In the last four blog posts, we’ve taken a deep dive into the stages of small business growth. You can begin reading this series here. Small businesses have five main stages of growth. The first one, the existence stage, revolves around the creation or the birth of the business. The second stage focuses on survival. During this stage, little to no profits are made, the business focuses more on staying alive and not counting too many losses when it comes to its resources. The third stage involves profit for the first time and the decision to expand or maintain the status quo. But, the fourth stage, called the Take Off stage is all about developing the business even further.
What is the Take Off Stage?
Your business has grown considerably, has achieved a sustainable amount of financial resources and attracted key managerial talent. Your primary concerns at this stage are not only to accelerate growth, but also to learn how to generate enough revenue to support that growth.
Is your business ready to take off? There are certain factors that can determine the answer to this question, most of which are discussed below. However, the key factor is your ability to manage both the people side of growth as well as the financial aspect of it. In some cases, you may be replaced by your board as a seasoned expert takes over to grow the business further.
Your staff work with your customers every single day and are the perfect candidates for giving input to the growth of your business. Without their input, you may deploy the wrong strategy or launch a product or service that your customers don’t want. Depending on how many resources have been used, the consequences could send your business back a few stages. It’s not only important to employ the right staff, but listening to their feedback is a crucial factor for the development of the business.
Business becomes more complex in the Take Off stage. While you have competent staff, your systems are beginning to become strained by your growth so you bring on a Chief Technology Officer or systems project manager to refine them.
Maintaining the cash flow is important. However, what is more, important is using the cash in a way that moves the business forward. You’ll need to have a higher debt to equity ratio, and your tolerance for that is what drives forward progress or stalls it.
As you make decisions, you’ll consult with experts and put the right strategies in place with a cash flow plan to support them. Throwing all cash resources into one all in strategy could potentially harm the business more than help it grow, so you’ll manage your new product lines and services accordingly.
Keeping a positive attitude is another important factor in helping the business grow. It’s important to remember that everybody makes mistakes and that managers don’t have a way of seeing the future to determine which strategies will work and which won’t. Accepting others’ mistakes is something every owner should do to help create a great working environment where everybody can thrive.
To help your business grow and develop from the third stage to the fourth one, you need to make sure that:
- You have experienced staff that you trust and who can come up with great strategies for your business to grow based on what your customers want;
- You know how to use the cash resources coming in and not using them on one single strategy that promises to boost your business further; and
- You know and accept that everybody makes mistakes, but at the same time, you expect the very best from the staff.
The Take Off stage often involves more self-discovery. How much risk are you willing to take? Are you the right leader? Can you handle higher levels of debt? With confidence and continuous learning, you’ll be ready when your company is. I’m here to help. Contact me today.