Consider for a moment that 90 percent of entrepreneurial training is focused on how to start and grow a successful company from an idea to a full-fledged award winner.
Do you know how you'll scale your business from $1 million to $10 million? Or from $10 million to $100 million?
Powering a successfully growing company into the stratosphere has an entirely different set of challenges. Business leaders who face explosive growth would be wise to call on experienced and talented mentors for guidance. What, then, are the right strategic steps to reach a meteoric company's full potential and enjoy the fruits of their labors?
I recently met with a fast-growing company that was seeking funds and advice on a topic of great interest to company leaders. Their invigorating question was this: "How do we build a company that can generate $100 million in annual year-end revenues?"
As I pondered their request, I thought to myself, whether a firm is small or large, the same key drivers of hypergrowth will apply. This unusual startup, no more than five years old, had achieved double-digit year-over-year growth. It was adding new large clients on a monthly basis. A talented team of experienced and dedicated employees was executing with distinction. Word was spreading in the industry that the founder's solution was best in class. Angel investors were happily providing financial fuel to power the flourishing enterprise. Clearly, the company was well positioned to be a top-notch organization.
"Why do you need my advice?" I asked. "It doesn't look like you need my counsel."
"Well, sir, we have never had a tiger by the tail before. We've never managed something with this much upside potential. And we don't want to fail."
"All right, my friends, here's what I suggest we do together," I said. I stepped to a white board. "Let's work backwards from your goal of $100 million in sales and learn what you will need to accomplish to achieve it."
The following set of questions will be discovery in nature and will form the foundation of a forward-thinking strategy:
1. What is your annual revenue goal in five years from now?
2. What's the average selling price of the product you sell?
3. How many months does it take to sell a product from the first contact with a customer until you collect payment?
4. How many salespeople do you have?
5. How many system engineers are working today in the field to install and support your customers?
6. How many customers do you need to increase sales by $90 million?
7. How many potential targeted clients are there in the world?
8. How many new customers can a salesman close in a year?
9. How many salespeople do we need to land 360 new clients in five years?
10. In a like manner, how many SE's will you need?
11. To finance this important asset, will you need growth equity capital from investors?
12. Will there be sufficient gross margins to cover all expenses and leave earnings equal to 15 percent of revenues?
13. Can expenses be controlled and not exceed the budget?
14. Lastly, you are very talented executives, but has anyone on the team grown a business this large and this fast?
- No timeline announced yet for Cottonwood Mall...
- Kennecott hopes project will change mountain...
- Feds eye stricter rules for railroad rights...
- About Utah: A Salt Lake hit for 152 years ......
- 10 jobs you can get right now
- 3 ways insurers can still avoid covering the...
- 6 financial moves to prevent sleepless nights
- 10 things to know about corporate inversions
- 10 things to know about corporate... 32
- 3 ways insurers can still avoid... 13
- Kennecott hopes project will change... 6
- Cantwell targets small business loan... 4
- Applications for US unemployment aid... 4
- State lawmaker calling for criminal... 4
- Fallon to lead honors as Leno wins top... 2
- Eagle Mountain votes to accept Rocky... 2