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, or in our case, a corporate financial adviser.  Regardless how good the CEO is, everyone at some point loses the forest for the trees.   The day to day details over whelm the executive’s ability to cast vision and execute beyond what they see today.

One of our clients had plateaued for 5 years between $10-12 million in annual revenues.  Now 18 months later this company’s LTM revenues exceed $18 million.  It would take a long time to discuss exactly how this was accomplished, but if we boil it down to the bare essence of the change it was a recast vision, a capital plan to implement the vision and the shared experience of the CEO and our firm to execute.  This company should easily do $20 million in 2014 and $25m+ in 2015.

Let us know if you want to discuss your situation.