Growing Your Business
Every for-profit business has a growth plan. However, most plans are not documented or defined. Many businesses merely react to specific events, such as the growth of a particular customer or winning a large order. While these events are certainly welcome, they can ultimately have a downside to the growth of the business if they are not in line with the strategic vision of the business. It is critical to grow your business on your terms and ensure the process is well managed. When deciding how to grow your business, you will likely want answers to many questions, including:
- What is the profit potential of my business?
- How do I step back from day-to-day operations?
- How do I know if decisions we make today will create long-term value?
- How do I get my employees to think and act like owners?
- How do I understand the risk vs. reward of opportunities?
Our services, specific to the needs of a growing business, are detailed below.
In order to grow your business successfully, it is vital to have a plan with objective, measurable targets and steps to achieve them. A good plan will include operational, financial, accounting, human resources and other elements. We have facilitated many strategy sessions with our clients in order to guide them through this process, from half-day meetings to multi-day off site retreats. Ultimately, you will come away from this exercise with an actionable plan to proactively grow your business.
Many businesses focus on top line growth, expecting that bottom line results will follow. Unfortunately, this is not always the case. Many times businesses grow revenues but fail to maximize gains when it comes to the bottom line. Creating a financial model allows us to demonstrate the potential results on net income and cash flow by performing a “what-if” analysis on an array of variables. These variables may include days sales outstanding, inventory turns, staffing levels, pricing changes, volume fluctuations, etc.
Developing Critical Success Factors (CSFs)
Critical Success Factors are the overriding metrics of your business. They are designed to enable a business owner to step back from day-to-day operations and manage the business by looking at key data points. We can help you identify the CSFs in your business that will enable you to focus on a more strategic level and produce the results you dreamed about when you originally started your business.
Overall business value, which includes exit price, is created by certain attributes of the business, including customers, market share, products, employees, systems, etc. Understanding what these attributes, which we call value drivers, are for your business is vital to understanding its long-term value. A Business Scorecard is a great way to monitor these value drivers over time to ensure you focus your efforts in the right area to build long-term value.
Employee Incentive Plans
Thinking and acting like a business owner requires a skill set that is not always found in employees. As a result, it can be difficult for your employees to have the same passion, drive and focus as you. How do you align employee goals with your own to drive the profitability of your business? One way is to implement an incentive plan that rewards employees for building the business in the way you want it to grow. These plans can come in many different forms, which can be tailored to your unique situation.
An employee incentive plan can also be a first step in positioning employees to buy your business in the future.
As a business grows, it becomes more important to focus on future financial performance. The role of a controller is to prepare historical financial reports. However, a CFO’s role is to look into the future of the business and plan accordingly. This includes setting budgets, managing cash flow, negotiating debt and putting strong financial controls around the business. Our outsourced CFO services are designed to provide clients with the forward thinking attributes you would expect from a CFO, without the cost of hiring a full-time executive.
Please contact us to learn more about how these services can help your company.