No Growth to Doubling Revenue in 2 Years – Case Study

In October 2012, we began to advise a $12 million company that hadn’t grown in 5 years. It was a good company, producing about 15% EBITDA margins and well over $1 million annually in free cash flow. We had known the CEO for several years and knew he was about three years away from wanting to sell his business and retire. “How about if we double or triple your business before we sell it?”, I asked. He thought I was on some illegal substance – but not so. After talking further, we were retained to help him create a growth plan, to determine what capital was needed and to find the capital. Result? October 2014, LTM revenue is in excess of $23 million. By doubling revenues, margins have improved slightly, and the equity value of his business (he owns 100%) has more than tripled. CEOs – good CEOs – often get into the weeds of a business that the big picture is lost. This CEO didn’t think it was possible to grow his business – he was a “one armed paper hanger”. Sometimes growth just needs vision – and the right set of contacts. I’ve spent the last 23 years …

Taking a Good Company to New Records

Corporate growth, in some ways, is an art form.   How does the CEO balance growth with capital, human resources, and capital resources while constantly reacting to changes in the company’s industry and the day to day struggles of business? In smaller companies (under $10-20 million), most often the CEO plays all roles in trying to maintain the proper balance.  But also most smaller company CEOs are critical to the marketing of the company’s products and services. Larger companies tend to delegate more.  Experienced CFOs supplement a controller and treasury function and can be of extraordinary benefit to assisting the CEO in determining the right balance of corporate strengths and assets. Yet in the life of virtually every company comes a time when stagnation occurs.  Revenues or profitability plateau.  It’s like the body builder who plateaus at 200 pounds, and it appears that nothing can get him to 220.  I’ve seen this happen with $2 million companies and with $500 million companies.  But most of the time it is most seriously encountered with companies in the $5-50 million range. So what breaks the plateau?  Most of time time it is an outside influence.  It might be an accountant or a lawyer, …