value. Once you have identified these factors, it all comes down to selecting your priorities and executing them. This is where C&A can help.
The first stage in the C&A Growth to Goal model is an assessment. Again, you must understand your business, goals, and gaps between where you currently are and where you want to go.
Our assessment takes into account the three dimensions of business growth as we conduct an in-depth analysis of the different drivers that impact your business’ ability to create value within each dimension. The diagram below provides an overview of each dimension and those components that maximize value at each step along the way.
The C&A Growth to Goal model can help you achieve the ultimate growth goal you’re aiming for. We look forward to continuing to provide the information you need to reach the goals of your objective. For more details on how we can help you, contact us today.