What is more important? Revenue, Expenses, Processes, or Cash Flow? Can you grow too fast and implode?
I am reading the 10x Rule by Grant Cardone. This book is all about pushing yourself to a point of extremely high growth, marketing, and visibility. Here are some key themes of the book.
- Continue to expand, never contract.
- Focus on customer acquisition.
- Be highly visible.
- No fear or excuses.
- Overcommit and figure it out later.
- You will be criticized so use this as an opportunity to communicate and make it right.
I must admit that with my finance and accounting background, Cardone is challenging my thinking. Aren’t we supposed to be responsible and ensure expenses are in check? Can’t we grow so much that processes might not be in place to handle it? This could cause major cash problems. Bad processes and lack of preparation for growth can cause a business to go out of business.
I am a strong believer in abundance and do believe that we should put forth the business development for high revenue growth. How do I reconcile the ideas of abundance and responsibility?
5 Ways to Have an Abundance Mindset with Responsibility
It is important that you communicate the business plan for growth with everyone in the organization to ensure they put processes in place to be prepared for the growth. Don’t surprise Finance, Operations, Human Resources, Client Services, or even Marketing and Sales. Everyone should be on the same page and over communicate. Monthly meetings with the executive team are helpful.
A Financial Plan
No matter if you want to grow 10%, 50%, or 100% this year, put a financial model together. Consider what needs to happen with revenue by client, service line, product line, location, etc. Review your new business pipeline on a regular basis. Understand how expenses such as marketing, hiring, office expenses, and even technology will be affected.
Companies that are growing at a fast pace should review their processes regularly. I worked at a fast growing company where we had to change many operational and financial processes every six months to keep up with the growth.
Invest in Systems
Technology is changing and getting cheaper all the time. I am amazed at the prices for online expense reports and bill pay. A church operations system and a school software system that I am helping to implement are much cheaper than I ever would have thought.
Cash Flow Forecasting
Cash Flow can make a huge impact on a company. Don’t just understand the Income Statement (P&L) but understand the Balance Sheet. Where is the cash going? It could be in Accounts Receivable, Distributions, Property, Plant, and Equipment, or Taxes. An Income Statement can be manipulated more than the Balance Sheet. Check out “The Balance Sheet is the Most Important Financial Report”.
In summary, I am a strong believer in the abundance mindset, especially with your revenue. Strive to grow more than you ever have before. I plan on doubling revenue this year. Yes, this can be scary. The important thing is to be responsible with your expenses, communication, processes, systems, and cash. I like Cardone’s book, and I agree with most of what he says. Have a mindset of abundance with responsibility, and you will be successful.