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The Roadmap to Bigger Revenues – Avoid the Pitfalls

by on March 6, 2014

Roadmap

There are four types of companies:

  1. Those that fail
  2. Those that innovate, capitalize, and grow
  3. Those that get acquired
  4. The ZOMBIE companies

Zombie companies are growing slowly (if at all), their revenues have stagnated, they make enough profit to survive but not enough to raise any significant amount of capital or to make them attractive to any potential acquirer or to justify going public.

Thriving vs. Obliterated

What is the difference between thriving companies and the obliterated?  How do you avoid the pitfall of becoming a zombie company?

Companies that thrive have specific traits.  Companies that thrive continue to innovate, capitalize, and grow.  They don’t blame the market because the market is the same for everyone.  Thriving companies look at the market as a puzzle and find ways to make it work, constantly looking for new ways to succeed.  Thriving companies look internally to see if they can do better.  If a specific skill set is required they find the people with the right pedigree. Thriving companies address several corporate fundamentals once and monetize the efficiency.

Growth starts internally

The Executive team needs to be solid, from the Chairman and CEO on down.  The CEO needs to be aggressive and smart enough to know to surround himself with the right people to be successful. Although it’s necessary to have chemistry, it is vital to bring in people with different backgrounds and skill sets.

That starts with putting together a solid Board of Directors (BOD).  The members of the BOD should be candidates that provide leadership and skills in legal, financial and industry knowledge, and numerous connections. Each BOD member needs to be a visionary because, as stated in a recent article by McKinsey titled Building a Forward Looking Board, “Boards need to look further out than anyone else in the company.”

For VC backed companies the BOD will include the VC.  Pick the VC carefully and look past just the partner championing the company because that partner could leave the firm.

The Advisory Board (AB) needs to be just as strong as the BOD.  AB members are often the workhorses of the company because they provide specific services for the BOD members.  Advisory board members should be people that can help the CEO learn and grow. It is useless to have an advisory board filled with people who will simply agree with whatever the CEO says or fail to open doors.

Accelerated Growth

Solid growth occurs through strategic alliances and networks created by that strong foundation.  Accelerated growth often includes M&A because when it comes to growth, acquisitions are the fastest game in town.

BrownIT

A perfect example of a company utilizing this roadmap to bigger revenues is BrownIT.  BrownIT is a provider of information technology solutions and services to the federal government healthcare. BrownIT has over a decade of experience in the healthcare industry and maintains a very secure foundation.

Mark Brown, the founder and CEO, is humble yet ambitious. Brown is striving to break the company past its potential and be a meaningful player in the marketplace. Mark Brown, a natural leader, states that, “BrownIT will be the beacon of the industry; the one that competitors compare themselves to.”  Yet vision alone is not enough, it must be accompanied by action.  Brown has committed to surrounding himself with a strong BOD and AB, aligning BrownIT with some exceptional outside talent to craft and implement the growth strategy they’re creating together.

M&A

A central theme to the strategy is growth through acquisitions.  Brown understands that to be a thriving company and avoid being a zombie company he needs to lay a solid foundation for growth by having the right people around him to develop a sound strategy that includes M&A.

In the near future someone will wonder ‘who is this lionheart company that came out of left field?’  The answer lays in the foundation work that turned Brown’s vision for BrownIT into reality.

p.s.

If you’re wondering how you build a company that you can sell for a premium in a few years, contact me to discuss the Valuation Amplification Process.

I also invite you to download the white paper and learn the 5 step process on How to Quickly Increase Your Valuation: a Proven 5 Step Process.  http://www.therevenuegroup.net/free-offer.html

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One Comment
  1. Insightful article. You can usually spot the zombie companies from their websites… It’s such an interesting time in marketing. Thoughtful, creative and human communications are rewarded while anything that looks like programmed thinking really falls flat.

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