How do you determine the true value of your business to grow? Deri Llewellyn-Davies explains how it’s all about the data, numbers can never lie

What is the secret to building a good growth strategy for your company?

How do you determine the true value of your business to grow? Deri Llewellyn-Davies explains how it’s all about the data

What is the secret
to building a good growth strategy for your company?

Launching a business can be both exciting and unnerving, especially in the early days of starting up your company. However, having a business idea and a clear vision is simply not enough. 50% of small businesses fail within the first four years of launch, according to recent data. What makes a business succeed, and what makes one fail? How do you measure the value of your business and build your company? Deri Llewellyn-Davies, Founder of BGI group spoke about how to build the true value of your business on Day 1 of the Elite Business Live event on March 9. He discussed why businesses must focus on the data and tackle their “failure points” early on in order to see continuous growth and take their company to the next level.

Deri has climbed five of the highest mountains in the world, run the infamous Marathon des Sables, completed the Ironman and attempted to scale the Everest in April 2015 where he escaped a near-fatal disaster after a devastating earthquake struck the mountain.  “When I’m building mountains, I’m building businesses,” he said. “It’s the same thing. So, use this as a metaphor in your mind. I’ve built multiple mountains at this point before I stepped into the big one.”

Deri explained why the majority of start-ups never get past the £1 million profit margin, saying how it all boils down to understanding the skill set required to reach the goal and knowing how to work towards it. Businesses need to “fix” their methods early and build a solid growth strategy to excel, he said. “The certainty doesn’t come into that moment. You build certainty, you evolve into certainty,” Deri added. “We all know the failure rates of businesses, it’s bonkers. The growth rates and the failure marks below the £1 million point are crazy… But it’s a hard journey on all of you who’ve broken that barrier. But the skill set that takes you to the £1 million is not the same as the £10 million, and the skill set that takes you to the £10 million is not the skill set that will take you to the £50 million.”

Why do businesses fail? Deri explained how important it is for business owners to understand their strengths and weaknesses and bring in skilled talent to help fix their “failure points” to help their company flourish. “You can’t just build value, you must fix the failure points to build value,” Deri said. “A study shows that 46% comes from incompetence. I can relate to that in my early businesses. I thought I was competent, turns out I wasn’t so much. If we look at the main pillars of businesses, marketing, sales, operations, cash, talent, you got all the subsidiaries as well. You’re competent at one, two or three of those typically, otherwise you wouldn’t be sitting in the room. It’s the ones you are not competent at, that’s going to kill you.”

Deri insisted SME owners must focus on what matters to them and their businesses, rather than taking on board advice from other CEOs as everyone has different shortcomings. “Every single person in this room has a different gap, there’s no one answer,” Deri told the audience. “So, when you’re listening to the panels, you should think wisely about how it matters to you, how it’s relevant to your business, where you are right now and getting the data to prove some of it.”

Using the BGI Strategy, Deri spoke about how businesses can build their value using the tried and tested tool. First and foremost, it is important for business owners to know their “why” business and purpose behind setting up their company. One of the key factors in driving growth is understanding the numbers to determine your business’ value and understand what you need to work on.

“The two weak points in building business certainty is strategic execution and measurement,” Deri said. “There was one business who scored themselves highly in certainty on the numbers, 100 certain on the indicators and after working with us for three months, their certainty was down to 21. They thought they knew the numbers until they were shown what numbers they should be looking it. If you have a financial background or operations background, you would be great at those numbers – but you wouldn’t be great at sales and marketing. We must have numbers across the whole business, bringing in all data or else we can really miss the whole picture.”

Deri spoke about how business owners must have an exit strategy in place even if they do not plan to sell their company because that day could come. He insisted business owners must focus on measuring up the data and numbers across all departments in order to build the true value of their company, rather than focusing solely on “outputs” such profits and revenue. “You must look at the percentage reliance on your employees, percentage reliance on your customers and percentage reliance on your suppliers if we are going to balance value on your business,” Deri said. “If you are not monitoring those things, you’re measuring the wrong things again.”

Latifa Yedroudj
Latifa Yedroudj

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