Fastest Growing Private Companies: Manage Your Risks to Yield Rewards, Part I

ABD was recently recognized as one of the Bay Area’s fasting-growing private companies.  If you lead a fast-growing company, congratulations!  The rewards can be many: an expanding customer base, a growing workforce, greater brand awareness, market credibility, better access to capital, and increasing shareholder value.

Whatever rewards you are seeking, your strategic planning process should include an evaluation of the risks associated with these rewards.   The reality for emerging companies is that, rightly, two risks receive the lion’s share of attention: capital risk and product risk.

Capital risk.  Whether funding a product launch, building a sales organization, or entering a new market, fast-growing companies require capital.  Companies that effectively manage their cash to profitability or to the next funding milestone will realize the reward of increasing shareholder value.  And companies that increase shareholder value will have greater access to capital.

Product risk.  Just as capital risk is critical, the other fundamental risk on the minds of fast-growing company leadership is product risk.  Companies that bring a product to market on time, on budget, with the right feature set, and with excellent service will realize the reward of engaged customers.  And companies with engaged customers will build better products.

It is understandable that capital and product risks are on the mind of the entrepreneurial leader.  If you run out of money, the product doesn’t work, or the service stinks, nothing else matters, right?  Well, yes and no.  Yes, managing cash flow, managing to milestones, managing product development and managing service are the core objectives.

But, once you address these operational imperatives, other risks come into play that warrant attention.  Over the following posts, we will look at:

1.      Attracting and retaining employees and key management
2.     Managing the risks of customer claims of financial loss
3.     Expanding globally
4.     Protecting and securing data
5.     Managing risks of supply chain interruptions