The Common Issues and Success Factors Experienced in Business Growth
In the capacity as a Business Coach, I work with a lot of different businesses in different stages of growth and experiencing different challenges. I do find that this Growth Stage Checklist is pretty accurate. While never perfect, it is an excellent tool to employ in anticipating and fixing problems that arise as a company grows and matures, from one stage to the next. Keep this checklist in mind when analyzing your business and in particular, when you develop your Strategic Plan’s SWOT Analysis. This checklist also lets you know as a business owner where your business should be. If you are on the negative side of things, then you have opportunity to fix problems. If you are sitting hunky dory and ahead of the curve, then give yourself and your team credit. But understand that can change anytime, so keep the upcoming growth challenges in mind as you plan your company’s growth. This checklist will serve as a fantastic foundation to your forecasting and strategic planning. Understanding the challenges that may be ahead is one great way to effectively put plans in place to overcome these common obstacles.
I will discuss the common issues and characteristics and success factors companies experience as they progress from one Growth Stage to the next. Understanding the challenges and threats that lay ahead can help a company tremendously when it develops its Business Plan for growth. With in this business planning process a company can use its Strategic Plan process to identify and meet these challenges and threats, commonly called a SWOT analysis. Having a checklist of what the different issues and characteristics are for each stage of company growth can be an excellent tool for a company’s planning. Do you know what lays ahead in your company’s growth?
Small Business Growth Stages
— Basic Existence Stage
– Main Issues and Characteristics
? Obtaining client?ss
? Delivering the product and service
? workable Services
? Expand from key customers to broader sales base
? Have enough Cash on Hand to cover Cash Flow demands
? proprietor performs all Management functions
? Often a lack of Planning & Systems
? Business just trying to continue viable
? Have yet to stabilize production or product quality
? Trying to gain sufficient customer acceptance
? Business has strong demand on the Owner’s time, cash and vigour
— Survival Mode Stage
– Main Issues and Characteristics
? Business demonstrates viability as business entity
? Satisfies a base of customers
? emphasis shifts from existence to managing Cash Flow
? Generate enough Cash Flow to break even, stay in business and finance growth
? Focus on Market Niche exploitation
? Simple organization and the owner begins to delegate to a manger. However, strong direction and control still rests with the Owner.
? Planning concentrates on Cash Flow Forecasting
? Systems development & implementation in early stages.
— Obtaining Success Stage
– Main Issues and Characteristics
? Exploits its Market Niche
? Obtain Strategic goals
? Expansions is important but stability, control and profitability are key as well
– Owner’s Options:
? Expand and Grow the business
? Maintain Stability as a means of support to the owner
? Owner considers disengagement from the business
? Market penetration
? Competitive Edge
? Functional Management & Owner Delegation
? Management & Key Employee Competence
? Generating sufficient Cash Flow
? Planning for rough patches
? Professional Staff: i.e. Controller, CFO, CEO
? Production/ Service, Marketing, Strategic and Financial Systems established
? Operational Budget Management
— Rapid Growth Stage
– Main Issues and Characteristics
? Committed to a Growth Strategy
? interested? with adequately backing the growth stage
? Need good ownership delegation to improve managerial effectiveness.
? Enterprise develops complexity. Performance Control Systems are important
? Established Expense and Budget Controls to maintain strong Cash Flow.
? Profitability Planning Systems are critically important
? Effective Financial Planning, Forecasting, Modeling and Strategy
? Very skilled, experienced and competent Management Structure
? Company systems are tested, altered and highly delegated, but there is strong Strategic Leadership from Top Management
? Capacity to become a big business
? Strong Potential for Business Sale Premium
? Effective Delegation and reliance on talented Managers & Key Employees are keys to success
? Founding Entrepreneur(s) can opt out of business and have a more advisory role
— Maturity Stage
– Main Issues and Characteristics
? Consolidate and Control profits
? Retain advantage of proportional small size, nimbleness and flexibility
? Quick market change response time
? Still retains the entrepreneurial spirit
? Growth causes inefficiencies so must ensure the Management Structure continues to grow and evolve. Strong Managerial Talent
? Strong Budget, Operational and Strategic Planning capability and focus
? MBO System (Management by Objectives)
? Cost Systems
? Extensive & well developed company systems and Management Structure
? Strong Financial Resources
? Convert Entrepreneurial spirit to a Formidable Market aim
? Strong Market Niches and Competitive Edge
? Exceptional Risk Management
? Profitability boosted by successful Innovation
? intensiveness in Market Branding and Recognition
? Maintain Competitive Edge by anticipating Market changes and adapting better and faster than competitors
Try the services of Marketing Consultant to help your business not just grow but really succeed. A company is only as successful as the people it surrounds itself with- get help through Turnaround Companies to assess where the business is, where it is headed and where it needs help. Frank Goley is a highly experienced business coach for ABC Business Consulting, and he is author of a business plan book. Frank also writes the business success blog, and he has written over 170 articles on business success.
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