About Us

Here Is All You Need to Know about the Revenue Growth of Your Company

By Ashutosh Kumar
As a way to increase their upper and lower lines, several consumer packaged goods (CPG) companies are resorting to revenue growth management.

Market volatility and network disruptions, particularly transitions to e-commerce or direct marketing, are eroding the profitability of consumer-packaged goods (CPG) manufacturers. GrowthJockey assists CPG firms in retaliating against these changes by revamping their Revenue Growth management strategies.

Organisations specializing in consumer products have figured out how to get substantial benefits from controlling their revenue growth. However, the market now demands that they raise their standards again.

Growth in sales may be estimated using a straightforward formula, but it is far from the whole story. The key is to figure out how the statistic relates to the rest of your company's operational records and what role the internal systems and procedures play in producing that result.

Here is a guide to achieving success in the same.

What is Revenue Growth?

A graphic on revenue growth

Simply put, Revenue Growth is an increase in revenue earned by a company during a specific time period compared to the same time period the year before. That is, it represents the difference between your earnings this year and those of the previous year.

Revenue is often misunderstood to mean sales or profits. Let us quickly compare and contrast the three:

1. Revenue

Revenue is the total amount of money earned from all sources, such as sales, acquisitions, royalties, commissions, and other types of income. Expenses are not taken into consideration.

2. Sales

In business, sales are the sum of money gained via the sale of goods and services.

3. Profit

Profit is calculated by slicing income by spending.

Another critical distinction between sales, profits, and revenue is that the former are often outcome-focused, while revenue growth is closer to a tactic than an objective.

PwC's Global Risk Survey for 2022 found that 23% of consumer goods businesses anticipate a 6% to 10% increase in revenue. Several Consumer Packaged Goods (CPG) companies are resorting to revenue growth management to increase their upper and lower lines. They are also working to develop the competencies necessary to grow their own net revenue.

Why Is Revenue Growth More Important Than Other Forms of Growth?

The expansive character of revenue growth enables you to have a complete understanding of what is working, what is not working, and how to repair problems. Growth Jockey analyses all the essential organisational structures to determine company revenue growth.

An equation for revenue growth by Growth Jockey informs initiatives in other areas, such as:

  • Acquisition, commitment, and performance with customers

  • Valuations

  • Human resources

  • Professional development

  • Marketing

  • Sales

If your income is not meeting your expectations, you may more readily examine the performance of each area's tactics to identify and fix trouble spots.

The temptation to focus on profitability growth instead of revenue growth might be strong. However, although both should be considered, you should often evaluate revenue growth first. Earnings are comprised of revenue minus expenses. You may modestly increase your total profitability by reducing costs, but without an increase in sales, this is not a sustainable strategy.

Concentrating on revenue growth is advantageous since it incorporates everything and defines your business's overall development. It enables you to identify problems, resolve them, and maintain the growth of your company's revenue.

Importance of Revenue Growth in Startups valuation

As a startup evolves, its value is expected to rise. This is predicated on the premise that a company with rapid growth is far more likely to succeed than one with slower growth. According to research from Small Business Trends, 29% of new businesses fail due to a lack of financial resources, whereas 14% ail due to ineffective marketing.

Consequently, there are a number of factors to consider when evaluating the influence of revenue growth in startup valuation.

  • First, not all forms of revenue are made equal. For instance, income from clients bound into long-term deals is much more significant than revenue from clients who might terminate the contract at any moment.

  • Second, the value multiple might change based on the startup's development stage. The market may evaluate an early-stage business with rapid growth at a greater return than a relatively late firm with slower growth.

  • Third, the value multiple may vary by industry. For instance, businesses in the technology sector demand valuation multiples that are often greater than companies in other industries.

  • Lastly, it is essential to realise that the value of a business is dynamic. A company experiencing rapid growth now may see slower growth tomorrow, and its price will reflect this.

In conclusion, the influence of revenue growth on the values of startups may be substantial.

How Does Revenue Growth Management Benefit Start-Ups?

A diagram  on revenue growth management

There are several advantages associated with revenue growth management. Accomplishing it may be beneficial to the success of your firm. Here are a few instances where revenue growth might benefit your company:

It Provides Additional Capital for Business Reinvestment

The ability to invest more of your profits back into your company is one of the many benefits that come along with expanding your company's income. This paves the way for investing in new employees, enhancing current processes, or even simply making your product better.

It Aids in Attracting More Investment

Increasing your company's revenue is a great way to pique the interest of potential investors. Investors like to put their money into expanding businesses, so if you can demonstrate that yours is, they will be more inclined to put money into it.

Deeper Analysis

Furthermore, RGM has the potential to serve as an analytics tool, providing a means of analysing and extracting crucial business data and trends, such as those seen in the market at large. It is helpful for spotting trends in large datasets.

Less time spent gathering data equals more time spent evaluating company patterns, which in turn provides a complete view of how various market segments perform. Because of this, you will be able to make wiser choices in the future.

Effective Decision Making through AI

In order to make judgements more quickly, accurately, and consistently, businesses are turning to AI. As a result, RGMs are that can make sound decisions might be crucial for incorporating certain aspects of risk management into daily business procedures. By combining RGM with AI, businesses may better streamline operations, conduct in-depth analyses, and settle on strategic courses of action.

Cost Reduction

At Growth Jockey, we realise the cost of a revenue management system might be prohibitive for certain companies. However, it helps businesses save money in the long run. Consequently, maximising prediction data may boost income and save expenses across the board.

How We at GrowthJockey Do It ?

We begin by assisting you in developing the optimal approach for net revenue management, one that recognises the requirement to create and implement revenue growth management measures per market. Our revenue management experts design market-specific plans for revenue growth in businesses using their regional experience.

Collectively, we use several mechanisms to transform our customers' net revenue management plans into actions that may rapidly enhance performance and create new value.

We strengthen our technique for net revenue monitoring in Consumer-Packaged Goods with several enablers to assist you in developing the essential revenue growth management skills to ensure long-term success.

Wrapping Up

As competition rises in the CPG market, you will need more sophisticated tools for pricing, promotions, selection, and trade investment. As CPG companies, you should ponder the percentage of Revenue Growth Management's potential you are tapping into. You should ask if the rate of your development is outpacing that of your rivals and retail partners.

At GrowthJockey, we help you formulate RGM strategies based on the answers to these questions so that you may put yourselves in the best possible position to emerge as commercial winners.

At GrowthJockey, our unwavering dedication lies in creating customised models that effectively tackle the crucial challenges confronted by our clients across diverse industries. Regardless of the size of your company, whether a small-scale enterprise or a large corporation, you can now leverage cutting-edge technology to drive revenue growth.

Take the decisive step towards unlocking the next level of growth for your brand by contacting us today!

3rd Floor, GJPL, Time Square Building, Sushant Lok, Gurugram, 120009
Ward No. 06, Prevejabad, Sonpur Nitar Chand Wari, Sonpur, Saran, Bihar, 841101
Shreeji Tower, 3rd Floor, Guwahati, Assam, 781005
25/23, Karpaga Vinayagar Kovil St, Kandhanchanvadi Perungudi, Kancheepuram, Chennai, Tamil Nadu, 600096
19 Graham Street, Irvine, CA - 92617, US
3rd Floor, GJPL, Time Square Building, Sushant Lok, Gurugram, 120009
Ward No. 06, Prevejabad, Sonpur Nitar Chand Wari, Sonpur, Saran, Bihar, 841101
Shreeji Tower, 3rd Floor, Guwahati, Assam, 781005
25/23, Karpaga Vinayagar Kovil St, Kandhanchanvadi Perungudi, Kancheepuram, Chennai, Tamil Nadu, 600096
19 Graham Street, Irvine, CA - 92617, US