The Secret to Business Growth Is Building Up Financial Strength | Greg Crabtree

March 17, 2021

Episode Summary

Greg Crabtree is a master of commanding the numbers in business, and he’s got not only the expertise but also the experience to back it up. For one, he founded his own firm Crabtree, Rowe, and Berger that focused on helping entrepreneurs build their own economic engine. Eventually, it was named as a part of the prestigious INC 5000 list in 2019 before he merged it with another company to broaden its impact. He’s also the author of the “Simple Numbers” books that share core principles of how to turn one’s business into an exceptionally profitable venture. Moreover, he’s also a frequent speaker to groups like EO, Scaling Up (Gazelles), Vistage, and ACETECH, and has presented in over 15 countries.

Episode Note

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When it comes to your business’ profitability and growth, it’s important to know if you’re looking at the right measures or even the right benchmarks. It’s not found in the tax returns or in traditional accounting principles where profit runs the risk of being overstated or understated. Measuring the actual health of your business entails looking at your number you might not be familiar with like, core capital target, your reinvestment in the initial capital, your direct and management labor, and productivity measures, among others. Today, speaker, author, and entrepreneur, Greg Crabtree joins me on the show to break down some elite financial savvy for entrepreneurs from his widely acclaimed Simple Numbers books.

10:31 How the best companies grew in 2020

15:50 Using debt versus your own re-investment in growing the company

17:50 Greg talks about setting the right amount of cash to be used as your core capital target

20:58 The five-step process of protecting your business’ money

29:00 Return of invested capital is a crucial measure to determine the health of the business

30:10 Greg shares some insights on how entrepreneurs can measure effectiveness in optimizing their launch capital 

46:26 The effectiveness of your management labor is the one secret to profitability

54:17 Data of productivity measure is a telltale indicator of profitability 

57:28 Greg is a firm believer of how marketing must precede sales

1:10:11 A wrap up of key principles to remember: figure out what the market needs, find a way to do it profitably, and understand that return of investment capital

1:14:10 Greg’s passionate plea to entrepreneurs

“Understand what health in full capitalization looks like for the business.”




Episode Transcript

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