There’s a famous business quote: If you’re not growing, you’re dying.
In 2015 Vanilla grew approximately 35%. This year we are currently trending at 17% growth. That’s still pretty good since the average growth rate is somewhere around 5% for most private businesses. So while we are still in a healthy uptrend, we need to be careful as Vanilla’s growth begins to plateau in the Chicago market. Our local geography is likely approaching carrying capacity; which means further growth in Chicago comes from taking competitor market share. In turn, this means overall future growth must come from alternative sources. If we want to grow, we must begin looking beyond Chicago. If we do not expand beyond Chicago, or alter our scope of services, it’s likely Vanilla moves down into the average 5% growth range for 2017. This is not good, because remember – if you’re not growing, you’re dying.
A blunt method for achieving long-term, scalable growth is expanding geographically. Unfortunately, bringing Vanilla to another city is not financially possible without first accumulating enormous savings or receiving outside investment. The biggest impediment to geographic growth is therefore savings, which come from profits and operating margin. Given a scenario of this manner, it’s a constant struggle to save and accumulate profits. The logic goes, if Vanilla can save $250k or thereabouts, then Vanilla can finally expand to another city. With a new city operational, Vanilla profits multiply and is then more quickly able to continue on opening more stores in more cities across the US. This overarching goal provides long-term, multi-year growth. And that sort of growth sustains new job opportunities and career paths.
Ultimately so much of Vanilla’s future growth hinges on accumulating savings for expansion. There are a lot of things slowing us down too; e.g., taxes increase the burden by at least 40%, technology improvements requiring us to upgrade to 4K video in 2017, upgrading storage and DiskStation. So how do we get to a second city faster? Or, what can we do to speed this up? How do we get Vanilla into Los Angeles, New York, etc.? Given these set of circumstances anyone can see our options for growth are restricted. Geographical growth into other cities is limited. How do we continue to grow?
Consider a 30+ year old family owned business which does not invest in growth. They stagnate and are between zero and 5% yearly growth. For a hypothetical company like this, when economic conditions begin to sour, the no or even low growth trend can easily become negative. Imagine how said family business might have to cut staff or close offices. What happens if economic conditions continue to decline and become worse? Contrast this with a business achieving 17% growth.
What would happen if Vanilla lost 10% of our sales? We’d stop hiring.
But things would be OK. Many of you saw the dramatic slowdown in hiring when we went from 35% growth in 2015 to only 17% growth in 2016. It might even help to consider the 115% growth in 2014. For perspective we should match the growth numbers up with employment and hiring. Consider approximately when other team members came on:
- (2014) 115% Growth: Younis (became full-time), Hannah, Cassie, Thomas
- (2015) 35% Growth: Ian, Katie
- (2016) 17% Growth: Isaac (became full-time)
My point here is to illustrate that growth in revenue at Vanilla translates into real world results. If that growth number falls down into the average 5% range then our situation stagnates. Employees lose career mobility, thus missing out on valuable opportunities to take on new responsibility, etc. Owners are left without an exit strategy and a decaying asset class. New college graduates have zero opportunity to be employed. To make things worse, in a low growth company there is little room for mistakes or economic downturn. Stagnation is bad – if you’re not growing, you’re dying
This is why I would like Vanilla Video employees to take an active interest in Edit Engine. In my opinion, it provides a clear opportunity to boost growth from 17% to a higher number. Edit Engine is an opportunity that can provide for sustained long-term, multi-year growth because it is not geographically bound like Vanilla is. Here is a tangentially related service that fits with our current existing set of services – and all we have to do is market it to others.
While I am researching other ways to keep growth positive and in the double digits over the long-term, at some point employees will have to come and assist me in the growth department. In other words, growing Vanilla cannot remain dependent on myself for improvement; growth must become a metric cared about and curated by employees directly and consistently. I believe this is possible with Edit Engine since the primary sales channel is direct communication with potential customers. Employees know exactly what Edit Engine customers do and require. They are able to speak the customer’s language and understand the inner workings of weddings, editing, video production and so forth.
So let me be absolutely clear as I finish this off. Edit Engine provides a multi-year, long-term path towards growing our team, benefits, career opportunities and doing so much good. At least a few good years of double-digit growth should be possible thanks to launching Edit Engine. Beyond this timeframe, and even bigger, is where my attention goes to next since we as a company must always be focused on growing. So while I look beyond Edit Engine and Vanilla Video and the challenge of growing very long-term – employees need to step up and assist with current growth.
By helping assist with the business development parts of Edit Engine and reaching out to new customers, our employees can greatly improve our collective situations (and their opportunities directly.) I am confident that our existing team of employees can make strides with Edit Engine, and this post is to help them understand the importance of growth and their relationship with revenue growth in real world terms. So what can we do to grow Vanilla? You can take some initiative and contribute a few hours per week towards winning Edit Engine customers, for a start.