Jeff is president of a customer focused midsized company. They improve their products and services based on current buying patterns, preferences, and needs. Despite the fact that they consistently earn close to 100% customer satisfaction ratings, repeat business, and referrals; for some reason they often don’t have enough money to invest in upgraded technology, marketing, or expansion. They grow for a while and then have to catch up. Jeff is wondering if he should look for outside investors.
What do you think? Is the company positioned for growth? A plateau? Freefall?
Although a vignette cannot possibly convey the whole story, there IS enough information here to prompt some relevant questions.
What makes Jeff think that an infusion of capital will change their grow-then-slow pattern? Why doesn’t he know the underlying cause of their lack of expansion capital? Has this company taken a close look at its gross profit and pricing? Sometimes companies that focus on customer satisfaction don’t place an equal emphasis on making sure their business gets paid fairly by those happy customers. Has this company unnecessarily been discounting its premium products/services? If their customers are so happy, wouldn’t they be willing to pay more?
My guess is that Jeff shouldn’t approach outside investors as its next step. Fixing the profitability problem that has too long been viewed as acceptable would be a better idea. Plus the reality is – outside investors would be reluctant to fund Jeff’s company based on limited profit and sustainability.
The 7th top cause of The Plateau Pattern™ is “tolerance of a significant problem.”
Known as The Growth Strategist®, Aldonna Ambler built and grew a suite of companies to help midsized B2B companies achieve accelerated growth with sustained profitability® A Certified Speaking Professional (CSP), Ambler has addressed over 2000 audiences and hosted a syndicated online talk show about growth strategies for 9 years. As a growth financing intermediary, Ambler raised over $1 Bil dollars for midsized companies. The winner of over 2 dozen prestigious national and statewide "entrepreneur of the year" awards, Ambler is available to speak about “profitable growth during any economy” and/or serve on the board of a growth-oriented privately-held company.