Diagnostic Tool
Growth Readiness Evaluator
This diagnostic tests whether the current financial and operational structure of the business can support revenue growth without creating cash shortfalls, margin deterioration, or operational strain. It models the additional working capital, fixed cost leverage, and cash generation required to fund a defined growth target.
Growth creates financial stress before it creates financial benefit. Revenue increases require more working capital to fund debtor cycles and inventory before cash is collected. Fixed costs may need to step up to serve new customers or markets. Margin quality can change if growth is achieved by discounting or through lower-margin channels. A business that looks well-positioned on a static basis may lack the cash, capacity, or margin structure to absorb the costs of growth.
Understanding growth readiness matters because it separates the desire to grow from the structural ability to fund growth. Businesses that expand without identifying binding constraints in advance often find that growth accelerates cash pressure rather than relieving it. This diagnostic identifies which constraint would bind first and quantifies the capital or structural change required to resolve it.
Current financial position
Total current annual revenue.
Current gross profit as a percentage of revenue.
Total annual overhead and fixed operating costs.
Cash on hand plus undrawn credit facility available for operations.
Average days to collect from customers currently.
Average days of stock held. Enter 0 if not applicable.
Growth scenario
Percentage increase in revenue being targeted or planned.
Expected gross margin on the incremental revenue if different from current.
Fixed cost step-up needed to support growth (staff, premises, systems).
Many of the inputs requested by this diagnostic are metrics that disciplined operators typically monitor through internal management reporting. If a number requested here is not immediately available it often indicates that the current reporting structure does not isolate that metric clearly. Businesses operating with strong financial visibility normally track these figures regularly because they influence pricing decisions, supplier negotiations, operational planning, capital allocation, and risk management. Part of the work performed by MJB Strategic often involves helping companies design internal reporting structures that surface these metrics consistently so management can make better operational decisions.