HOW TO IMPROVE COMPANY VALUE: BUSINESS GROWTH

Growth is a powerful lever for improving company value. This should be self-evident. Simply put, a growing stream of cash is worth more than if it were constant or shrinking. In fact, a rough rule of thumb says that doubling growth rate doubles company value. Assuming you are now sufficiently converted to the pursuit of growth, how do you go about driving growth?

Driving growth requires time, motivation, and resources. The best way to manage for business growth is to assign an individual or team to focus on it, free up necessary resources, set goals and incentives, and hold the team accountable. Good ideas will never materialize without proper growth management in place.

Once your highly motivated and skilled team is ready to embark on their mission, looking at your products and customer is a good place to start.
• Sell more of your current products to your current customers. This is low risk because you already know you can do it successfully and profitably. It can also help you grow very fast. If you know that you are not the sole supplier to a customer, simply meet with them and start an open dialog about growth. Be open to making changes that will benefit the customer in exchange for a larger share of volume. If you have many customers, you can have similar dialogs with a small sample of customers and then apply learnings broadly.
• Sell your current products to new customers who are similar to your current customers. This is still fairly low risk, but will take more work. Think about the relevant characteristics of your current customers, and then try to identify untapped customers with similar attributes. If you manufacture cabinets for grocery stores, go talk to drug stores, big box retailers, and the like. Another example in this space is geographic expansion. Yet another is to sell to customers who are buying through a different channel, like a novel thing called the internet.
• Sell adjacent products that leverage your core strengths. Core strengths usually mean that your people already have the right expertise, you already have the assets in place, and you are likely selling to a familiar set of customers. You might be a fast food joint who expands to serve breakfast in addition to lunch and dinner, for example.

These are helpfull buckets to get you thinking about business growth avenues, but at some point you will end up asking yourself "how can I get more customers". Well, let's look at some of the best approaches.
• Partner with a complementary business in a way that is mutually beneficial. for example, each company may introduce the other to their customers in order to grow revenue for both companies. Or, one company may advertise another's products and then take a cut on the backend. Complementary companies usually share the same customer segments and offer products that are similar but not the same. A CPA firm and a financial advisor are a good example of complimentary companies.
• Advertise through the right channels. Where and how are your target customers being educated on products that you sell, and how can you advertise there? A frequent answer is, the internet. If you don't have an internet presence, you probably need to get one. Also, look at the cost per customer from your various advertisement channels and shift your funding mix to get the most for your money.
• Some businesses suite themselves well to a salesforce, either internal or contracted. The gauge is whether a sale brings in enough profit to afford the sales commission. If your business model can afford to send sales reps out after new customers, this can be a powerful sales approach.
• Affiliate programs are a great and low cost way to drive growth. Affiliates refer potential customers to your web site in exchange for payment if that customer buys something. Credit card companies have great affiliate programs, so check them out as an example to learn how this is done well. (Do an Internet search for "american express affiliate program" for example).
• If your product or service could enhance the offering of other companies, you should consider licensing your product. For example, Google licenses out many of its tools to other web sites and then benefits (through eyeballs and clicks) when those tools are used. This can be a fast and cheap way to grow revenue.

Well, that should keep you busy for awhile. In this fun and exciting article series, we've identified the key drivers of company value -- Profit Margin, Asset Productivity, and Growth -- and explored ways to improve in each area. Clearly, nothing can stop you now.