The patchy revenue growth trends we have spoke about in earlier posts has been confirmed with some interesting results from the IBISWorld Top 1,000 Company List.
They have reported that:
70% of companies have reported an increase in revenue on 2016.
Overall the total revenue over the entire list has declined 2% since 2016.
Net Profit After Tax has increased substantially since 2016.
Some interesting trends include:
Increased demand for outsourcing of payroll and administrative services.
Improved health consciousness and a growing population over 60 has increased demand for medication.
Vegetable wholesaling has also increased on the back of improved health trends.
Record sales of motor vehicles has driven revenue growth for Motor Vehicle Dealers on the back of population increases and technology improvements driving better fuel efficiency.
These widely diverse trends highlight what we see a lot when doing valuations. There is rarely a consistent industry growth rate in revenue that is not linked to current particular trends, or where there is consistent effective business management that drives growth.
I have seen revenue growth from:
industries that show high competition and where changes in the business model has captured market share.
Improvements in marketing, product or service development and
Improvements in the delivery and quality of products and services that create referrals in the market.
The bottom line is that growth comes from working on all the key aspects of the business model and there is rarely a single silver bullet that solves everything.
I often remind people that:
80% of all businesses turnover less than $500k pa.
Less than 6% of businesses have turnover of $2m pa or more.
Is your business a 1 in 20 business?
Do you know what it is worth? Do you know how the value would increase as a result of the growth you plan or desire?
If you want to know the value of your business and how growth will impact its potential value then give us a call and discuss our business valuation process and the benefits it will deliver.