Revenue Growth

Year-over-year top-line growth, sustained and explainable.

Family: Earnings
Position: B3
Scored: Against a target

1:53

Whiteboard session

Nick on revenue growth

Nick works through this element as in an FNDRS workshop: what a buyer is really asking, how the score moves, and the first thing to fix.

In this session

01Not your best yearOwners are proud of their best year, and should be, but one year does not set the value. A buyer looks back as well as forward: the story the last three years tell is what predicts the future for them, and they are paying for where the business can predictably go, not where it is today.
02Three wordsRevenue needs to be predictable, profitable, and scalable. A buyer wants to see that the revenue of the last three years continues through the next three, and keeps growing long after you are gone. Revenue that is all over the place is not worth much to a buyer.
03The testCan the business grow 20% year over year, and does the record say so? If not, it can still be acquired, but not at the value you want and deserve. That is why predictable revenue models have to be installed in the business.
04What is builtStart with the historic average of year-over-year growth, then the key drivers that raise revenue over the next three years: the trailing twelve months and the next twelve months, TTM and NTM. Revenue is one of the 36 elements that come together to maximize the business.

Nick LongCEO and co-founder

Table 1. Entry 07 in the Exit Elements specification, version 1.4.
Symbol	Rv	Number	07	Family	Rv Earnings	Position	B3
Scored as	Against a target	Compounds	None	Worked in	Scale	Pillar	Growth potential

§1 Definition

What revenue growth is

Year-over-year top-line growth, sustained and explainable.

Revenue Growth is how fast your top line is increasing year over year, and whether that growth is sustained and explainable. Buyers pay for the future, and past growth is the best evidence of it. Steady 15% growth for three years is worth more than one 60% jump followed by two flat years.

A staffing firm that grew because of one large placement contract has growth that a buyer will discount. A dental group that added one location per year on the same playbook has growth a buyer will underwrite.

Use cases

Separating organic growth from one-time events in your own reporting, setting a growth target that your team and cash can support, and being able to explain each year’s change in one sentence.

The earnings family

The economic engine. Earnings elements determine the size of the number a multiple is applied to.

Earnings. The engine. Pricing, margin, growth, overhead, recurring revenue, and retention set the number a buyer multiplies.

Meet the family

§2 Measurement

What the assay measures

Three-year revenue CAGR, with the share attributable to organic versus one-time sources.

Critical gapLeaking valueDevelopingStrong60Today100Target

Critical gap: 0 to 24
Leaking value: 25 to 49
Developing: 50 to 74
Strong: 75 to 100

Figure 1. Sample assay for Acme Industrial: revenue growth scores 81 today (strong) against a target of 84 (strong). Sample scores, not a client. Your own assay comes from the exit score and the valuation.

How the scale reads

Every element is scored from 0 to 100 against what a sophisticated buyer expects at close.
Risk elements are scored as control: higher is safer.
Inputs are recorded, not targeted.
Outcomes are derived from their feeding families.

Figure 2. Radar of the earnings series (Acme Industrial sample): the filled shape is today, the dashed outline is target, and the marked axis is Revenue Growth.

§3 Profile

The earnings family in profile

Today's score for every element in the family, drawn as one shape against the dashed outline of the targets. The shape shows where the family is thin: revenue growth is the marked axis.

Tm Tl Cp Dm Pr Gm Rv Oe Rr Rt Cf Pd Md Se Ip Br Ta Sy Od Dd Cc Kp Lc Td Sp Ac Dr Sc Tx Es In Ap Ev Op Fr Lg

Figure 3. Revenue Growth at B3 in the standard table: column B, row 3. Columns group the families; the wealth series runs beneath.

§4 Position

The earnings series

6 elements share the family. Read them together: a buyer prices them as a group.

§5 Compounds

Revenue Growth stands alone

This element is not part of a named compound. It is priced on its own, through the family it belongs to.

§6 In the FNDRS journey

Where revenue growth gets worked

The assay scores it. The process, the pillars, and the platform move it. Table 2 lists every place this element is on the agenda.

Table 2. Where element 07 appears in the FNDRS journey.
Where	What happens	Alongside	Go
StageScale	Scale with intention. Grow revenue, profit, capacity, and capability without adding fragility or owner dependence. The earnings engine and the multiple, worked in order of dollar impact.	Pr Gm Oe Rr Rt Md Se Ip Br Ta Sp	The process
Pillar of valueGrowth potential	Not a hockey stick, a plan with evidence. Buyers pay for growth they can underwrite: a market with room, pricing that holds, and a motion that does not depend on the owner closing every deal.	Dm Pr Ip Ta Br Sy	The pillar

Figure 4. Revenue Growth against the neutral pivot (Acme Industrial sample): above 50 adds premium to the market base multiple, below 50 subtracts. The hollow mark is the target.

§7 In the valuation

What the FNDRS valuation reads for revenue growth

Measured High leverage

The FNDRS valuation reads this element directly. Its assay score derives from the same answers the engine scores, so the assay and the valuation can never disagree.

What FNDRS reads

Three-year revenue trend, expected growth, and profit stability, with growth also earning credit in the cross-check method.

Guardrail: revenue falling by a tenth a year or more earns no net bonus.

How the table meets the number

Find out where your revenue growth stands

The exit score is the first assay: fifteen minutes, six pillars, and a first read on the elements that matter most.

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