4 Growth Stages for Business-Building
4 Growth Stages for Business-Building
“Anticipate growth instead of reacting to it.”
- Katie Murphy, Entrepreneur Leadership Network Contributor
Many entrepreneurs find it hard to categorize the problems and growth patterns of small business in a systematic way. Small businesses vary widely in size and capacity for growth. They are characterized by independence of action, differing organizational structures, and varied management styles.
That’s why some entrepreneurs find themselves reacting to the growth of their business. And mostly they don’t know where to start when they’ve reached that point. And they’re not aware that these can be organized into a framework that increases our understanding of the nature. re, characteristics, and problems of businesses. That’s why it is important for us to anticipate growth instead of reacting to it. Grow your business with intention through business-building frameworks to avoid that unwanted future.
First let us define what business-building is. Business building is a process of designing a sustainable operating model at each stage of growth, anticipating required upgrades to systems, processes and technology before the growth occurs.
Such an understanding can aid in assessing current challenges; for example, the need to upgrade an existing computer system or to hire and train second-level managers to maintain planned growth.
Here are 4 growth stages for business-building to look out for:
At startup, surround yourself with people that address your gaps. If you are considering full-time hires, they need to maximize your reach. Fractional executives are a great way to achieve this without the risks that come with full-time hires. Lastly, outsource as much of your operating needs as possible until you surpass 15 employees: finance, HR, IT and legal.
2. Hiring your first business manager
When you’re ready to hire your first business manager, probably once you have 5-15 employees, don’t overcomplicate the role. Stick to the day-to-day operational needs that you can delegate and leave strategy out of the job description. Create a toolkit to lower your risk of turnover: job description, candidate profile, work assignment and interview questions. Lastly, start off with intention by creating a 90-day onboarding plan.
3. Surpassing 15 employees
Surpassing 15 employees requires a huge payoff in organizational debt. Now is when you need to consider bringing those outsourced operations in-house. This requires hiring, and that’s where you could poison your culture if you’re not careful. Create a blueprint for yourself to follow, in partnership with that new business manager.
4. Scaling your workforce 30% or more
Scaling your workforce 30% or more requires a complete upgrade of that blueprint you created during the last growth stage. Essentially, you need more infrastructure to sustain your growth. Strategy becomes critical, and you can even create roadmaps for things like the design of your organization, product development and the technology you need to put in place while you grow. These roadmaps should drive your business goals.
A completely different operating system is required for each one of these growth stages. You can grow your business with intention by upgrading your operating system in anticipation of each stage. Why is a different operating system required at each stage? Because your top focus changes at each: your business goals.
✓ At startup, your focus is product development, funding and sales.
✓ At the time you’re ready to hire your first business manager.
✓ By 15 employees, you’re choosing between a lifestyle business or making a larger impact.
✓ And lastly, at scale, it’s all about investment and your revenue return on that investment.
A company’s development stage determines the factors that must be dealt with. Knowing its development stage and future plans enables managers, consultants, and investors to make more informed choices and to prepare themselves and their companies for later challenges. So by considering these growth stages, you will anticipate your growth in business, and you will be able to be a head above the rest.
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