July 12, 2010

Is Organic the Path to Green?

By Brady Flaherty, Executive Vice President of Business Development, MergerTech Advisors

Today, everyone’s goal is to be green. We have solar for energy, hybrids for transportation, and everyone is promoting organic materials to have sustainable, green products.

Let’s look at your company. As a business owner in the Technology Sector, you have a love for your people, your product, and your process. There is nothing more thrilling than experiencing that success and momentum when these elements are working well together. That is organic growth and it gives you a feeling of excitement, relevance, and pride.

You can even experience exponential organic growth by hiring the best people, delivering your product as promised, and capitalizing on the process that makes your company different.

However, there is something that comes with exponential organic growth: Risk. Even though the risk is what actually may make this ride most thrilling, only you as the business owner truly understands that if you don’t chose the right person, or don’t deliver the product the way your customer expects, or your process has a hitch, your exponential growth could be affected dramatically. You carry all of that on your shoulders. As an entrepreneur and a business owner, you accept risk because you know what the rewards can be.

In talking with over fifty business owners in the last year, it is clear owners mostly focus on the organics of the business. Strategies are built around your people, your customers, and your business plan. What is also very clear is the typical business has very strong organic growth for a few years, and then the growth actually slows, even though there are more customers, more employees, more marketing, etc. Remember organic is usually correlated with sustainable, and I don’t think many business owners use the word or notion of sustainable as part of their growth goals.

We all want our companies to grow at a dizzying pace, but there is a point that organic growth will not yield the return on equity you deserve as the business owner. You have taken the risk to get the business where it is. Once the business has matured, do you have a strategy to realize your equity and give your business the opportunity for additional cycles of exponential growth? Your equity may be wrapped up in intellectual property, contracts, or something as simple as accounts receivable. Your business is growing but you probably feel the same weight on your shoulders as you did when you started the business.

Just as you may outsource your legal counsel, CPA, HR, marketing, and/or other consultants, you owe it to yourself to have a business partner that concentrates in non-organic growth. That partner should become an integral part of your business and offer strategies that facilitate the possible exponential growth you experienced organically.

The big difference here is risk. You now may have the opportunity to unlock your equity and experience your company on another exponential growth path without all of the risk and burden on your shoulders. Once again, there really is not a downside because you make the final decisions.

While “organic” is today’s buzzword and “sustainability” is society’s long-term goal, the fruits of your labor, your personal “green,” ripen by an inorganic process.