Often when company management is seeking to grow their business they focus on market size and penetration (total addressable market). However, to successfully grow a business, financial considerations must be an integral part of the growth plans.
- Market size/total addressable market sets the stage for creating revenue prospects and growth projections.
- However, the revenue model is limited by and dependent upon the industry landscape and the company’s competitive position within the landscape.
- A company’s competitive position is informed by a company’s expense model and capital resources.
- The company’s strategic growth plans are constrained by the company’s expense model and access to capital at maximum valuation.
- Maximum valuation is obtained when the strategic growth plan is highly aligned with the market opportunity, revenue projections, competitive position, and expense model.
All of these strategic/financial aspects are tightly linked and need to be highly aligned in order to assure maximum growth prospects and fund raising success.
A formal assessment can be done in order to analyze each piece of the framework to ensure that each piece is well considered in a growth strategy.
Please feel free to contact us should you have any questions.