Growth Handbook (Part 1)

Operating, Sales & Marketing, Search Funds

1. Introduction & Objectives

Search fund entrepreneurs and investors develop thoughtful and well-researched growth assumptions when underwriting deals. We construct detailed models and populate rows of Excel, backed by insights from expert calls and hours of analysis. We invest millions of dollars based on these assumptions, which will turn into millions more if the even conservative base case is achieved.

But the world is always messier than any PowerPoint or financial model suggests. Achieving profitable revenue growth in a small business requires empowering one group of human beings (employees) to persuade another group of human beings (customers) to trade their money or their company’s money for a good or service. That endeavor is anything but easy, and even the best-made plans require flexibility and agility as you the CEO learn more about your company and the nuances of your market once you’re inside the business.

This guide is written for searchers-CEOs of lower mid-market businesses navigating that messy reality and has three main objectives:

Provide frameworks to CEOs for identifying and prioritizing growth opportunities
Equip CEOs with actionable tools and templates for executing those growth initiatives
Give active searchers practical examples of growth levers to inform thesis development and underwriting

We are open sourcing most of the content of this guide–published as a series of blog posts–but as you’ll see there are a few resources gated for teams we’ve backed and friends of WSC. If you’d like to receive access to those, please reach out.

Note from the Author:

While no set of strategies and tactics is foolproof, the recommendations contained in this guide are based on hard-won lessons learned throughout ten years of helping mid-market companies scale—first as the founder of a business that led digital growth engagements for 40+ clients (mostly sponsor-backed companies), then as Director of Portfolio Operations for a mid-market PE firm in New York, and now as an investor and supporter of search entrepreneurs at WSC. In some cases, I’ve learned from successes and in plenty of others I’ve learned from failures to achieve growth targets. What’s clear in hindsight is that the best-performing growth companies:

Relentlessly focus on understanding the needs of their customers and recognize that even a B2B company customer is a collection of individuals with distinct and sometimes contradicting needs
Can clearly and simply articulate their company’s value proposition—from the CEO to frontline employee
Focus on the fundamentals and resist chasing fads and “growth hacks”

2. Developing Goals & Customer Strategy

Prerequisites Checklist

Before allocating additional dollars or energy to driving revenue growth, it is important to validate if a few basic statements are true. If not, revenue growth can be value destructive and worse than not growing at all. Those factors:

Healthy Unit Economics: Do you make money on each unit you sell or job your team performs? “We lose money on each sale but we make it up on volume” is not a winning strategy.
Solid Customer Satisfaction: Are your current customers happy? If not, if we bring in new customers are they likely to become unsatisfied themselves?
Capacity to Fulfill Increased Demand: “Leading with sales” and driving revenue growth first, then scrambling to fulfill demand is often an effective strategy (and better than over-investing in capacity for demand that never materializes), but it’s essential to have some viable path to scaling to meet increased volume.

Pre-Requisite	KPIs & Diagnostic Approach
Healthy Unit Economics	Segment revenue across multiple cuts of product line, customer type and period and validate positive contribution margin (note: we are less concerned about the role of Customer Acquisition Cost in unit economics at this phase because managing CAC will be a focus of any growth efforts)
Solid Customer Satisfaction	Survey customers and analyze Net Promoter Score
Capacity to Fulfill Increased Demand	Will vary by business type, but for service businesses key factors are current labor utilization, hiring pipeline and time to onboard new employees

Project Plan for Setting Goals & Customer Strategy

It is tempting to jump straight to tactical improvement opportunities when taking over the reigns of an operating company. However, while achieving some quick wins can be valuable for building momentum and establishing credibility, failing to set clear objectives and strategy almost always undermines the impact of those tactics.

Additionally, driving alignment—making sure all your key employees and external partners understand and are bought into your strategy—is critical for scaling your organization and removing the CEO as a bottleneck to getting things done. Running a brief but thoughtful customer strategy development process that includes your employees can be worthwhile for driving that alignment, even if it produces conclusions that you as the CEO already had drawn.

The key principle is pragmatism and speed; the process below can be completed in two weeks or less. Our mission is to develop a compelling customer strategy anchored in real customer understanding without engaging in analysis theatrics or boiling the ocean.

Activity	1. Growth Objectives & Current State Workshop
Time	2-3 Hours
Participants	Leadership Team (Include Mid-Level Sales/Marketing Managers)
Resource(s)	Marketing Brief Framework [Request Resource] Sales Funnel Template [Request Resource]
Description	Get the key stakeholders in a room and discuss your goals Don’t settle for generic “growth” goals; get specific and be explicit about relative priorities; example goals: Targeted growth in specific product lines, regions, etc. Efficiency or cost reduction (i.e., reduce Customer Acquisition Cost by reducing marketing spend or by shifting to lower-touch sales channels) Revenue growth at any positive ROI (versus highly profitable growth above a specific marketing ROI hurdle rate) Build momentum with near-term revenue growth (i.e., focus on speed to some progress more than total size of opportunity) Leverage Marketing Brief Framework to drive discussion Documents goals Succinctly captures historical learnings and current hypotheses This is a living document–don’t worry about perfection Diagram sales ands marketing funnel as it exists today Whiteboard the full customer journey, from unique web visitors to inquiries to demos to opportunity stages to closed sales—all the way through post-close retention, churn and upsells (or whatever stages are relevant) Populate your funnel diagram data with preliminary data Use whatever data you can get in less than 1 hour; if this means you have no hard data and can only use your sales lead’s best guess, then use that Note: a common mistake is to over-focus on top-of-funnel opportunities (i.e., lead volume) while lower-hanging-fruit opportunities exist. Sales people always want more leads and it can be easy for non-confrontational leaders to focus on increasing lead volume instead of asking the question “why aren’t we closing more of the leads that we do have?” because that line of inquiry can put sales people on the defensive. However, it often is much easier to increase a sales close rate from 30% to 35% than to increase lead volume by 17% (which have equivalent impact on revenue, all else equal). Additionally, tightening up the efficiency of a sales funnel is being a good steward of capital since it’s unwise to spend meaningful dollars on new leads if many of them will be mismanaged.

Activity	2. Customer Interviews – Phase A
Time	3-5 Days
Participants	Leadership Team (Include Mid-Level Sales/Marketing Managers)
Resource(s)	Customer Interview Guide
Description	Call customers directly and sit in on sales calls Your goal here is to connect with your happiest and best customers, then identify their common denominators so you can systematically acquire more like them If you hear areas to improve your product or solution offering, fine, but this exercise is a rare situation where you are not searching for ways to improve customer service; we want to identify who is really happy with what we already provide. If you have a backlog of customer complaint tickets, try talking to some customers who haven’t filed one in months (but who are still heavy users). Anyone can be made happy if we spend more money to make our product or offering better, but a helpful constraint for sales and marketing teams—where they really earn their salary—is if they can sell what you already have. Remember that organizations don’t buy anything—they’re not sentient beings that sign contracts—individual people who happen to be part of organizations buy things. Focus your discovery and learning on the goals of the collection of individuals you’re marketing to. How is their individual success measured? What’s standing between them and a promotion? What causes people to lose their jobs?

Activity	3. Customer Persona Development Working Session
Time	1.5 – 2 Hours
Participants	Leadership Team (Include Mid-Level Sales/Marketing Managers)
Resource(s)	Customer Personas Shell [Request Resource]
Description	Customer personas are fictionalized, composite profiles that represent stakeholders in the buying process Use initial customer interviews and organizational knowledge to document personas Key is to map out the different types of stakeholders involved in the buying process, including recommenders, decision-makers and saboteurs Like financial models, all personas are wrong but some are useful

Activity	4. Customer Interviews – Phase B
Time	3-5 Days
Participants	Leadership Team (Include Mid-Level Sales/Marketing Managers)
Description	Conduct more customer interviews to refine and test your persona hypotheses

Activity	5. Final Write-Up & Communication
Time	1 Day
Participants	Project Lead + Management Team
Resource(s)	–
Description	Finalize marketing brief and personas Present conclusions in all-hands meeting Helpful for the CEO to avoid doing all the talking here; empower other leadership team members (especially those that have been with the organization before the acquisition) to present key learnings to drive buy-in, both for the manager who “owns” the strategy and for the team members who see the plan was not developed in an ivory tower

Marketing Brief Framework

Topic	Discussion Notes
Background & Context · Company history · Business overview · Products/services · Industry and key competitors	[Insert Notes]
Objectives & KPIs · Key business objectives and priorities · Key Performance Indicators (KPIs) · Potential challenges and roadblocks · Customer lifetime value · Acceptable cost per lead	[Insert Notes]
Target Audience · Demographics, psychographics · Key pain point(s) · Affiliations · Possible search queries	[Insert Notes]
Key Messaging & Support · Elevator pitch · Ancillary tenets of value proposition · Support for reasons to buy	[Insert Notes]
Voice & Tone · Targeted positioning · Key feelings and emotions	[Insert Notes]

Customer Persona Template

[Contact WSC for Resource]

Customer Interview Guide

This is simply a starting framework. Interviews are intentionally conversational. Not every question is asked in every interview and follow-up questions not on this list are asked based on discussions.

How would you articulate your own job description?
What’s a day in the life? Walk me through yesterday.
How do you measure success in your role?
How do others measure your success (if different metrics)? Who measures that?
Who do you directly manage (numbers, role)?
Who do you report to?
Let’s talk about [business process]. How was it done before [Company]?
- How many hours per week did you personally spend on [business process]?
- Any issues encountered? (Dig/elaborate)
How did you first learn about [Company]?
How would you describe what [Company] is?
What were your expectations or hopes for [Company]?
[Contact WSC to Request Rest of Resource…]