Whether you are launching a startup, running a small or medium-sized business for years or have a well established Fortune 500 company, growth is almost always at the forefront of your mind as a business owner, leader or CEO. How do you launch your new product successfully? How do you keep customers engaged over the long-term? How do you remain relevant and retain your best customers as a veteran service provider?
Turning your business concept into a business, and then growing that business from a small one into a medium-sized business or a big business is not easy. Most businesses start small and stay there. But staying small does not mean that they survive or can even compete effectively in the marketplace. Sometimes in order to survive you have to make the transition from start-up small business to a medium-sized business, and then to fully-thriving big business.
Making Things Happen ⚡️
Making things happen requires effort and doing. Yes, you’ve got to dream up ideas and you need to able to communicate these ideas effectively, but that’s not enough. If you don’t move from your ideas to action, they remain simply thoughts and conversation alone. You got to get to it and make it happen. Growing your idea into a viable concept that becomes a business, which you can run successfully for the long term, takes serious commitment and earnest endeavor.
There’s a lot of tools today available to help you map out your progress for your business from idea to launch, survival, scaling up and maturity. In May 1983, Harvard Business Review published The Five Stages of Small Business Growth, which serves as a useful general purpose framework. This framework was pre-Internet, pre-Facebook and pre-iPhone. Thus it is not able to take into account rapid technology growth and how entrepreneurs need to seize opportunities quickly.
Here we take a look at growth in terms of a 5-stage process. The process also does not end at the fifth stage, but allows for a level of stability to keep growing and expanding. Below is our quick roadmap to begin.
Stage 1: Idea
Stage 2: Experiment
Stage 3: Process
Stage 4: Scale
Stage 5: Mature
Stage 1: Idea
You’ve got an idea for a new business, product or service. In this stage, you discuss the idea with people you trust and do some research on your idea’s viability. Does your concept already exist? What is different and original about your approach or concept?
In this idea stage, you can do research online to see what similar product, service or business offerings exist, size of market and potential customers. You also can sketch out your idea. Learn more about our Design Thinking Approach.
Sketch out the main parts of your business model. The book Business Model Canvas by Alex Osterwalder, Yves Pignault, Alan Smith, Patrick Van Der Pijl and Tim Clark can be very helpful in mapping out a basic blueprint of what you are offering (Value Propositions) for whom (Customer Relationships, Customer Segments), doing what (Key Activities) using what (Key Resources), with whom (Key Partners) through what methods (Channels) at what cost (Cost Structure) to generate income (Revenue Streams).
Download PDF version of the Business Model Canvas.
Think about the kind of business structure that your business idea will need. Also start planning how you will fund your new venture. Marketing is an integral part of launching any business successfully. Start thinking about how you are going to market (online media, email lists, earned media, video, tv etc.), to whom specifically and what you are going to say and do.
While the idea generation phase can be a fabulous starting point, it is important that you move to the next stage of experimenting as soon as you can so you can test out your idea and how it works.
Stage 2: Experiment
Start your idea. Test it out. If it is a product, create a prototype. If it is a service, try testing out delivery. Experiment with one or all aspects of creating, marketing, sales and delivery of your product or service.
Stanford professor and entrepreneur Steve Blank has defined a startup as “a temporary organization designed to search for a repeatable and scalable business model.” Constantly experiment to discover your sustainable model.
This stage does not have pre-written rules that you can follow to the tee. There many be some general guidelines you can follow from entrepreneurs and companies who successfully created, launched, marketed and sold similar products or services. It’s up to you to figure out what works best for you and your venture.
Some things will work, some things will not. Keep going. Everything you do teaches you something and gives you more information to help you make better decisions for your next steps and direction.
In this stage, you can put up a website for your product or service offering. If you have an established business and are adding a new product or service, you can still treat your concept as a ‘viable business entity’ in its own right. This clear thinking can help you ensure that what you build out is actually sustainable, viable and profitable for you.
Begin marketing in a bigger way, sharing with online communities, via social media, email newsletters, in apps and other channels. Start sharing your concept, prototype, test product or test service. Pay attention to how people respond. Take notes.
After you have a viable product or service and have done enough testing and put in relevant feedback, it's time to start selling your product or service. Test out different pricing strategies and offerings. You will also learn a lot more about your customers and what unique value you are offering. This in turn, helps you fine tune your offering.
Determine what you consider your KPI (key performance indicators) and how you will measure a baseline for comparison and measurement. How do your experiments match up against these metrics?
Also get in touch with people who you think can provide you with specific insight you will need for your business, acting as advisors.
Along with developing a sustainable executable business model, building up intensive growth is key on your priority list and at the forefront of your mind. This can involve:
1) Market Penetration:
Sell more of your product or service to your existing customer.
2) Market Development:
Sell more of your product or service to adjacent market (nearby location).
3) Alternative Channels:
Reach more customers via a new platform or method.
For many businesses, this stage of ‘experimentation’ till finding a successful business model can take several years. In fact, some startups it can take as long as 10-15 years or more to get to the next stage of consistent process.
Stage 3: Process
You’ve been experimenting awhile and know what works and what does not. You have got a product or service you have been able to sell for a while now to a consistent base of customers. While in the Experiment stage, you aimed to try as many different things as possible to learn at a broad level and figure out the best solution, the Process stage is about moving into consistency, uniformity and predictability that you can count on.
In this stage, you start to put in place regular and repeatable processes for your business. You invest in technology and tools that help you stabilize your business and provide predictability.
You can start plans for scaling up with processes, automation and delegation. You also look for more cash funding to support your growth that includes equipment, employees, technology and tools.
Two key steps in this stage include delegation and cash flow. As the owner, can you delegate responsibility to others? Do you have the right team for support? What checks and balances do you have in place for accountability and performance?
In terms of cash flow, your primary concern will be bringing in enough cash to satisfy the great demands that growth brings while managing expenses and preventing poor financial decision-making.
If you are able to rise to the challenges that a growing company presents from a financial and managerial perspective, you can take your business idea from a small to a medium or big business.
You also start creating a consistent marketing process that includes tracking where your best leads and engagement come from and also regularly test out and improve your marketing methods and channels (website, email, other) through your user experience feedback. Look for areas and aspects of your business that you can automate or plan out months ahead such as your regular marketing (email drip campaigns). You also can automate your bookkeeping and many payments for regular predictable expenses so you don’t have to think about them every month.
You also start planning for emergencies and the unexpected. You begin planning for the future based on what you learned during the Experiment stage about your business model so that you can make future projections about cash flow, customers and expenses.
Stage 4: Scale
You’ve got processes in place. It works. You know who your customers are, what you are selling to them and for how much and through what method. You’ve got a process for delivery and a team you can count on. You’ve got a lot of automated processes in place. You know your revenue last month as compared to the three months’ prior. You’ve got consistent cash flow. You’re ready to scale.
The Scale stage is about Growth. It’s time to grow. You’ve got processes that work well. You have identified opportunities that can help take you further and grow bigger.
In this stage, your goal is to grow. You are willing to invest in both technology and people. Technology includes any equipment or tools that help you run your business better, whether it is expanding customer acquisition, marketing, production capabilities or to new geographic areas.
It is important to remember that while you can do everything, you don’t and should not do so. Instead this stage is about delegating and investing. Hire more staff, create strategic partnerships and expand your hours of operation. See if you can open an office in another location. Can you take your business global?
Create a marketing plan that helps you grow. Think it through first and test in increments. Invest in more advertising and marketing when you are ready. Aim to reach previously unserved customer segments with your existing products. Increase your production by investing in more equipment, tools and resources. Find new distribution channels. Consider expanding your offering to reach international audiences in different languages and settings. Consider partnering with other companies to reach bigger customer segments or provide a full-service offering.
Stage 5: Mature
In this stage, the business venture runs consistently in a predictable way that you want. A mature business model is repeatable. Revenues exceed expenses considerably and offer good profits. You can keep your business in this stage for a long time. Typically you move out of this stage when you want to sell the business or scale the venture into a bigger enterprise. Also despite the success you have, you will always want to iterate and improve, while keeping watch over market conditions and changes.
Some steps for integrative growth here include:
Buy a competing business or businesses.
Buy a supplier to have more control of the supply chain process.
Buy a component provider to have more control of the distribution chain.
A mature business cannot stagnate. If it does, it will lose momentum and profitability, and eventually die. Introducing new products or services in a mature business help keep it fresh. Approaching a new business product or service offering as a business model concept helps you stay on track too, avoid unnecessary expenses and ensure that it is viable and an actual improvement or support to your existing business.
As you can see, this is an iterative process and even with a mature business, you will want to keep a fresh perspective and willingness to try new things, stay lean and always be in touch with your customers and audience.
Growth strategies must always be fresh and relevant. If it takes you a year to develop your growth strategy, but your market has changed considerably in that time, your strategy becomes outdated quickly. It is more effective to have a working blueprint and to approach growth in a few big pieces that you can address one at a time.