https://lnkd.in/e-Cc-PhA Just wrapped up a case study highlighting some successful value creation work for a vertical software company. After a funding event, it can be tough for management teams to align on which initiatives to tackle first. Here are a few tips from my experience: 📈 Prioritize Compounding Benefits Start with initiatives that enable or build capabilities. These early projects are not the most glamorous. The long term value is the momentum they create and tone they set. They pave the way for bigger wins down the line. 🚧 Address Bottlenecks We identified and fixed a major technical bottleneck in the sales funnel. This gave us an immediate boost to revenue and win rates. The less obvious win was a finding that our marketing efforts were more effective than we thought. Many opportunities fitting the ideal customer profiles were getting stuck at the bottleneck! ✴ Find the Triple Word Score Initiatives Focus on initiatives that add value across multiple valuation categories like revenue, margins, and multiple expansion. My favorites are those that improve operating leverage and scalable unit economics. Operating leverage improves as each dollar of increased revenue earns a little more Operating Margin (EBITDA) over time. In the case study, I renegotiated two of the largest variable cost supplier contracts, leading to immediate improvements in unit contribution margins and setting the stage for increasing margins as revenue grew. This is a valuable function of a durable business model. Most teams agree on what needs to be done, but not always on the order. Choose initiatives that start building a solid foundation for future investments or the Quick Wins with high impact. A few good articles that touch on the technical concepts.. Healthtech: Show Your Magic | Andreessen Horowitz https://lnkd.in/eGkDnkiG The Gross Margin Problem - Bottom Up by David Sacks https://lnkd.in/e9J2Eqaa
⚒ Client Case Study: Boosting margins of a PE owned vertical software company. See how our Interim CFO set the Go-To-Market team up for continued success and accelerated growth. 📈 💲 A new investment's value creation plan was off to an accelerated start after we set the tone with big operational improvements. ⚙ After a deep dive into top of funnel conversion bottlenecks and the key drivers of variable cost, we created a plan, focused and executed. 🏅 Simple actions, consistently performed well, can lead to remarkable outcomes over time. Learn more about about our Office of the CFO services for investor backed businesses at: https://lnkd.in/eB9iBGFV
