Knowing the answer can enable your company net worth
Can you sum up your company revenue growth strategy for the next 12 months in one word?
There are four possible ways to grow a business. Doesn’t matter whether you’re a service business or produce a widget. To answer this main question, ask yourself these 4 supporting questions:
- Market - Is my market large enough to support my desired growth target(s)?
- Product/Service - Is my product/service portfolio offering meeting the needs of all, a majority, or a minority of the total available market?
- Presence - Is my presence (customer’s having visibility to my offering) in the market strong?
- Win Rate - Is my win rate on the opportunities we pursue at an acceptable level for my industry?
That’s it, four revenue growth options for your company. Whether you make swim wear, repair trucks, make computer chips or provide mortgage services, these are your options.
Brief additional color on each:
Market size – consider what market share you believe you have today and consider your desired targeted growth rate in the coming years. Is your market large enough to provide you the available runway to grab more market share or would it require you to have such a high market share that it’s unlikely to be able to do so? Many companies have plenty of runway left within their current served market because their market share is not that high. But some are market leaders and have dominant market shares and further growth runway in their current served market is challenged unless they shift to playing in a larger market.
Product/Service Offering – if there was just one purchasing agent or consumer buying your type of product/service, could they have all their needs met from your company? If the answer is yes, then your product/service revenue opportunity is the same as your overall market size. But if you find that within your product/service category, you don’t have all the styles, shapes, colors, designs, styles, price points, etc., that are needed, then by broadening your offering you might see new growth opportunity.
Presence – if there was just one purchasing agent or consumer for your type of product/service and when they need something from a company like yours they proactively think to call you, then you have a very strong market presence and your opportunity to grow is potentially maximized because buyers are already working with you. But if there were two or more purchasing agents selecting products/services of your type and they all don’t think to contact you proactively, then your presence might be the opportunity for you to build and therefore grow your business.
Win Rate – out of every 10 opportunities for new business that your team pursues, what percentage do you win? Knowing this will help you determine whether your team just needs more leads to pursue or, if your win rate is low for your industry norm, perhaps what you need is not more leads but an improved win rate. Perhaps your team needs to identify steps that can be taken (enhance the quality of your proposal, proposal follow up effectiveness, bundling of products/services, etc.) to increase your win rate and that will enable company growth.
Going through this exercise of discussing these various questions is a great way to facilitate healthy new dialog with your team. Identify which of these four is your highest priority for addressing. You’ll benefit from the dialog and you’ll certainly identify a focused new way to build the long term value, or worth of your business.