In order to achieve success in any small business you must pass through several stages along the way. You cannot skip a step. Frequently business get stuck for just that reason. The entrepreneur isn’t aware of these stages therefore he/she is focused on the wrong objectives for their stage of growth. Focus on the right things and success becomes much easier!
In a previous post title, The Search for Growth Continues I introduced the 5 stages of small business growth and significant factors critical for a business’ growth.
4 factors in each category that impact a small business’ growth:
- Owner Goals
- Operational Skills
- Managerial Abilities
- Strategic Thinking
Management Growth Factors:
- Financial Assets
- Personnel Resources
- Business Assets
The first step is getting from the Foundation stage to the Survival stage. Here are the requirements on which you must focus under each of the previous categories if you wish to successfully achieve the “survival” stage of growth in your business:
- Profitability: it is critical that the owner set a profit goal for the company to plan from and strive to achieve.
- Owner still controls ops or sales and may have 1 key manager in the other function.
- The owner must begin to delegate, however strong direction and control still exist with the owner.
- Trial and error as a management style still continues.
- Owners financial abilities must evolve and begin concentrating on cash flow forecasting.
Management Growth Factors
- “Big Dogs” may emerge—loyal high-producers who build the business exponentially in this time of rapid first-stage growth
- Simple organization structure typically exists
- Systems are minimal with evolution & implementation in early stages.
- System focus at this stage indicates high probability for success in future stages of growth.
- Begin to establish a market
- Assets may begin to increase if owner is “asset-aware”
- Right business model could make business salable
- Formal planning is cash forecasting
- Cash begins taking the pressure off from the existence stage
- Credit is still difficult to come by alternative lending sources are required.
Capital sources include:
- owner, friends, family
- government grants
While there are other objectives which entrepreneurs focus, these factors are non-negotiable. If you don’t address these key factors your business will stagnate and can get stuck here for years and sometime even decades.
Do you recognize anything in this list that you may have forgotten? If you corrected it how long do you think it would take to achieve stability of the survival stage? For those of you that have gotten past this point in your business, was there something that held you up for a time? What was it and how did you get past it?
In the coming weeks you will see more posts in this series as we detail more of what is required to get past your current stage of growth and achieve the higher more profitable stages of your small business growth. If you cannot wait, I suggest you download copy of the Small Business Growth Matrix from our website. You’ll find all 5 stage defined within this document.