Reaching that time in the life of a small business when it’s time to take it to the next level is exciting, but a new mind set is required. This momentous occasion can happen in the first year of a business’ life or in its 10th year, but it has to be recognized in order to take that step. If the opportunity is not recognized and taken advantage of, the business will stagnate.
The first phase of growth can be messy; survival is the main concern. The founder is still wearing too many hats and feels that no one else can handle his responsibilities. The next stage requires another investment of both focused time and additional dollars. There is the constant worry: is the needed time and money available? Sometimes there has to be a forward step into the unknown; a certain amount of calculated risk has to be taken.
Reaching into the next growth stage is not an overnight process. A new vision has to be set, backed by an accounting, management and marketing plan. This first step into becoming more than a start-up is, in many ways, more complex than the process required to first start the business.
Organizational development is the “big term” I give to this process. The following are the steps that have to be undertaken:
- A re-definition of the target market. What changes have occurred and are there additional opportunities?
- The production process for the product/service has to be defined. What has to be done in order to increase production and maintain quality control?
- Resources are always an important factor in reaching the next level. A detailed, realistic budget forecast is necessary.
- Growth requires systems in all aspects of the business life: accounting, billing, training, advertising, personnel recruiting, product manufacturing and delivery plus other internal systems.
- Management now has to be able to control the entire system. Does the founder have the expertise to handle that job? What kind of a support team is necessary to help facilitate the growth?
This transition is the most important part in creating long term profitability and sustainability.
A business is like a tree, it has to grow in order to live, but growth has to be structured so that a solid root system is developed. Otherwise it can become top heavy and topple. Nick Petra
Nick J. Petra CFP Call me to help you with your journey into your next stage of growth. www.strategicduck.com