How to manage sustainable growth

How to manage sustainable growth

How to manage sustainable growth

The differences between those that grow profitably and sustainably, and those that disappear without a trace, are usually clear. What may not be clear are the differences between the runaway success stories and those that get stuck.

Expansion for expansion’s sake is not sustainable. Deciding you want to grow by 14 or 20 percent a year means you’re chasing numbers, instead of chasing your core purpose. And if you’re not focusing on your core purpose, you will lose your way.

If a company grows at 15 percent pa, it will double in size every five years. A $10m company that grows at 25 percent pa for 12 years will have turnover of $144m. That’s a massively different company. To survive it needs to have a clear focus on what it’s doing, why – and how.

People

Everything rests on your people. If you don’t have the right people, your business will be consumed by personnel issues, making it difficult to focus on anything else.

Strategy

When revenue is not growing as you would like, or is slowing, it is time to re-address your strategy. What are you selling, who are you selling it to and where are you selling it? What is your core ideology? Why do you do what you do?

Execution

If revenue is increasing, but profit isn’t following suit, you need to look at how you’re executing your strategy. Do your annual plan, quarterly plan and personal plans align to your goals? Do they help your team align to the company’s priorities?

Cash

It may seem obvious, but too many would-be growth companies don’t have the cash they need. Growth sucks cash – will you have enough cash to grow? Cash is oxygen to a company; knowing your cash conversion cycles and improving them is vital to let your company breathe and grow.