This is an interesting question for me. Everon has grown our managed services business fast since its inception, but we are still a very small company, as are 95% of our competitors. So how big should we expect to be able to get, and how fast?
Entrepreneurs, including me, aren’t exactly known for being patient. I would like Everon to be a $100 million company right now, and I’d like to do it without any additional outside funding. Given our current service mix and the margins they create, that isn’t a possibility. I’ve figured our self-financable growth rate (SFGR) to be around 30% at this point, and that’s what we are shooting for in terms of growth this year. At that rate, it will be a decade before we hit $100 million.
Now, anyone will tell you that 30% sustained growth is amazing and very difficult to achieve. So maybe I should be satisfied with that; but I’m not.
Which makes me think of the levers we can use to increase our growth rate beyond this current limit:
- Acquire companies
- Raise additional cash to fuel faster growth
- Increase our margins on our current services to increase our SFGR - giving us more internal resources to fuel the fire
- Sell different products or services that are faster to sell and have higher margins
- Develop a growth model that has a more variable cost or self-funding model, such as franchising
All of these are viable options, and are being done by one company or another in our industry. It remains to be seen if one of these models will prove to be “right” or superior to any other. Will faster-growth models allow them to maintain high levels of service, or will customer churn end up spiking? Will certain models allow for flexibility and speed to meet the changing demands of customers and changing trends of technology? Time will tell.
One thing I know for sure: Everon will be putting the pressure on ourselves to find faster ways of growing, as it is a land-grab right now. The worst-case scenario for someone who builds a decent business in this industry right now is to get bought at a fair price, and the bigger you are, the better the price.
I’d be curious to hear other’s thoughts on their growth rate plans and how they hope to achieve them and even accelerate them.
MRC
