Revenue Crumbs

Revenue Crumbs

Did you know that only about .04% (or .0004) of companies have annual receipts of $1 billion or more?   According to the US Census Bureau receipts of US companies for 2007, 53% of total receipts are collected by those companies.  On the other hand, 97% of companies have receipts of $10 million or less.  In fact, 76% of companies have receipts of less than $1 million. It means there is intense competition in the shallow end of the revenue stream.

USA Today reported in an article entitled “Investors Face a Shrinking Stock Supply” that “Large companies have developed such an advantage through their massive sales forces an big budgets that they suck up most of the profit to be had leaving scraps for smaller ones.”  It has also been reported that the top two or three companies in any industry not only dominate market share but also take the lions share of the profits too, leaving the companies at the bottom to grapple over the slimmest of margins.  (It’s the reason companies like General Electric exit any market that they can’t dominate.)

Curious to see where your company falls in the pack, check out the table that I created: 2007 Receipts of US Companies Summary Table

There are lots of long standing business beliefs and practices that are keeping companies from realizing their full potential.  Research of companies that broke through the $1 billion barrier revealed the following:

  1. The companies had a bold Vision to build something bigger than any one person.
  2. Everyone put the Company BEFORE their own Personal Glory.
  3. Customers were deemed priority number one!
  4. Actively practiced Servant Leadership.
  5. Executives lead by example.
  6. Leaders successfully shifted from Commander to Coach as the company grew.
  7. The organization successfully balanced between giving customers what they wanted, quickly responding to the marketplace and keeping costs low.
  8. Open communication was standard operating procedure.
  9. Employees were actively encouraged to challenge the status quo and always strive for finding better ways to get things done!
  10. The organization continuously developed the capabilities of its people, processes and systems.
  11. All employees up-skilled or were reassigned, including the Founder!
  12. The companies acted on the right risks and took increasingly bigger risks to build strategic advantage.
  13. The employees shared in the organizations success.
  14. Company leaders used the tough times to refocus the workforce on its most important initiatives for the future.
  15. The organizations capitalized on outside resources and ideas to help take their organizations to the next level.

Source: The Breakthrough Company: How Everyday Companies Become Extraordinary Performers, by Keith R. McFarland, published by Crown Business, New York, in 2008.

How does your company stack up when it comes to breakthrough business practices?  Are those practices holding you back?

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