A very warm welcome to our latest blog . Today’s blog is the first part of three blogs that explore the different solutions that ambitious entrepreneurs use to accelerate the growth of their businesses.
Revenue & Margin Drivers
For the entrepreneurs with a business in the JUMP or FLY phases the attractions of scaling both revenues and margins are hugely appealing.
Typically businesses in this accelerated growth phase (JUMP) will enjoy consistent annual revenue growth rates well in excess of 20% allowing the company far greater resources to either re-invest in further growth initiatives e.g. enhanced sales & marketing activities, new product development, higher calibre staff, more staff, better systems etc…. or alternatively, invest in new ventures be they in the form of product diversification or possibly even acquisition.
These accelerated revenue rates are characteristically driven by focusing on some or all of the following growth strategies, namely;
- Increased Market Penetration
- Developing New Markets
- Developing New Products
Similarly, by focusing on the key profit drivers such as price, variable costs, fixed costs and sales volumes and developing strategies to improve each of them, organisations within the JUMP phase will, by working with us, typically improve margins so as to enjoy gross margins of up to 70% and net margins often in excess of 20%.
Again these improvements consequently provide greatly improved financial resources for both the business and the business’ owners alike.
In the case of the latter, this invariably provides the capacity for significantly enhanced drawings/ dividends, pension contributions, and other personal investment opportunities.
By working alongside businesses in the JUMP and FLY phases we would also expect to see significant, and in many cases rapid, cashflow improvements.
By developing aggressive strategies to improve the key drivers of a scale-up organisation’s cashflow we typically find ourselves focusing on key areas such as;
- Accounts Receivable Days
- Accounts Payable Days
- Work In Progress Days
- Price Change Percentages
- Revenue Growth Percentages
- Cost of Goods Sold Percentages
- Overhead Percentages
- Payment terms and business T&C
Commercially this leads to significantly improved cash reserves and allows the business to further accelerate its growth plans by exploiting high value, high margin opportunities alongside otherwise out of reach strategic investment opportunities.
As with the increased revenues and margins that typify these JUMP and FLY phases the significant growth in cashflow also allows entrepreneurs to take enhanced personal rewards from the business or simply benefit from the ever increasing asset value within the business itself at a later date.
Asset Value Drivers
In addition to driving rates of growth in short term revenue, margin and working capital successful entrepreneurs within the JUMP and FLY phases will typically be concerned with increasing the overall asset value of the organisation and their shareholding as well.
Successful entrepreneurs typically see the biggest wins in this area by focusing on the key drivers of asset value, namely;
- The organisation’s overall financial performance
- The organisation’s strategic planning and ability to scale-up
- The strength of the organisation’s cashflow position
- The organisation’s market position, USP’s, and intellectual property
- The organisation’s contracted and/or recurring revenues
- The organisation’s Net Promoter Score
- The organisation’s reliance on key customers, suppliers and staff
- The organisation’s reliance on the founder/shareholders
The net result for ambitious entrepreneurs working with us whilst in a JUMP or FLY phase is that they can expect to see operating profits increase by a multiple of 3 or 4 times over a 3-4 year period whilst it’s even more realistic with the right level of focus and commitment to see asset value rise for the organisation by well in excess of 10 fold!
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Whilst many entrepreneurs develop their organisations to a point where they’re ready to exploit the JUMP phase it’s a very small minority (less than 4%) that ever manage to really unlock that true potential and enjoy the considerable financial and personal benefits brought about by successfully scaling a business.
Similarly, as entrepreneurs enter the FLY phase with a view to exiting their business it’s worth remembering that in the UK, industry estimates suggest that less than 11% of businesses listed for sale in any given year actually sell and the percentage that is sold in line with the seller’s expectations of value is smaller still.
In summary – very few ambitious entrepreneurs achieve either of the above outcomes and even fewer still achieve it without the help of an experienced coach/mentor.
Today – it’s widely accepted by successful entrepreneurs committed to scaling and exiting their businesses that there are considerable benefits (financially, emotionally and personally) from investing in help and support from an experienced third-party with a proven track record of success.
Consequently – the quickest, smartest and most practical way of unlocking your business’ scale-up potential and/or maximising your business’ asset value prior to its sale is to invest in hands-on support from an experienced business coaching firm with a demonstrable track record of helping its clients do exactly that!
If you are ready to make that important decision to JUMP and scale your business then you will need the help of an experienced entrepreneur and executive coach so you can benefit from all of their knowledge, strategic and operational expertise along with their hands-on practical support and advice, accountability, challenge and objectivity.
Why Not try Our
Understand what stage your business is currently at, and get a bespoke report that will help you take it to the next level!
As businesses grow, they invariably face some very specific challenges. Understanding how best to address them, in what order, whilst also identifying the opportunities associated with these challenges is a critical part of unlocking your business’ true potential.
Together you’ll implement systems and processes, develop and/or hire some of the very best talents to drive your organisation’s growth even harder, whilst building your own knowledge and expertise in order to accelerate your growth from a revenue, margin and ultimately an asset value perspective.
This fundamental shift from a profit-first orientation to more of an asset creation approach will not only fuel your business’ current growth rates, its future trading capabilities and value but also your personal wealth, resulting in greater financial freedom, greater control over your own destiny, the ability to spend more time doing the things you enjoy and an overarching sense of fulfilment and achievement.
As one of the UK’s scale-up organisations, you’ll join an exclusive group of businesses that continue to enjoy annual revenue increases well in excess of 20%. We will help you increase your annual operating profits at a similar rate alongside increasing your asset value by increasing scale well in excess of 50% year after year.
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Why not get in touch with the team today? We’d love to hear from you!
We’re truly passionate about supporting business owners like you overcome your challenges and unlock the true potential of your business. If you’re looking to drive your business forward, get in touch today!
Equally, by successfully working together with your coach you will be able to develop the appropriate FLY strategies that in turn will maximise your organisation’s value ahead of a successful sale, thus enabling your personal wealth to be greater than it has ever been and as a result of this financial freedom, you will enjoy unparalleled opportunities.
We hope that you’ve found today’s blog useful and informative. DON’T MISS the second part of this mini series where we look at some further solutions that ambitious entrepreneurs increasingly use to accelerate the growth of their businesses.