"Slow and steady wins the race." How many times have you heard that? However, if you're eager to grow your business, the thought of taking it slow and steady may not appeal to you. By moving strategically—and smartly—through the growth process, you minimize the risk of failure. Being an overnight success sounds exciting, but it can easily lead to a complete crash and burn.
There are six stages to growing a business. Successful entrepreneurs first determine their business goals, then move through each of the following stages in order, without skipping ahead, to get to that destination.
The initial stage of a new business is an exciting time. This is when you start flushing out your idea, maybe sell to a handful of customers and do some initial marketing. Business is usually running part time in this phase, as you're not quite ready, either monetarily or mentally, to make the leap.
When your business becomes your full-time occupation, you are in the walking phase. You have a number of paying customers and are working to make the business self-sufficient. Some business owners like this phase because it offers them an ideal work-life balance. They don't strive to run … they're happy walking.
But if you want to move to the next step, you'll need to consider hiring employees and possibly getting a loan from a bank or another financial institution to grow your company. Don’t make those decisions lightly. If you don’t hire an employee today, that’s not to say you can’t do it six months down the road. Better to stay the course than run before you're ready.
If you’ve made it to this stage, your business is really starting to take off. Be aware that it may start to feel like the proverbial snowball rolling down a hill, as the opportunities to continue growing pop up at a more rapid pace. Some of the decisions (forks-in-the-road) you may face include whether to open a second location, hire more employees, make a sizable investment in capital equipment, or launch a new product or service. If you've done your homework, you can decide how to proceed with confidence. Growth can be stressful and put a strain on your cash flow and your ability to deliver products and services, so consider the impact before heading into the next stage.
As you run faster and faster (and face more growth opportunities), you'll soon find yourself driving your business. With likely 50 to 99 employees, including some senior managers like a CMO, CTO or CFO, you're on the verge of no longer being a “small” business.”
Now is the time to exercise extreme caution. A poor decision at this point will cause much more serious damage than one you might have made back when you were walking. In order to keep growing, you will likely need to invest a significant amount of time, energy, money and other resources, as well as decide whether to do things such as add locations, increase staff, buy a competitor or start a second company that complements your existing business.
Congratulations! Your business has really taken off. Your investments and decisions are generating more than $50 million in revenue, you have dozens of locations and you are adding staff regularly. The stakes are much higher now so don’t lose sight of the core principle of making decisions based on concrete data and a clear understanding of the risks involved. Examples of the forks you might face include deciding whether to go international, whether to take your company public, and whether to pursue merger and acquisition opportunities.
Your small business is now a midsize company. Take a moment to congratulate yourself on getting to this stage, and then reflect on how you got here. Chances are you have made very smart decisions along the way. It will take that same strategic mindset to sustain your success for the long term.
Take some time to determine what stage your business is in. Then decide whether you are ready—or interested—in taking your business to the next level.
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