Characteristics of growth companies

A study of “super growth companies”-those companies that grow up rapidly to a stock market quotation by Ray and Hutchinson(1983) underlies about some of the important differences between growth and ‘life style” or static business.

The super growth were more focused in their objectives, with a strong emphasis on forecasting financial data on regular and timely basis particularly each flow, but also profit and sales.

A 1989 report from London Business school identified six common factors associated with successful business growth:

1. An experienced owner manager with a good knowledge of the market and industry.
2. Close contact with costumers and a commitment to quality of a product and/or service. High profit margins were obtained or achieved through competing on service rather than on price also uniqueness of product.
3. Innovation and flexibility in marketing and technology, this gives them a differential advantage over their competitors.
4. A focus on profit rather than sales with good management systems controlling costs. There is the old adage that “Turnover is vanity and profit is sanity”. Accounts added cash flow is reality.
5. Attention to good employee relations, often backed by a bonus schemes.

Researches shows that the major weakness with British business is not lack of functional skills but basic man management and that the firms that grow are the ones that get this right.

6. Operating in a growing market, spotting opportunities is something that entrepreneurs are good at.