Private equity growth plan

What a private equity growth plan is for

The underwrite already assumed the company gets better. A private equity growth plan says how. Better can mean more revenue from a product the customers already want, a margin that was leaking through price or waste, or cash that was stuck in working capital. If a move does not touch one of those, it is not yet a plan. It is a theme.

Sponsors get into trouble when the plan is a copy of the banker's commercial section. That section is written to sell the process. Your plan is written to survive ownership. Cut anything the management team cannot name an owner for. Cut anything that needs a market you have not checked. The private equity deal lifecycle has no spare year for a move that was only there to make the memo look complete.

A growth plan is also a constraint on LBO valuation. If the returns need a pace the company has never shown, either the plan gets more specific or the entry price comes down. Pretending those are separate workstreams is how the private equity deal process drifts.

Worked sequence on the Growth Planning Desk

Read the entry case first. Write the earnings level the returns need, in words, not as a target you hope to hit. List candidate moves. Keep three. For each one, name the owner, the first ninety days, and the metric you will read on the portfolio desk later. Kill the fourth move even if it is interesting. Capacity is the scarce asset in a private equity growth plan.

Then ask what would falsify the plan. A customer concentration you treated as a growth engine. A price increase the sales team will not hold. A system project with no operator. Write the falsifier next to the move. Hand the three moves to the Total Value Creation Desk so the bridge is built from the plan, not from a template.

• Deal lifecycle hub
• Private equity value creation
• Value Bridge Builder

What a weak plan costs later

Value creation slides that are not tied to a plan become a list of percentages. Portfolio reviews become storytelling. The exit memo repeats the entry memo because nothing in the middle was specific enough to update. A private equity growth plan is the document you are allowed to mark up when the company teaches you something.

Practice by cutting. Take a long thesis and force it into three moves with owners. If you cannot staff a move, it is not in the plan. That editing is the skill. The Growth Planning Desk is where you rehearse it on the same company you sourced and valued.

A private equity growth plan should also say what you will not do. Naming the rejected move protects the hold from scope creep when a board meeting gets ambitious. Put the rejection next to the three moves so portfolio management can see that a new idea is new, and has to earn a place, rather than sneaking in as a reminder of the entry memo.