The document discusses strategies for growing small to medium enterprises (SMEs) at a rapid pace of at least 20% annually, referred to as "gazelles." It uses a hypothetical company, Methoni, as an example to illustrate how an SME needs to generate new non-existing product and customer (NPNC) sales to both replace natural declines in existing product and customer (EPEC) sales as well as achieve growth targets. The document analyzes Methoni's options for investing in the "Product Customer matrix" and notes that while NPNC carries the most risk, it also represents the potential for outsized returns - however, like many SMEs, Methoni will likely need outside assistance to successfully execute

1. ©2015 Voyager Strategies Slide 1
So, we want more regional
gazelles?
Because they’re a brilliant source
of high value jobs

2. ©2015 Voyager Strategies Slide 2
Gazelles are nimble beasts
 Grow at ≥ 20% pa
 Invest  10% of Sales
pa in development
 Invest  10% Sales pa in
sales & marketing
 Innovative, outward
looking management
 Readily use external
help and investment

3. ©2015 Voyager Strategies Slide 3
Just staying in place
Most companies suffer a fall-off in
their sales of Existing Products to
Existing Customers (EPEC)
Methoni is a $2m pa SME with an
annual EPEC retention rate of 90%
Methoni’s EPEC sales will erode by
10% or $200k in next year
Therefore Methoni needs $200k in
new non EPEC sales just to stay in
place

4. ©2015 Voyager Strategies Slide 4
To grow at 20% pa, Methoni’s next
year’s sales have to be $2.4m – an
increase of $400k in non-EPEC sales
Overall, then, Methoni has to
generate an extra $600k in non-
EPEC sales
What does Methoni have to do?
Now, moving ahead

5. ©2015 Voyager Strategies Slide 5
NPEC
Alternate next step based
on customer loyalty and
good information
Customers may saturate
NPNC
Highest risk
Likely higher costs, longer
payback time
Questions of competence
Can be huge success
EPEC
Sales tend to decline
Margins tend decline
Main source of cash
Preserve
EPNC
Usually next step to get
best value out of existing
development investment
But product will tire,
competition increase
New
(N)
Existing
(E)
Existing New
Products(P)
Customers (C)
The Growth Options Map

6. ©2015 Voyager Strategies Slide 6
Methoni aims for a pre-tax profit
(EBITDA) of 15%
Assumes investment in Y1 will lead to
3 years’ sales of $600k pa = $1.8m, or
total new EBITDA of $270k (at 15%
pa)
To generate a positive return,
development spend has to be less
than total EBITDA
Therefore company can’t invest more
than $270k in that new sales stream –
and the less the better to get the
result
Investment considerations

7. ©2015 Voyager Strategies Slide 7
So, where is Methoni going to put its
money on the Product Customer
matrix?
EPNC?
NPEC? NPNC?

8. ©2015 Voyager Strategies Slide 8
Not so easy. The company is likely to need
help with …
Lifting general management
capability to successfully handling
higher levels of activity
Sales & marketing reviews to
maximise EPEC retention rates and
look for customer referrals and new
product opportunities
Business case analysis to choose best
EPNC, NPEC, and NPNC options

9. ©2015 Voyager Strategies Slide 9
Two questions for regional
development strategists
Do we know who our Region’s
Methonis are?
Is there the right assistance in place
to help them?