You’ve made it to the Growth Stage…Now What?

Take an A! You’ve made it through the exciting but terrifying startup phase of your business. You now know your target audience in a clearer and more personal way, you’ve smoothed out your operation and you’ve hired some talented employees. Phew!

But one key element of success is how your company will handle growth.

A small company inevitably has to go through certain stages until it becomes a big company.  The lifespan of your company will depend on your ability to recognize, solve and overcome the problems and obstacles you will face as you expand. There are three distinct challenges of the growth phase for which you’ll want to prepare:

1. Resources – In particular, financial, technological and human resources all become critical at this stage.  While sales focus is still all-consuming, you need to begin to think about how to invest in people and technology, without “over” spending.  What’s the right balance? That’s part of the art of entrepreneurship. While you’ll have the best idea of what your business needs most, don’t be afraid to ask for help. Industry white papers, conferences and other professionals are all great places to get quality information.

2. Competition – Competition can either spur you to greatness, or it can undermine you. During the growth stage, you’ll want to make sure you have a healthy understanding of your competitors. While overly focusing on your competition can be detrimental; understanding how you’re different is crucial. One thing you’ll want to be able to say to potential customers with absolute clarity is the following sentence: Unlike other companies in the industry; we (fill in the blank). If you aren’t able to fill in the blank with something meaningful to your customer base, you won’t likely survive this stage. PS: One way to find out more about your competition is to monitor your attrition to see if other companies may be poaching your customers.

3. Management – Up until now, you and one or two other key individuals have been managing the workload…but this becomes unsustainable during the growth phase. An ever increasing workload including acquiring customers, solving problems, installing systems, controlling results, and billing requires more people if growth is to continue.  However, with the addition of more people comes the need to manage them effectively. This is where lots of small companies have trouble. Management must give up autonomy and share tasks, functions and authority so that departments can emerge and develop their own dynamics. This may be one of the most difficult aspects of the growth phase for many entrepreneurs.

The good news is that these obstacles, while steep, are certainly not insurmountable. The phrase “growing pains” is apt for a reason. While there may be short term pain, there will be long term pleasure when your company begins to be self-sustaining. Stay focused on adapting in these three areas and you’ll set yourself up for success!