Growth Companies

Highlights - Growth Companies

Growing companies face many challenges:

growth outpacing their founders' and employees' expertise
lack of capital
lack of scalable operating processes
lack of financial controls
no system for evaluating and prioritizing investments in people, software and equipment
too many competing opportunities with no means of evaluating each opportunity's potential contribution to the value of the business
insufficient financial data and key performance indicators (KPI)
too many risks in the business model

I have had the privilege of working with CEOs of many growing companies and have helped address a number of challenges.

Erecting Competitive Barriers

This client had significant gross margins on its products but very low barriers to entry for competitors. It was only a matter of time before profit margins began declining. I encouraged the founders to engage in a strategic planning process whereby we review the company’s business model and value creation strategies. During that process, I suggested that the founders evaluate adding some creative design elements to what was otherwise a commodity oriented product. The product now stands out from its competition and the company is able to maintain its premium pricing. Moreover, at a strategic level, the company has migrated from selling “copy cat” products to establishing a platform for further innovation.

Leading Organizational Change

This client was functioning at breakeven and with little available capital. Financial statements were late and wrong. People worked in silos and didn’t communicate with each other well. The company had great potential, but wasn’t performing well.

I met with the founders, understood their goals, analyzed the situation and suggested a number of changes to the company’s founders:

Replace the controller.
Instill a culture of scaling through cross functional communication, continuous process improvement and monitoring key metrics.
Analyze the profitability of each division and take steps to grow the most profitable divisions, change the business model for marginally profitable divisions and cease operations in the hopelessly unprofitable divisions.
Increase the bank line of credit.

Based on these results, the founders asked me to lead the initiatives in each of these areas. The results: changed culture, increased profitability, increased liquidity, and a solid foundation for significant revenue growth.

Obtaining Capital / Managing Cash Flows

This company had a great opportunity to quadruple its revenue from its key customer in a four month period of time. I negotiated a larger line of credit with a bank which increased the company’s advance rates, reduced their cost of funds and placed significant limits on a shareholder guarantee. I also designed and implemented a cash management and forecasting model to realize this significant growth without running out of cash.

Confirming the Gut

It’s lonely at the top – particularly for entrepreneurs in private companies without institutional equity partners. For this CEO, I provided a sounding board as he evaluated the strategic direction and operations of the company. Most of the time, I just explained why his instincts made sense from a value creation perspective. Life as a CEO was less lonely for him.

Business is Easier When You Know the Score

This client was unable to obtain accurate, timely financial data from the accounting personnel. They never really new the score. With an understanding of the business goals, I analyzed the situation and determined that the client needed to streamline certain processes, realign responsibilities in the accounting function and purchase more robust software. Using its internal resources, the client executed this plan.