Achieving profitable business growth to build your wealth is neither simple nor easy. However, by keeping focused on critical factors that ensure profits and growth, you can be successful in growing your business and building your wealth.
Here is my Growth Manifesto
Part I: Performance and Growth
- Growth Strategy – this needs to demonstrate your value and quantifiable results for your ideal customers.
- Leadership team and management succession – the stronger your team, the more powerful your business. Real managers can hire, fire, and spend money without the owner’s approval )otherwise, you’re a small business and always will be one).
- Resources – you need excess capacity in terms of financial resources, operational capacity that is scalable, and a proactive and organized sales process.
- Talent development and culture – this includes formal coaching, mentoring, training, independent learning. Most importantly, it includes celebrating failures and risk taking (within specified parameters, of course).
- Customer excellence – refers to the entire customer experience, from pre-order, to order fulfillment, to post sale and installation experience. This is where small/medium businesses can really outperform the big companies.
- Management processes – includes using a daily or weekly Flash Report to monitor—and improve—sales, production, and cash position.
Part II: Wealth Creation and Protection
- Structures – include organization, legal, tax, and operational structures.
- Governance and reporting – these are connected because if you don’t have reporting, you don’t have a method for holding people accountable. Good governance means more brains at the table for important insights and decisions.
- Valuation – all of the above factors will enhance your valuation. Valuation is typically based on multiples of earnings or gross revenues, multiplied by an earnings multiple. You can influence both: the earnings and the multiple.
- Exit strategies – range from selling to employees and family, selling to a financial buyer, selling to a strategic buyer, or keeping and controlling from a distance.
Part III: Living and Leaving a Legacy
- It’s personal. This is about you. How are your health, family, relationships, hobbies and interests?
- Wealth protection – includes paying yourself first, creditor proofing your wealth, tax efficiency, and insurance planning.
- Leaving a legacy – what do you want your legacy to be?