Growing Pains at the 4 Stages of Small Business Growth
Business consultants will tell you that every business goes through 4 stages, and every one of them has growing pains. Business leaders who know how to plan and strategize for each stage will continue to move the business forward.
Startup – A time of new beginnings
It’s exciting when dreams are turning into reality. New ideas, new people, wearing multiple hats, able to move fast, extremely agile ““ that’s what the startup phase is all about.
The Startup’s Growing Pains – When growing a startup, you’ll likely struggle to get your product and pricing right for the market. You may have a small budget, no standard processes or operations and no brand recognition.
What you can do about it – Focus on acquiring your first customers, getting your name out there and how you’re going to make money. That requires a business plan, which is your roadmap for how you’re going to get where you want to go.
Ramp-up – A time to grow
You’re taking on more clients and cash is coming in the door. You’re able to take off some of those hats you’ve been wearing and empower a small group of people to come in and take some ownership. This stage is also a time of growth quickly outpacing supply.
The Ramp-up’s Growing Pains – With demand escalating, the few systems already in place are quickly overwhelmed. Cash flow is tight as expenses have shot up to accommodate the growth.
What to do about it – Maintaining cash flow is critical. Evaluate what new systems, processes and resources you need to increase capacity rapidly. Strengthen your customer interactions so they will remain loyal while your operations stutter a bit in the interim.
Expansion – A time to diversify
The business is humming along nicely. It’s on secure financial ground. Talks are around diversifying into new markets, enhancing the current product line and developing new lines.
The Expansion’s Growing Pains – Demands on you increase with more people and more infrastructure to manage. Systems are inadequate, and without sharp planning and execution, a booming business can quickly become a cash-strapped one.
What to do about it – Hire additional help or outsource some of your responsibilities. Focus on protecting your current market share while gaining new. If it’s not your area of strength, get an outside accounting service to help you keep a tight rein on your budget.
Maturity- a time to assess
Now, you’re not so worried about cash flow and growth, but you’re sustaining a significant infrastructure. Strong brand awareness helps you get more business with less effort.
The Maturity’s Growing Pains– Issues with staffing, employee motivation and less agility engross leadership. The business needs to decide if it will adapt to stay relevant to market changes or ride it out as is. It’s a bigger machine now that will be more expensive to keep well oiled.
What to do about it – A strong HR focus on culture, diversity and career development keeps employees engaged and encourages innovative thinking. Management needs to fight complacency with regular reviews of the entire operation to make sure nothing is slipping through the cracks.
What resources do you need along the way?
Staying flexible and cost-effective so you can take your business to the next level may lead to consideration of outsourcing services. When it does, consider this: Ohio Valley Goodwill Industrial Services has been partnering with small businesses in Cincinnati, Northern Kentucky and Southeast Indiana for more than 100 years. Our outsourcing services ““ including fulfillment, kitting, assembly and packaging services ““ will help you take care of those growing pains so you can simplify processes and streamline overhead costs. Contact us today to learn more and schedule a free tour of our Cincinnati-based facilities.
