Funding: Taking the planned approach
A good number of our clients and organisations we are introduced to fall into the category of “high growth’ businesses or ‘Gazelles’.By Paul Spencer, director, Haworths Chartered Accountants.These high growth businesses are, according to the OECD, businesses of 10 or more employees where either turnover, or the number of people employed increases by at least 20 per cent year on year for a minimum of three years.
As discussed elsewhere in this feature, you are masters of your own destiny and we really believe that most business growth doesn’t happen by sheer chance, it is always planned.If it does happen by luck, it is usually uncontrolled growth and invariably is unsustainable. Having regular strategic reviews of your business is key to understanding where your business may have opportunities for growth.
Recently we engaged with a client who had generated through strategic planning, year on year growth of double the OECD definition – some 40 per cent.They had done a great job in really understanding their market and exploiting a joined-up plan to corner their market with great products that were well priced, high in quality and low in lead time – a real winning formula.
When we attended a business review with them we realised instantly that although they were doing really well, it was obvious that they operated in a niche market.There was only so much traction they could get before the market was saturated. Acting on our advice the client developed plans to move into similar associated markets with a new product range that employed similar skills to those already in house.
This market was attacked with the same regard for innovation and world class manufacturing as the company’s original remit.They now have new products and are fast getting traction in their new market – very profitably.
Please take time to step back from your business and review where you are going.If necessary bring in professional advisers to help you do this – an expert unbiased opinion is often really helpful to ‘see the wood for the trees’. And once you have a plan, make sure the numbers stack up to support what you want to do and make sure you do it profitably with sufficient cash.