As you probably know, ComNet surpassed the $100 million revenue mark in 2016. As a matter of perspective, the company has doubled in size over the past 4 years. This didn’t just happen. It was part of a strategic plan adopted by senior management. You are all to be commended, as none of this could have come about without the dedication and hard work of ComNet’s employees. However, this isn’t the end of the story. It’s only one of many milestones in the history of ComNet. As we were going through this process, I don’t know that you were given the reasons for setting revenue growth as a target. Revenue growth is a characteristic of healthy companies, but why?
- ComNet has a unique customer base, which includes many of the largest companies in the world. These are complicated businesses, with rapidly expanding service needs. If we don’t grow with our customers, then our competition will. ComNet is in a continual race to maintain its value proposition with its enterprise customers. You would be very surprised by how many of our new customers were previously supported by contractors that didn’t grow with them. The same environment exists with Bid/Award opportunities that are increasingly being directed to contractors that can provide a broad range of services, thereby minimizing the risk to the general contractor.
- Expanding our geographic coverage is expensive. The same can be said for adding new types of service, such as AV and Security. It also holds true for areas of internal development, such as Safety, Quality Control, and in-house recruiting. This all has to be financed, and the most effective way to do this is through revenue growth.
- Revenue growth results in a more diversified customer base. Diversification makes the company more stable and enables us to fight economic threats.
- Revenue growth provides greater opportunities for advancement within the company. Without opportunity for advancement, talented people will often leave for a more fulfilling employment opportunity.
- Larger companies have more bargaining power with their supply chain.
- Growing companies are better able to support the increasingly burdensome regulatory and administrative requirements.
As you can see, revenue growth isn’t a luxury, it’s a necessity. It has enabled ComNet to get to where it is today. However, as I noted earlier, it’s only a milestone….not the finish line. Business isn’t static, and our customers aren’t sitting still. Growth isn’t the answer to everything, but it’s certainly a critical part of the solution.
-Alex Merrifield, President