By any measure, growth is abundant in Clark County. You see and experience it on a daily basis. Traffic, construction of commercial buildings and roads, new businesses and housing are all indicators. Washington state led real GDP growth in 2016 at 3.7 percent as reported by the Bureau of Economic Analysis. Locally, Clark County is expected to more than double its population between 1990 and 2020, surpassing 500,000 people.
With that kind of growth, how are Clark County businesses responding? What strategies are they employing to grow? And how does finance fit in? We will explore those questions and give you a few things to think about in your own growth.
Clark County growth stories
Tapani Inc. is a heavy construction and environmental services contractor located in Battle Ground. Over the last six years, Tapani has tripled its revenue through organic growth. Being a family-owned business in a cyclical industry, Tapani has focused on maintaining a strong balance sheet and minimizing debt according to the company’s President, Leigh Tapani. Part of that strategy includes making strategic investments in equipment and systems. He credits growth to a strong culture, employee longevity, strong partnerships with key partners and investment in the business.
United Grain is one of the largest exporters of grain in the Pacific Northwest. It has locations throughout Washington, Oregon, Montana and the Dakotas. United Grain has grown significantly in the last five years through acquisitions, green field builds, as well as expansion of its export facility in Vancouver – with additional growth planned this year. Finance has played a key role in providing for short-term working capital needs as well as long-term debt to finance organic and non-organic growth according to Corporate Treasurer, Doug Engle.
KIC is a commercial vehicle wheel end firm that serves the Class 8 truck, trailer, transit/school bus and suspension original equipment manufacturers and associated aftermarkets. KIC has been so successful, it was recently purchased by Accuride. Finance played a key role in the company’s growth, according to Chief Financial Officer, Dave Finnie. Working capital was historically a pinch point. Finance was able to leverage banking to gain liquidity, enabling continued growth. Additionally, partnering with international manufacturers is a key component of KIC’s strategy.
GiftTree is a growing e-commerce gift business based in Vancouver that delights in turning ordinary gifting moments into extraordinary ones. President and Chief Executive Officer Martin McClanan leads the business through more than fivefold increases in staffing at the holidays. The hundreds of thousands of transactions that flow through the business require a strong finance team to boil down the data and turn it into actionable intelligence. Finance partners across the business to support its organic growth, resource allocation and seasonality.
Strong finance teams impact profitability
As you can see from the growth stories above, there is no one-size-fits-all solution to balancing growth and profitability. In each of the above cases, there was a close tie between the strategy of the business and how finance worked to allocate capital in a targeted manner to achieve growth objectives.
As you continue to grow, elevating the skills and capabilities of the finance team, typically in a CFO, is a must to grow profitability. Today’s CFOs are expected to be strategic partners to CEOs, helping drive profitable growth and value creation. Having command of the numbers, strong internal controls and integrity is the baseline of expectations. A high performing CFO:
- Partners strategically with the CEO
- Provides information for decision-making
- Gets and keeps the right people on the team
- Has credibility internally and externally
- Balances short-term needs with long term investment strategy
IBM studied the performance of CFOs in 2013. Those CFOs that were both high in financial efficiency and high in business insights consistently outperformed their peers in terms of earnings, profitable revenue growth and managing risk. The findings are clear. High performing CFOs have a significant impact on the performance of the organization.
High performing CFOs increase shareholder value. They have a strategic viewpoint, are strong leaders and guide the organization to decisions that drive profitable growth. They focus on key performance indicators and relevant trends in the business, enabling key decision makers to make timely, informed decisions. High performing CFOs prioritize capital and invest in areas that advance long-term goals. Specifically, these impacts for your organization include (vs. peer organizations):
- Increased earnings
- Optimized capital spending
- Effective risk management
- Increased innovation
- Ability to spot new revenue sources more effectively
Learning how to take these strategic actions will have a direct impact on your business. Growth is possible for you and you have a choice about whether you grow profitably or not. It is not too late to make a course correction if needed. No matter the size of your business, you can build these skills and capabilities into your business.
Heidi Pozzo works with leaders and businesses to achieve high performing status. To contact her, visit www.PozzoConsulting.com or call 360.355.7862.
