THE EXPANSION STAGE

During the last stage, the growth stage, you already have a solid product or service. You have a list of happy customers, your market penetration is good. Your managers are efficient. Your processes are in place and your systems are serving you well. You are running a well-oiled engine because you reinvested your profits or maybe took credit facilities to build the people, process and technology.

What’s next? Do you keep gong with ‘business as usual’ or do you consider growing your business? This is the perfect time to revisit your personal and professional visions and decide what to do. Most business owners at this stage will choose to grow their business as they are driven and motivated to achieve their next success.

How do you do this? This time, you need to look at the business from a strategic perspective, not just operationally. People, process and technology are still important but now you will have to hone in on your business acumen. 

When it comes to people, the key managers you hired during the growth stage to maintain the business now need to look at growing the business. You need to share your vision and direction of the company and get the team to be on board with your vision. Your managers need to be aligned to your vision. They need to be more competitive and more capable, ready to handle bigger responsibilities and higher pressure. Delegation is important. You need to start heading the company and let your managers handle the operations. You will feel it is really tough to let go of the day-to-day responsibilities to your managers because you had built the business from the seed stage, but if you don’t let it go, you won’t be able to look at the business strategically and how you can grow it further. Discuss with your managers on how the current processes and technology should be improved or upgraded in order to grow the business. Your managers will feel empowered and will have a stronger alignment with your vision. Your existing processes will need some refinement and your systems need to be upgraded such as having more users, more features and more bandwidth.

When you delegate to your managers, you will be able to start acting like the head of the company and look at things strategically. You can grow your business more by deeper market penetration, market development, product development, or diversification. Let’s look into them one by one.

Market penetration – You are trying to get your existing customers to buy more of your existing product..

Market expansion – This is when you are trying to reach new customers with the existing product.

Product expansion – This is when you come up with new products for the existing customers.

Diversification – This is when you go into a new market with a new product or service.

You can understand it easily by looking at Ansoff’s Matrix. This matrix is a useful tool to evaluate your options and calculate the risks involved in each option.