Applying the four pillars of growth

Case Study

Situation & Opportunity

Who: $500K organic and sustainable food processing company

Situation: Was growing at a respectable 5% per year. The company’s production capacity was limited by the equipment and layout of the facilities, which were also located on the same property as the owners’ home. After years of operation in this location, the owners felt it was time to find a new business premise. Regarding staffing, there was no general management beyond the owners and, when staff turnover occurred, the owners had to pick up the slack and carry the team. 

 

Opportunity: To increase growth by leveraging the market trends in sustainability and organic and healthy eating.

The Pillars of Business Growth

We work on a model that focuses on application of Four Pillars of Business Growth.

Business requirements

Objectives

The Strategy

  1. Decide on an end goal
  2. Prioritize the objectives from the owner’s bandwidth and an impact and cash perspective or the following five years
  3. Identify competition, internal strengths and weaknesses, and external threats and opportunities
  4. Develop a plan

We recognized that it was valuable to focus on top-line revenue growth.

Diversify Product Sourcing

Product sourcing was also something that needed to be diversified to meet the demands that were necessitated by the increase in sales.  

We also determined that building a new manufacturing facility was vital to the long-term success of the company. We explored options as to how this could be executed through internal investment versus leveraging third party resources.

Executing the Plan

Tools

1- Financial forecast: month-by-month and year-long 

Monthly data is valuable to any business as seasonality needs to be taken into consideration. The chief goal of a financial forecast is to understand the drivers of the business and, ultimately, their effects on cash.

2 – Capital-raising opportunities:  debt and equity instruments

3 – Organizational plan: included in-house employees and outsourced resources

3 – New hiring practices: to hire the right people for the right positions

 

Implementation

  • Monthly check-ins with client: ensure tracking along
  • Variance analysis to measure plan progress: looked at the actual financial results and compared them to the forecast

Improvements

  • Discussed the drivers of the financial results and what we could do to maximize successes and minimize challenges. 
  • Looked at changes that occurred and whether they were momentary events or long-term trends.
 
 

With long-term trends, we adjust the forecast to understand the long-term effects on profit, cash and long-term goals; this can often result in changes in the way we do business.

Outcomes

Growth goals: Exceeded expectations 

Due to the strategic plan developed, we have prepared the business for unexpected changes while responding to ramifications affecting the business. The company’s rapid growth has been successfully managed by responding to changes and making optimal use of ramifications.

Financial

  • Increase in:
    • Sales
    • Profits
    • Cash
  • Secured necessary financing for growth
  • Began construction at a new location
  • Shift in emphasis on distribution channels

Organizational

  • Put the right people in the right positions: alleviating stress from owners
  • Learned the right culture fit for the company.