In my previous blogs, I wrote broadly around building a culture and left it with this question “…with foundations of a solid team and a positive culture in place how does one ensure profitable growth?”. Tell me that is not a can of worms and the secret sauce we all look for as business leaders?! What have I gotten myself into! In our relatively new business at Insentra, profitable growth has always been top of our agenda, a close second only to cashflow. The adage of “cash is king” is arguably understated. Cash is not only King, it is Queen, Princess and the entire royal family and their loyal subjects! In my humble opinion, profitable growth is positively correlated with positive cashflow and cannot be decoupled.
Before we even started trading at Insentra, countless hours were spent on cashflow modelling tools and profit projections. Of course, anything we did in this arena was really just educated guess work given we were yet to transact any business. Regardless, this time spent did force us to build a model which has been the cornerstone of the business and a constant source of focus. I relish the day when it won’t matter anymore although in reality that day will never come if we want to sustain profitable growth in the business.
Much has been written on profitable growth with focus generally on solid cash management, seizing and capitalising on market opportunities, agility and other such things, all of which are absolutely relevant and valid. In my view the lynchpins for profitable growth are not only the aforementioned items but also things like staff happiness, customer satisfaction, efficiency and quality. I have already written about staff happiness in my second blog and realistically customer satisfaction is pretty obvious.
In a start-up business where there is so much that needs to be done to generate business, things like efficiency are often left behind and revisited when it is too late. Equally, knowing that cash is critical and there are staff and bills to pay, saying no can be difficult. Whilst a significant chunk of time was spent focusing on cashflow tools etc, before even opening the doors for business at Insentra a significant amount of time was spent on ensuring that we were as efficient as reasonably possible – a critical success factor in any professional services business. We adopted the approach of “do it once, do it right and make it repeatable”.
As much as we could template we did. In addition to this, we put vigour around the quality of the delivery framework. This started from very strict processes around peer review, document control, the creation of a consistent and thorough engagement approach and a robust project management methodology – purpose built to our requirements. We were setup from day zero to grow profitably.
So ... once you have the people, the culture, a positive cashflow and profitable growth what is the key to scalability and sustainability?