THE GROWTH STAGE

Super congratulations for getting to this stage! At this stage, your marketing efforts have prevailed and you have market penetration. You have enough clients for your revenue to be higher than your costs, you are running a profitable business. 

Your challenge now is to figure out how to deal with increasing sales? In your mind, you are still thinking like a small business person or entrepreneur, but you will have to start looking at your business like well, a business. To focus your thoughts, look at three major areas that medium to big businesses look at – people, process, technology. Let’s go through them.

People – You may need to hire more people to maintain your service levels. Because with increasing sales, if your workforce stays the same, then your clients may suffer from longer waiting time, and that would in turn hurt your business. You may need to hire someone to answer the phone calls, or to meet clients. Up to this stage, you have been handling all inquiries, meetings, administration, maybe even fulfilment. 

Your business would benefit from hiring managers for key areas such as sales and operations, and production if applicable. The managers need to focus on providing a smooth service and ensure that the business level maintains at the current condition. This brings me to the next point, process.

Process – If you have physical products, you may have to look at the supply chain to increase the production volume to keep up with demands. If you don’t own the production process, you will need to source for more suppliers. This would also apply to fulfilment of orders or delivery. If you are offering a service, you may want to implement a marketing automation that handles inquiries or schedules appointments.

Technology – You should have a basic software application or a system that handles the inventory, orders and invoicing for your sales. This system would also be able to generate sales reports for you every week, month, quarter or year so that you can monitor your sales performance. With the increase in the workforce, this system can also be upgraded to include payroll.

Reinvesting some of your profits at this stage is a natural move to make at this growth stage. You can keep running your business this way for as long as there are no policy or environmental changes, no increase in competition, and management stays effective. But normally, when you reach this stage, you need to start being more aware of competition in the marketplace. Inversely, your competitors will also start to notice you.

You will also be more aware of your cash flow and consider if you’d like to move to the next stage – expansion. You may even consider getting investors in for capital investment to go to the next stage. This is when you would need to prepare a business plan. A good business plan states clearly what the business is about and how it’s going to make money, but a great business plan shares the vision of the business owner. Most investors have said that they invest in people, their vision and their attitude as opposed to just relying on the business model and sales projections.