Whether you are a Managing Director working towards a potential business sale, or maybe you’re looking to secure additional funding from banks, private equity, or other potential investors, having the income vs costs equation right puts you in a great position to maximise the value of your business.
‘Cash is king’ is a classic business truism, but what can you do to ensure your organisation has a clearly defined income stream that will generate more revenue than the sum of all your operational, running, and investment costs, and give you free cash flow?
Investors, and indeed potential backers are becoming increasingly sophisticated in their analysis of balance sheets and strategic plans. It is not enough to simply have tight control over costs. Investors are looking for much more information upon which to base their initial funding decisions and to then monitor how your business is progressing against those plans.
So, what else should a CEO and leader have to do to make their company investor-ready, funding-ready or sale-ready?
You need to have these Business Growth Strategies in place
- A clear growth strategy
- Good cost management [this is not the same as cost reduction]
- A clear innovation strategy
“All of the above contribute to value creation, but 70% of businesses do not have them in place”, according to Andre Van Zyl, from business advisory group, Enterprise Elements. Additionally he mentioned that “When we are out there trying to find funding for our clients, we see that the financial institutions are now looking for strategies that will deliver enterprise value creation and free cash flow, rather than just concentrating upon profit”.
To some, marketing is still seen as a cost, grouped alongside other ‘corporate’ functions such as Human Resource. Yet, the reality is that marketing can be a revenue centre and should play a critical role in supporting your company growth, and that is where we come in, to create marketing strategies that will deliver growth and innovation.
CEOs need a firm business strategy and a well-thought-through marketing strategy, one that is based upon a detailed evaluation of the markets you currently operate in, those you plan to enter, and which supports the achievement of your company’s objectives. Your company needs to be ready for scrutiny!
Businesses not only come to us when their marketing needs an overhaul, but also when they are preparing for sale or investment. Growthology’s strategic marketing review process shows up the gaps that need to be plugged, strategic marketing ‘fails’ that may be leaving them exposed.
If you want to maximise the value of your company, you need a strategic marketing plan to succeed. First make sure you really know your market, your customers, and what it is that your prospects want. Then formulate a clear business strategy and support it with a marketing strategy that has been carefully crafted to help deliver business growth.