How to Prepare for a Growth Year
The countdown has begun. Maybe you are counting down until the elections (mercy!), or Thanksgiving (pumpkin pie, rather), or maybe even the SEC championship game (everybody’s hands go up). But we’re shifting gears to a different countdown today.
Take heed, friends: 2017 is coming in hot, and it’s time to buckle down and determine the 2017 game plan for your business.
Abraham Lincoln once said, “Give me six hours to chop down a tree and I will spend the first four sharpening the ax.” Without further ado, start your ax grinding efforts with these three questions and punch your ticket for growth in 2017.
Where Are We Today?
Any discussion around goals for tomorrow must begin with the status of today. The good news is that all the data we need should be right at our fingertips. If it isn’t, your business is in a state of emergency and you need a lifeline.
Questions to consider as you start mining the data:
Where are we from a revenue and run-rate perspective?
Is my pricing where it needs to be compared to either what the market dictates or the value that we’re delivering?
Are our gross margins aligned to industry standards? If not, where are the process inefficiencies that are creating this gap?
How’s my cash flow? Cash is king, and you must be constantly mindful of its drivers and how you can generate more.
Where Do We Want To Go Tomorrow?
With an understanding of today’s reality, you can determine where you want to be in 12 months. Approach this comprehensively and consider items from a revenue, profitability, and cash flow perspective. Perhaps 2017 is the year you beat out 96% of the companies out there and achieve $1.0mm in revenue, or 99.9+% and achieve $10.0mm in revenue. Maybe 2017 is the year cash burn comes to an end, as you plan to exit red and enter black. Either way, be specific about the goals you want to achieve and the corresponding milestones to be surpassed.
What Are The Steps We Must Take to Get There?
The fun really begins when you can take today’s reality and tomorrow’s hopes and define that road in between. It’s taking the financial data you have and making it actionable, specifying the exact game plan for reaching your goals.
Here are a few questions you might ask yourself as part of your plan:
Do I have the right resources in place to execute against this vision? If not, where are my gaps?
How do I address these gaps? Do I outsource or do I look to bring on additional FTEs?
Where will the capital come from to allow me to move forward? Will cash conversion from new revenue suffice, or do I need to look at a debt or equity infusion?
If investor capital is the answer, what are the missing pieces to my investable story – and what audience do I need to target?
The answer to these questions will help you not only define success for 2017 but take your first steps toward it. Trust us, if you go through this process now, you’ll thank yourself this time next year. So no more casting a vote of growth against your business – it’s time to get started.
And if along the way you need the data, the bandwidth or some finance gurus in your huddle, Inflammo helps startups and growing companies with questions like these every day.