Laurent*, 36, runs an e-commerce business created 5 years ago.
For several years, his company posts double-digit growth and continues to see further upside in its market.
As an ambitious business leader, he considered entering his industry’s hyper-growth as a seizable asset to attract investors and financial partners.
However, surviving hyper-growth as a midsize company is an experience that either kills business or makes it much more robust.
Indeed, his meeting with a Twelve Advisory Expert shed light on 3 involved financial risks he needed to be aware of and manage:
1. Did he achieve profitable revenue growth ? Are profit goals maintained ?
It is a common knowledge that a demand acceleration is often associated with an increase of resources needed to meet the former demand. In case of a tight flow, we tend to accept overpaying in order to be able to satisfy our customers, and continue to capture as much of the market as possible.
2. How about the Working capital Requirements (WCR) ?
WCR represents the difference between the time lag between your customers collection and your suppliers and employees payments. When hyper-growth takes off, companies can suddenly experience a WCR increase until it absorbs all the available treasury.
3. Are the consequences of a change in the scale of the company fully managed ?
Including the change in the structure of its overheads: change of headquarters, new Information Technology (IT) investments.
So many strategic issues that either Laurent, focused on its core business, or his accounting department, busy full time recording daily accounting transactions, had ever considered analyzing due to a lack of availability.
He quickly understood the critical need to find a best practice to manage its growth if he wanted to build a long lasting presence in the competitive landscape.
Our Twelve Advisory expert offer him a unique solution, recently placed on the market, enabling its company to access what is called “Financial viability self assessment “
What does it mean ?
Thanks to a monthly dashboard sent by the expert, he is equipped with a proper tracking of the key data points to focus on in order for him to manage its growth and achieve business success
Commercial margin
WCR
Overhead percentage
EBITDA margin
At first, Laurent seemed to join the idea: a monthly monitoring report could serve as a prelude of a long term strategy a sustainable corporate development
However, various doubts appeared in his head facing this one-of-a-kind product : will it be necessary to implement a new software for which its teams do not possess the expertise. And how about the price of this new service, usually found in established companies, it surely won’t be affordable..
Actually he was right to study thoroughly before any undertaking. Our expert just added two elements:
First, a simple access to the company accounting software is necessary for our Twelve advisory experts, who then export on a monthly basis the accounts on their system. Obviously, the entire process is done without any additional workload for accounting teams.
Second, this financial nearshore service, designed for all types of companies, is deliberately offered at an attractive price.
Well, Laurent was confident and according to him the expert seemed very well-rounded.
As an ambitious business owner, why wouldn’t he try it ?
He took the ride and today, he does not miss the opportunity to show its full interest during each of his monthly telephone appointments with his expert.
He is satisfied regarding the accuracy of such a fine solution, not to mention the judicious discussions on management orientations included in the offer.
A valuable, user friendly and affordable, usually established companies feature, financial nearshore service.
What more could Laurent ask for ?"
* Aligned with our security policy, private information were changed to ensure personal data protection
Growth management is a key step in your company development. Make sure to get it done the best way possible.
For more information, click on the link at the bottom of the financial service page to start your diagnosis with us !