Planning for growth is something every business owner will say they do, but not all business owners will do this effectively and with a focus that will generate profitable growth.
Many businesses plan for growth, but not profitable growth. Some businesses focus on growing sales without a focus on margins while others build infrastructures to support sales and growth that never materialize.
Michael Porter said, “If your goal is anything but profitability – if it’s to be big, or to grow fast, or to become a technology leader – you’ll hit problems.”
A business must focus on profitable, scalable and sustainable activities if it is to grow. Profit and the generation of cash to re-invest in your business must be made a priority, as it is an essential part of the financial strategy and structure of a successful business. Profit and a clear business plan will create a focus and the alignment of the organization, as well as attract investors and other sources of funds to fuel growth – all of which impacts the underlying business value of the business.
CFO Centre has identified 7 Keys to Profitable Growth:
- Define your business goals & objectives
Produce a formal plan from which you can articulate a vision
- Critically review your business
Identify competitive advantage, scalability & sustainability
- Establish a financial plan
Identify milestones, KPIs & dashboards
- Create organizational alignment
Nurture your culture, hire the right people & communicate the vision
- Identify the financial resources required
- Support the business with systems & processes to optimize performance
- Measure, review, evaluate & course correct
Be proactive & prepared to be reactive
If you follow these 7 Keys and plan for profitable growth, you will ultimately:
- Improve and grow profits
- Maximize the scalability of your business
- Enhance management team and organizational structure
- Attract investors and other sources of funds
- Increase business value
To enhance the value of your business and grow successfully, follow the 7 Keys and Plan for Profitable Growth.