There’s a saying that, when the tide goes out you see who’s been swimming naked.
A few weeks back, I legitimately netted the annual accounts of a competitor. It’s a private business and they’ve had pretty good growth to much marketing fanfare, so I was intrigued. I checked profitability and scanned the balance sheet. What I saw was alarming.
They have large stock levels, no profit and little remaining cash. Furthermore, they have doubled down on cheap imports and regular discounting. I smelled brittle.
Our business is also planning growth and this often means more stock, which you need to pay for up front.
To date, we’ve funded everything from profits so acceleration could mean raising capital and we’d be beholden to their terms. Plus we’ve committed to designing and making gear that lasts. It’s more expensive but it drives less consumption. So, what’s the hurry?
I grew up on a scraggy hill country sheep and beef farm in Southern Hawkes Bay where the mindset was inter-generational. Dad talked about building something for us kids and his immense work ethic followed. There was land conversion, but trees were planted and the streams contained fresh water crayfish. Today, many incredible farmers are restoring land and waterways at their own expense. This long-term view is … well … slow. And that grates against society’s admiration of high [financial] growth companies.
Our friends might pull off a spectacular exit to some venture capital company and not lose a wink of sleep about their cheap import business model. But when you reflect on your own organisation, how good does it feel to have a stable economic and environmental platform that also supports long-term growth? Call me lame but I just don’t want to be that person when the tide goes out.
If you’ve read this far, please note in the comments below companies you’ve been close to that built a long-term economic and environmental platform. There’ll be some unsung heroes. GreenHalo’s mission is to support and grow a community of Green Angels and I’d love to learn more about them.
Chris Bailey
GreenHalo Founder
Comments