Opportunity-based growth means getting your business ready to turn change and uncertainty into fuel for growth. It plays to the strengths of SMEs, which can't match the market power of large businesses, but which can react more quickly.
Traditional strategy is based on careful and long-term analysis of the market: for SMEs, this is usually a feel-good distraction.
Getting ready for opportunity-based growth is in fact a strategy: a modern, responsive strategy. A strategy of becoming faster, more informed and more flexible.
To become ready for opportunity-based growth, a business needs to tick these boxes:
- Good knowledge of why it really wins business: what part of the offer is most valued by customers
- Very good insight into the short-term cash costs of saying yes or no to business opportunities
- Excellent awareness of profitability per product
- The ability to make fast decisions about investiing in opportunities (new products, new customers, acquisitions)
- The business needs a pipeline of new products and new ideas
- The courage to exit products and services when they distract from the future
GrowthPath brings to Australia a strong international track-record of transforming to become an opportunity-aware business
Perpetual vs Periodic Inventory
How to choose between Perpetual and Periodic inventory methods. Or, in summary, why you should choose Perpetual. Part of GrowthPath's Profit Engineering Essential Skills series
Calculating the effect of price and mix effect in sales and margin
When a business sells products of different margin, price and cost, the mix of what you sell can affect results. It's worth understanding this. At least it can explain changes in a way you can diagnose. Targeting better mix needs a mix-effect KPI to drive profit growth. Here, we show you how to measure the mix effect. Please note that this is an advanced topic. There is a link to a spreadsheet showing how it works. I learnt this technique from Richard Coppoolse when he was Pricing Officer for Philips Lighting at the global HQ in the Netherlands (He contributed to the text Innovation in Pricing) These calculations are an example of a synthesised KPI, and do not qualify as a genuine business driver.
Business Start Up Financials
Business Start Up Financials Some notes on starting a business in Australia Introduction Who is this for? This book is for people looking to start a small business who want to understand basic business financials and who want to make a useful but simple financial plan covering the first two years. It focuses on practical realities, such as what you need from the business to replace the job you are giving up. This book is designed to give you some important financial skills for running a small business to produce a financial plan for the first two years of your new business. Starting a business is much more than making a financial plan. This book touches on some of these additional topics, but it doesn't go into much detail about making the full business plan. This book is sold as a bundle with a spreadsheet. The spreadsheet is a practical, simple financial plan. Business financial plans can be high-level and long-term, but this one is short-term and detailed. It's designed to help you...
The best way to use information to boost growth is to implement business drivers, a business measurement approach which goes way beyond traditional accounting. Part of GrowthPath's Profit Engineering Essential Skills series
Balanced Scorecards: a tool for growth
Mission and vision statements are ridiculous. If you agree, time to learn about the balanced score card for SMEs. An idea from the 1990s which is a genuine classic.
Transforming the SME Finance Department: Part 1
This series is about SME finance teams that are capable of engaging with the business. It is an adapted version of articles from tim-richardson.net Author: Tim Richardson. In this article I will cover capabilities, flexibility, some tips on development ideas that scale to a small team and building the team: recruitment, and moving people out of the team. Obviously this is a very ambitious topic to cover in one article. Leadership styles and organisational culture are never the same, yet they have a huge impact on this topic.
Business Plans to raise money for growth
Business Plans that don't explain business value are almost useless GrowthPath business plans help unlock the funding and focus needed to grow your business. Since 2008, Tim Richardson has been helping Australian businesses access money needed for growth. He also launch new businesses (and he teaches Small Business Management as a visiting trainer at the Holmesglen Business Enterprise Unit). What is the key to GrowthPath's business planning success? Our business plans focus on proving how your business will become valuable. The plan and the financial model are closely integrated. Our plans are customised to each specific business, and use comprehensive, objective market research. We clearly explain what makes your business special, and why it is hard to copy. Our approach is a proven choice if you're looking to sell your business, raise funds for expansion or understand the best options for growth. Each business is a special combination of a market opportunity and your unique way of...
Measuring procurement: The Purchasing Efficiency KPI
Measuring procurement: The Purchasing Efficiency KPI Since procurement is vital for margin and profitability, an objective way to measure the effectiveness of procurement is essential. That's what Purchasing Efficiency does. It's a KPI which corrects for factors beyond the control of procurement, and measures the financial contribution of procurement.
Contribution vs Gross Margin
Most businesses use the default settings from their accounting system which usually causes the gross margin to be reported too high. This causes profit leaks due to mistakenly under-quoting, over-spending on sales promotions and mistakes about understanding the true profit of different customers. This is one of the easiest mistakes to repair. A few simple tweaks is all it takes to fix the problem by moving to a correct margin. This article discusses correctly identifying variable costs, and how to get contribution margin from your accounting system, be it MYOB, Saasu, Xero or QuickBooks. Part of GrowthPath's Profit Engineering Essential Skills series
Cash vs Profit, and the reason for depreciation
Cash is very important but the "profit" method of business performance measurement dominates. Part of GrowthPath's Profit Engineering Essential Skills series
When to welcome risk
A really good example of taking a decision about risk is currency risk. This risk is easy to measure, and easy to insure against via "hedging". Sometimes risk hedging throws away an opportunity to outperform competition. Risk hedging may cost more than you realise; for some businesses, currency risk can be turned to advantage. The profit of a businesses come from taking the right risks. This discussion of hedging currency risk is an illustration of how to decide to insure against a risk, or to turn into a source of profit.
Goodbye budgets "Budgets aren't what they used to be," one CFO told us for this month's cover story. At a growing number of companies, in fact, budgets have ceased to be at all." Why is that?
Free shipping for online retailers: there's a right way, and a wrong way
Can free shipping generate a sustainable advantage for an online retailer? There are right ways and wrong ways to do free shipping ... backed by research.
Agility is not the same as being small
Agility is the ability to quickly respond to opportunity. Increasing business agility is a key part of achieving opportunity-based growth. SMEs are small and don't have large budgets to spend on business development. They can, however, become very agile.
Why Business Plans and Business Valuation are inseparable
Bank and investors translate business ideas into cash-flows. You should view a business plan as a life-support mechanism for a set of financial projections. Keep this in mind, and your business plan will become powerfully credible.
Good responses to surprises are better if they are fast
Fast, well informed decisions make money. But good decisions made too slowly can mean a lost opportunity.
Strategic planning is over-rated; growth comes from seeing opportunity
US consultant Kaihan Krippendorff says "small businesses should scrap strategic planning" and we agree.
Decision-making: engine-room of business growth
You can only spend a dollar once. Learn how decision-making techniques let small and medium sized businesses make the right business investment choices.
What is Opportunity-based Growth?
Why does GrowthPath recommend the Opportunity-based approach to growth? Most traditional approaches to business planning and strategy assume that you can predict the future and influence the environment. In fact, the real growth opportunity for flexible SMEs is taking advantage of surprises.
Real-World Examples of Business Opportunities and Growth
Three places to find growth opportunities 1: within your current customer base. 2: optimize pricing and target new customers. 3: acquisitions .
growth through focus and agility: the role of SME finance teams
Turning bean counters into gold Business Growth and modern finance teams SME finance teams should be driving the three elements of growth: awareness of profitable opportunities a fast response the ability to finance growth through cashflow management