I wrote a post on this topic and want to add a few additional thoughts.
I am working with three different businesses who are seeing great growth opportunities. Two have recently been approached by investors, even though neither is raising money at this time. All three have too many opportunities coming at them and are trying to focus on the best ones.
Problem is, its difficult to compare one opportunity against the next. And, how does one define best? Is it most revenue, most net income, most customers…? One looks like it will bring in short-term cash and help improve the P&L, but another will add more long-term strategic value. Or, there are two others that look like good opportunities, but each requires research, development and market testing, but there are only enough resources to pursue one. Which one to select?
I am all for running spreadsheet analysis on opportunities and seeing what the numbers say. Projecting revenue and expenses and using discount rates to forecast risk…I love all that! But before it can happen, I like to use more of the fuzzy stuff to analyze opportunities. By fuzzy stuff, I mean purpose, vision, mission and brand pillars.
- Purpose: What are my passions, interest and talents? How do they intersect for what God has in mind for my earthly life? Do these growth opportunities fit with my purpose?
- Vision: Where do I want me and my business to be in 5 years? What are the general product/services offered, the markets/channels served, and the revenue and net that is feasible for me and my business? Do these growth opportunities help accomplish my vision?
- Mission: How do I go about accomplishing my vision? What are my personal values that give me a set of rules for how I run my business. Do these growth opportunities violate my personal values?
- Brand Pillars. These are like a unique recipe to a company that is made up of a set of ingredients. While the ingredients might be common, it’s their combination that makes the recipe unique. Do these growth opportunities violate my brand pillars?
- Investment. If I plan to take on investment in the future, then I need to consider opportunities that will help me grow my revenue quickly, as that is one of the criteria investors use in due diligence. Do these growth opportunities provide me with fast revenue growth?