Four Actions Lead to Profitable Revenue Growth
In our book “How to Grow a Business” we identify the four actions that lead to profitable revenue growth. Companies consistently adhering to these actions realize improved earnings, cash flow and valuation.
Our services support clients in executing these four actions in their core business – successfully developing new revenue growth strategies, improving sale and marketing effectiveness, optimizing pricing and rationalizing products and offerings. And when private equity firms or companies pursue new investments we assess revenue growth potential during due diligence and help develop early plans for increasing investment value. As an investment exit approaches, we help prepare for successful realization. Our unique service approaches and proprietary methodologies and tools result in highly positive outcomes.
Commercial Due Diligence: Our work addresses the typical needs of private equity firms in commercial due diligence.
- Market Assessment: market dynamics, size, growth rate, headwinds, tailwinds and competitors
- Customer Calls: assessing the strength, stickiness and trajectory of key customer relationships
.. but we also address three often overlooked but highly valuable topics
- Assessing the Target’s Commercial Capabilities (Can the company capture the opportunity in the market?)
- Stress Testing Management’s Revenue Forecast
- Defining the Greatest Growth Opportunities
100-Day Planning: For the potential private equity firm buyer, we answer 12 key questions about the business that help establish the foundation for stronger revenue growth such as: Is the business generating enough new customers? Why does the company lose customers and to whom? Is pricing effective? Should the company focus on its core or extend outside the core? Based on these answers, we help identify the most impactful set of initiatives and outline the early actions required to capture these opportunities.
Growth Strategy: For existing companies, we help define the plan for accelerating profitable revenue growth, including strategic actions and tactical improvements in execution. This plan might address opportunities inside the existing core or beyond the core and might address both organic growth and inorganic growth.
Post-merger Integration: For merging entities, we help quickly address post-merger integration issues of the commercial organizations. Early resolution of different structures, processes, systems, compensation schemes and metrics will avoid duplication of costs and minimize distracting anxiety for customers, channel partners, and commercial teams.
Commercial Effectiveness: We assess the performance of a company’s commercial organization—the sales, service, and marketing functions—and help effect improvements that increase the ability to reliably grow revenues and take market share year after year. Common improvement areas include the go-to-market model, sales processes, talent and motivation, demand and lead generation, commercial operations and management and culture.
Pricing Optimization: We diagnose the effectiveness of a company’s pricing and identify improvements that might be quick fixes, process and execution improvements and/or strategic pricing changes. These improvements often result in material improvements in margins and revenue growth. It is not uncommon to see margin improvements of 300 to 600 basis points.
Product Portfolio Revitalization: We identify reductions or expansions in a company’s product or service offerings. In some companies, the product line has expanded dramatically creating unproductive complexity in the organization. In other organizations, there might be gaps in the product line.
Exit Planning: For companies in their last year of private equity firm ownership, we develop a fact-based growth story that defines the growth runway for the new buyer. This process defines the growth path, identifies near term EBITDA improvements, and provides insight into potential strategic buyers.