CEO Advisor Newsletter June 2019
Identify Growth Opportunities
in Your Business
If the growth strategy you have implemented to meet your growth goals isn't generating the accelerated Revenue and Net Profits that meets your expectations it is time to re-assess your strategy and develop new opportunities for business growth.
Here are some methods to help you identify new growth opportunities. Start by asking yourself the right questions:
- Do you have a monthly forecast that clearly defines what your Revenue, Gross Profit Margin and Net Profit goals are?
- Do you have a strong management team and Board of Directors with the needed experience and expertise to ensure the proper growth?
- Do you have strong sales management, a clearly defined sales process, and accountability and tracking of your sales team?
- Have you achieved 25% or greater year over year growth in the last year or two?
- Is your company operating at an optimum level with Gross Profit Margin at or above industry standards, or are there factors or key personnel limiting your growth?
- Are these factors due to internal reasons or external factors?
- Could you sell more products/services to your existing customers (market penetration) and do you have an effective Account Management Program to ensure success?
- Could buyers in a different industry (market expansion) use your products/services?
- Could selling into more regions of the U.S. or internationally (geographic expansion) be the right path to accelerate your growth?
- Do you need to innovate with new products/services (product expansion), and would a build or buy strategy make more sense?
- What are the current trends affecting your industry?
- Are your products and services in line with these trends in a positive way?
- Can you adjust or develop new products/services that can exploit these trends?
- Are there any new regulations or policies affecting your business?
Perform an Internal Talent Assessment
After having answered these primary questions, you should deepen your analysis by focusing on your internal resources for growth. Try to find limiting factors for growth within your company such as slow management processes, poor management decisions, lack of accountability to achieve results timely, lack of sales management or accelerators, or a lack of access to working capital. Then, determine if you have internal talent to move into new positions or replace weak management team members to move the needle significantly in the growth of your business.
Do not hesitate to engage with professionals to help you assess your pain points and avoid a biased viewpoint that will derail progress. Outside professionals, such as a business advisor, can not only identify your issues but this person can also work with you to remedy these issues by planning, implementing and driving change in your company.
Get Started!Have conviction to hold your management team accountable for making the changes needed to accelerate growth.
- Create a Monthly Forecast and use it as your primary goals for Revenue, Gross Profit, Gross Profit Margin, Expense Budget, Net Profit and Net Profit Margin goals.
- Challenge the initial assumptions you have based your growth strategy on.
- Assess the current state of your company and personnel and ask yourself if you have what it takes to achieve your growth goals.
The Importance of Planning to Drive Value
We meet with many CEOs and business owners and we ask them critical questions about planning and managing their businesses such as:
- Does your company have quarterly planning meetings resulting in a strategic plan?
- Does your company have a clearly defined sales strategy, target markets and sales goals to maximize sales?
- Do you have a detailed marketing plan and budget to optimize leads and support sales?
- Do you have a monthly forecast and financial goals to drive your sales, gross margins and net profits?
- Do you have a culture of accountability that achieves results timely, as planned?
- Do you have a clear vision of your exit strategy?
- What do you need to achieve in order to meet the goals of your exit strategy?
- If a large company knocked on your door today, are you ready to generate the maximum value from your business?
- Every business needs to plan and execute on the plan. Unfortunately, many business owners associate planning with start-ups. As a CEO or owner of a small or mid-size business, can you afford not to plan? Do you prioritize, focus and manage your growth proactively? Are you wasting time and money due to lack of planning or are you achieving your goals on time and optimizing your sales, profits and the value of your business.
Benefits of Planning
Proactively Guide Your GrowthYour business will grow or not depending on many factors, including overall economic trends, size of your industry, growth of your industry, specific market needs, sales strategy, marketing, hard work and other factors. Businesses plan proactively to guide and accelerate their growth in order to consistently move towards defined objectives rather than just reacting to business issues and delays that occur.
StrategizeStrategy involves taking a hard look at your products and services, your core competencies, your target markets, geographic sales coverage, your customers, pricing, operations, sales and marketing. Bring in the needed expertise to ensure your strategy yields success. Strategizing may be the single most valuable thing you can do to drive sales, profits and value in your business.
Manage PrioritiesManaging people involves focus and constantly managing priorities. Allocate resources where they will generate the most profit. This includes providing direction to your management team to avoid wasting time on things that are not a priority or in your Business Plan. Work towards your company's core strengths and large opportunities and away from your weaknesses or small opportunities. Grow the company by doing the most important things according to your current needs and long-term objectives stated in your Business Plan.
AccountabilityA Plan ensures organizational responsibilities will stay on course. Accountability drives businesses forward. Assign tasks and projects that achieve your goals and hold your people accountable by conducting weekly and monthly meetings with written updates from your team.
Track ProgressWith a written Plan, you can track your progress towards goals, measure results, and better manage the business. Without a Plan, how do you tell whether or not you are moving in the right direction or measure success? Use a dashboard style reporting to track key metrics in your business and hold your management team accountable for updating the key metrics in their department on a weekly and monthly basis to share and present in management meetings.
Specific Goals, Tasks, Deadlines and BudgetsMilestones, such as achieving specific goals, major tasks, deadline and budgets, are key aspects of business planning and are critical to business success. Effective management of your people coupled with time management, sense of urgency, adherence to deadlines, staying on budget and accountability, will yield higher profits and generate significant company value.
Financial ForecastOne of the most important aspects of strategic planning is the financial forecast. A business needs to set financial goals and targets to truly measure its success and drive the business forward. Without a monthly forecast you will never optimize your business and you will settle each month on results of the past. To drive value for an optimal exit, while yielding higher profits along the way, create and fully commit to your financial forecast every month.
CEO Advisor, Inc. has the expertise, coupled with hands-on advice to help you plan, strategize, grow and succeed. Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. for a no cost initial consultation at (949) 629-2520, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.