Companies primed for growth lay the twin foundations of infrastructure and knowledge, and avoid the pitfalls of undisciplined growth that can dissipate quickly. They also know that management adept at one level of business might not be right for the next, so bringing in new blood may be necessary. Here are ten ways to prepare for that eventuality.
1.

Know Your Financials: You need to know when you’re at break even and what the implications are when you’re not. Can existing cash flow carry you for the time being, will using your credit line be enough, or do you need to raise money or? Knowing the difference between cash flow and profitability is critical.
2. Know Your Outside Financing Options: Companies primed for growth know how, when and where to get outside money and what type of financing to tap. They understand the benefits and detriments of debt versus equity financing. They know the appropriate financing option at each point in the company’s life cycle, and are versed in how companies are valued and the impact of current trends on the ability to raise money.
3. Leverage Core Competencies: One key to growth is to leverage your company’s competitive advantage by developing new products or going after new markets. Deploying your abilities across geographic and product business units will help your firm achieve economies of scale and scope.
4. Focus Externally as Well as Internally: Tracking your company’s financials, operations, sales and marketing efforts is only half the story. Comparing yourself to your competition and understanding the impact of marketplace trends will give you the rest. Compile a list of factors that are important in your industry to determine the metrics by which to measure your performance. Since more information is available internally, your internal performance metrics will be different from your external.
5. Consider Non-Organic Ways to Grow: Acquisition can be an ideal way to grow, but you need to evaluate what type of company is a good fit with yours. Be precise about how the target company adds value to your enterprise and what the necessary benchmarks are to capitalize value. Make sure the acquisition target lines up with your overall business strategy and available capital.