What Is a Normal Healthy Growing Company?
It’s a Fully Operational, Performing, Small Business
If you read my stuff regularly, you’ll see me frequently refer to the Normal Healthy Growing Company. It’s a shorthand I use to describe the kind of business every small business owner should aspire to build, and one that we can use as an example. I developed the NHGC concept while teaching finance at Humber College in 2008 as a way of identifying a plain old company that’s not a startup, but rather a company that is not only profitable on paper, but also cash-flow positive, financially resilient, and capable of reinvesting in its own future.
It’s essentially the same thing as a Fully Operational Performing Small Business, which I used as the model and target audience for my first book. At the bottom of this post is an excerpt that explains the concept.
Here’s what I mean by it:
It’s Normal: It’s not some unicorn startup with millions in venture backing or a corner case drowning in subsidies or founder heroics. It operates under typical conditions: customers come in, products/services go out, bills get paid.
It’s Healthy: It turns a consistent profit, pays its bills on time, has a reasonable level of debt and isn’t relying on last-minute miracles to make payroll. In financial terms, its operating cash flow is reliably positive, meaning the core business generates more cash than it consumes most of the time.
It’s Growing: Growth doesn’t mean 10X overnight. It means the company is reinvesting profits (or responsibly using financing) to expand capacity, improve operations, reach new markets, or deepen its customer base, and it’s positioned in an industry that has reasonable growth. The implications are that it will eventually need to buy new equipment, open a second location, hire staff, or invest in marketing, and it will do so in a measured, cash-aware way.
Why It Matters
Most financial advice doesn’t work unless you’re starting from this kind of baseline. Cash flow tactics, financing strategies, even hiring decisions all assume you’re operating something close to a Normal Healthy Growing Company.
So when I reference this in my posts, I’m talking about a business that isn’t in crisis mode, isn’t coasting, and isn’t burning investor cash while building something real, one sale and one dollar at a time.
If you need help becoming a Normal Healthy Growing Company, talk to Brad.
The following is an excerpt from Brad’s book, The Small Business Operator’s Manual.
The Fully Operational Performing Small Business
The term Fully Operational Performing Small Business refers to a company that has been running for some time and is not a startup that’s still in search of a repeatable, sustainable business model, but rather one that has achieved product/market fit, has customers, and knows what business it’s in. That’s the “Fully Operational” part.
The “Performing Small Business” refers to a business not intending to attempt to become a gazelle or a unicorn but rather simply grows at a healthy rate and is a great business for the owner and their family.
