5 Steps to Test a Company for Growth

DociReport Industry

What’s the point of the Good Business website if one doesn’t have a way of assessing a Good Business. A Good Business is a Company who has the ability to grow. Below is a list of 5 characteristics that all growth companies should meet. These characteristics will find low risk companies with above-average rewards.

  1. A dominant position in a Growth Industry.
    • A company must have beaten the industry averages consistently over the past 10 years.
  2. A long record of rising earnings and medium to high profit margins.
    • A company needs to have an after-tax profit margin of over 7%, and must have had consistent dividends for the past 10 years. If a company has an after-tax profit margin of 10% – that is excellent.
  3. Great leaders and managers.
    • The leaders must have worked with the company for more than 10 years.
      • One example is that General Electric’s top 175 managers have an average of over 20 years with the company. This shows that these individuals understand their company thoroughly.
  4. A commitment to Research and Development programs.
    • A company must have a vision for the future. They must invest in technology, research and employee training programs to grow the company and sustain its competitiveness.
  5. A fair immunity to Government Regulations.
    • Government Regulations can help and sometimes greatly affect a company’s bottom line in terms of costs. Having immunity to regulation will help a company better assess future risk.

'Sure, it's a great invention, but does it comply with all government guidelines?'


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