I work with companies in all stages of development but have recently had several discussions with clients about the characteristics of a mature company. So, without further ado and fanfare, below is my list of 10 characteristics that I consider when assessing whether a company is “grown-up”.
- Scale – Minimum $20M annual revenue
- Profits – EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) of several million per year with the percentage of revenue varying by industry
- Executive – Well developed management team with the CEO focused on strategic and growth issues
- Operations — I am using this term broadly to refer to product or service delivery, sales and marketing, human resources, etc. All functions are running smoothly and while the resignation of any key leader might be painful, there are others who are able to step in and fill the void
- Information Technology – Makes use of the latest tools to create efficiencies throughout the company
- Financials – Strong financial management and reporting, regular financial review meetings and annual reports subject to a review or audit by an outside CPA firm
- Vision – The senior team has a shared vision of the future and the firm’s position in the marketplace
- Employees — United by a common purpose beyond getting a paycheck
- Planning – The company is operating on an annual budget and most likely a 3-5 year strategic plan as well
- Succession – There are succession plans in place with key man insurance and other tools to ensure survival of the firm in the event of the death of a key leader
Here’s what I suggest, assess your own company in each of these key areas. Give yourself a grade and pick 2 to 3 where you feel you can make meaningful progress over the next six months. Don’t try to address every one of them, rather pick those that you feel will have the greatest impact. At the end of that time period, select others you can work on for the next six month period.
As always, I appreciate the comments and feedback I get from the monthly edition of my Finance Matters newsletter.
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to [email protected]omza.com The archive of these monthly newsletters is posted at the Resources section of homza.com
your cash is flowing. know where.® Ken Homza Copyright @ 2015 Homza Consulting, Inc.