Many companies point to growth as a measure of their success. While they spend time trying to grow the business and making it as busy as possible to increase sales and turnover, why do they fail to see their margin and profits rise proportionately?
Christiane Hutchinson, CEO of Biramis Management Partners, reveals the factors that impact this.
“Sometimes people are focused on growth and not the cost of growth. The more they grow, the more it costs, and this issue will keep coming back if they are not getting value by not growing their margins or profits.”
Scalability is King
For Christiane, a more rounded approach is necessary, and owners need to look at the capital value of their business.
“For a scalable business, the next sale should cost less than it did to produce,” explains Christiane. “This is because the business is getting capital value from what it has already invested in intellectual property and smart systems, and not adding to capital costs, such as taking on more staff, to chase growth.
“You can grow your business, but that does not mean you are growing your margin, your profit or even your surplus cash”
Christiane Hutchinson, Biramis
“If that is the case, you are not growing your business value,” continues Christiane.
The Value Creation Juggling Act
Biramis uses a management partnership approach to help a firm restore and grow value in the business.
“If you are looking to exit your business, would prospective buyers or investors get more value from your turnover, your profitability or your cash?”
Christiane Hutchinson, Biramis
“We specialise in building capital value for clients to increase their profitability and cash for this very reason.”
“Businesses that are enjoying growth, but struggle with scalability and gaining value, often have to make cuts or other undesirable decisions to achieve this,” Christiane concludes. “What is preventing your business from truly growing in value?”
To find about more about restoring and growing the value of your business, contact Biramis Management Partners on 0161 817 8052 or visit biramis.com.
