If you go to the airport but are not clear on where you want to go, any airplane will get you there. If you grow your company but are not clear on where you want to end up, any client prospect will take you there.
2009 was a wakeup call. A very challenging economy made it painfully clear that all growth is not the same.
Mic saw the revenue of his custom machinery company drop from $10million to $5million in 1 year in 2009 because he took the lazy path and accepted growth that came to him: I call that Reactive growth.
In contrast, Tina saw the revenue of her water management company increase from $9million to $10.5million with escalating profits to 10% because her passion guided her decisions. I call this Proactive growth.
What is the difference?
Proactive growth is passion-driven, translated into a set of financials out in the future.
Reactive growth is opportunistic.
A fast way to identify your proactive growth goal is to imagine you won the lottery and have all the cash you want to grow as you see fit. What does your company look like 10 years in the future? What is the revenue and EBIT? Don’t confuse this process with strategic planning which is about HOW to execute.
Proactive growth is clarity about WHERE you want to go.
10 years might seem like a long way, but by asking yourself the 10 year question, you liberate your entrepreneurial genius which works best absent the constraints we impose on it daily: not enough time, talent, money. 10 years lets you peer into the future.
When did you decide on your career? I bet it was not yesterday! You likely declared your career early, then made all kinds of decisions day in and day out about the education you needed, who you needed to meet and what you needed to do as you tweaked what has become your career today. So it is with your company’s future. The future cannot be analyzed. The future is full of possibilities. Your job as a business builder is to convert your potential into profitable reality. Let passion guide you.
Just like building a house, you need to decide up front, weather you are building a one family home – that’s like a family business, or an apartment building – that’s like a regional business, or are you building a sky scraper – that’s a global company.
Once you have your 10-year revenue in focus, move the promise of your future into the present. Where must your revenue and EBIT be in 5 years to be on track to achieve your 10-year goal? And again: where must your revenue and EBIT be in 3 years 2 year , and now 1 year, to be on track to achieve your 10-year goal? Only now you are clear on what you need to do in the next 10 minutes! That means you are always moving toward your goal. Here is the key; this 10-year game plan is your Optimum Growth Strategy; it is doing what you do better than anyone else, fueled as you know it needs to be. Anything else is sub-optimal- translate MORE risky. Pursuing your Optimum Growth Strategy is SAFE growth. Your Optimum Growth Strategy is the ONLY strategy that delivers the highest return with the lowest risk.
Passion-driven growth is not a luxury; it’s a necessity for safety in a fast changing world.
Any other growth can kill your company.
Mic forgot his passion in the midst of peak sales in 2008, which earned him status as an Inc 5000 company (a ranking of the fastest growing private companies in America). At the time he did not realize his aggressive revenue growth was reactive growth; He had become an order-taker in a robust economy with a tide that lifted all boats. He was too busy with all those sales to focus on his passion.
Proactive growth would have been better positioned his company to weather the devastation of the 2009 market crash. Pursuing his passion would have guided him to seek out prospects in aerospace and add a service leg for recurring cash flow. As it turned out, he had too many clients in the automotive sector which did not survive and insufficient R&D to address the pain of new client prospects in additional industries. He forgot to focus on his goal of $25 million with 30% profits as the leader across multiple market niches. Mic suffered the pain of reactive growth which was killing his company.
Some entrepreneurs slide into reactive growth because of limited cash, but Mic has access to plenty of cash. Anyone can lose sight of their passion and the results are devastating. Reactive growth is bad growth.
Some entrepreneurs are just too embarrassed to share their passion of the future: “People will think I’m delusionary”. Not Tina. Tina relished the opportunity to tell her clients, prospects, vendors and employees about her goal to be a $100 million player as a leader in her industry. Despite the fact she was only a small player among much larger competitors, Tina focused on her 10 year Optimum Growth Strategy such that what she did every day was consistent with her goal. Her passion translated into priorities she pursed in good economies and bad ones–and included adding sophisticated management depth, investing in infrastructure and making new international partnerships. Tina was rewarded in 2009 with both escalating revenue and profits while many companies in her sector took a nose dive. Passion and your ability to change the future is what makes you unique as a business builder.
Passion-driven growth is safe because it is unique. A future only you can create.
The value of anything that is unique may go down, but not anywhere as low as that which is not unique.
A Rembrandt or a Picasso is unique and has value because of its scarcity. Uniqueness holds its value.
Better yet, pursuing your passion-driven growth to create a unique future gives you the means to pay for that future. What is unique is rare. What is rare is valuable. Your future is a valuable currency. Use your future as the valuable currency it is. So go ahead. Make a difference in your marketplace. Make a difference in the world. Have fun as you build your business because there is currency in your Passion! Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Let us help you become a magnet for non equity and equity sources to fuel your growth. Please explore our tools, solutions and consulting options tailored for different growth stages and different budgets:
www.CashAndControl.com
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