The Five Essential Elements of a Growth Strategy

1. Customer Focused – It’s based on market research. You’ve got the right product, packaged in the right solution with well thought out support systems that the right target market really needs and wants and you can prove it.

2. The Company is Oriented to Performance – Your people have the kinds of conversations that lead to process improvements through respectful collaborative idea generation. Incentives are aligned to self-responsibility, authority, accountability  and ability to take risks. You provide support and training for those elements to be accessible to all.

3. You’ve Removed the Rub Points – There is a smooth communication flow from what is promised to the customer all the way from sales through order processing, production, billing, delivery and after sales support. You have a feedback loop to ensure what was expected was delivered. And you have policies that set out boundaries for the negotiables and the non-negotiables. You don’t expect your people to dance to the customer always being right (or wrong). Who to blame isn’t a daily way of life in your company: how to solve the right problem with the right solution is.

4. Your People Understand how the Company Makes Money -Sounds simple but it’s not often done. Everyone should know how their expertise and efforts contribute to the bottom line and where they fit in the financial equation. Even the receptionist and the shipper. Each person has a role to play in the efficient delivery of the promise to the customer.

5. You Focus on and Make Decisions Based on the Right Key Performance Indicators – Forward looking, gross margin driven, utilization rates, cash flow and labour tracking. Your indicators should show you where you have cash leaks in the system, before you have to start bailing. First place to look? Do your estimate gross margins on each product become your actual gross margins. Got a variance? Find out why and fix the systemic problems that cause it. (Hint - most problems are systemic, not personal, not one individual’s fault.)

8 Rules for Preparing Your Company for Sale

1. Start Planning Early - 2-4 years before shareholders or partners want to sell. It can take that long for the changes described and recommended below to be made.

2. Know what type of Investor or Buyer is Best Suited for Your Company – Want to sell to your employees? Sell to another company in your industry or part of your supply chain? Want the company to continue as a viable going concern after you leave ? All these options require a different game plan to achieve the desired goal. Understand which type of buyer/investor is right for your circumstances and how to best position the company so that this exit event occurs.

3. Put a Growth Strategy in Place Now – Despite our tough economic times, a growth strategy is imperative to being able to realize a future liquidiation event, no matter what type of buyer/investor you are targeting.

4. Recognize the Buyer/Investor is Acquiring the Future – More than ever now, they are not buying past performance, they are buying the future performance of the management team’s ability to deliver on the promise of the growth strategy. So the growth strategy has to be be well under way and producing results by the time you are ready to sell. The management team that implements this strategy are the people that will be staying with the firm after the primary shareholders leave.

5. Recognize Your Role as Owner Has Changed – If you are planning to sell, you need think of yourself now as an investor, not an owner and certainly not a manager. Your knowledge, key relationships and abilities have to be transferred to and found in your management team now, not the day after you leave.  You are not your company.

6. Deliver What You Promise – The number of companies on the market looking for exit strategies will double as boomers retire over the next ten years. Your company will have to stand out from the pack. Your company should have an outstanding solution or product offering and the financial performance in the balance sheet and income statement to prove it out. Your internal systems deliver exactly what is promised to customers in a way that makes it hassle free, unique, of high value and delivers recurring revenue. Check in with your target market. What do they think about your offering? Set up key performance indicators to manage toward the future, rather than viewing only through the rearview mirror.

7. Difficult People? Conflicted Workplace Culture? Growth and Change Will Be Almost Impossible. If you’ve got some rub points that make delivering customer value or financial performance unreliable, now is the time to deal with them , not later. If you’re struggling to change entrenched ways of working, poor performance, lack of alignment between strategy and action, then get help sorting it out. Learn how to take a different approach and get to the heart of the issues that block change, growth and ultimately profitability. There is a much better way which is far less painful.

8. Get the Right Advisors on Board – You will need an accounting group familiar with exit transactions and tax issues, a legal firm able to prepare the foundation for an acquisition so the deal goes through smoothly without skeletons jumping out at inopportune times and investment advisors to help package the company. Know who to get on board, how to find them and strategize when you bring them in.

You may need help with some of these Valuation Planning Steps. Get it sooner rather than later. For a private seminar on any or all of these topics, please contact us.