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Going for Growth

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Six stages of business growth, and overcoming the challenges they pose.

Successful Business Growth

Bernie Emery from Business Link gave a presentation identifying the different stages of business growth, the problems usually associated with each stage and ways of overcoming them. This was followed by a lively and wide-ranging discussion touching on a number of strategies available to growing new media businesses.

Bernie classified business growth into six main stages:

Stage 1: Conception / Existence

At this stage, it is generally the owner who makes all the decisions, such as the initial marketing, pricing and pitching and also covering many of the production responsibilities. Often, the business has only a very few clients and developing a customer base is a major challenge. At such an early stage, the business will probably still be refining its product or service, a process which can be an important obstacle to development. Two of the problems usually encountered at the Conception Stage are generating enough money to operate and the lack of administrative systems.

Stage 2: Survival

In Stage 2, the business is still owner driven, although some simple administrative systems will be in place. While there may be cash to operate from day-to-day, businesses at this stage often struggle to find the necessary funds for updating and renewing resources, such as equipment, and some simple financial planning is now required.

Stage 3: Profitability and Stabilisation

By this stage, cashflows are now okay and basic systems are in place to support marketing, finance and operations. The business is now at a size when functional managers are required (possibly providing opportunities for career development with existing staff) and it is no longer feasible for the owner to make all of the decisions: the owner and managers must discuss business strategy together.

Stage 4: Profitability and Growth

As the business starts to experience more pronounced growth, there will be new costs to account for. Ensuring that the business remains profitable as it increases its staff costs is the real challenge at this stage, especially if a move to bigger, more expensive premises is required. Although strategic planning is shared between the owner and managers, it may be necessary to delegate operational planning completely.

Stage 5: Take-Off

At Stage 5, a business is undergoing rapid growth. Financing this and controlling increasing costs provides a severe challenge for many businesses. A crucial issue here is that of ‘Sanity vs Vanity’ – you must be able to delegate, to give up responsibilities that you once might have regarded as key, and distribute them among managers. It is simply no longer the case that you can do it all yourself and keep a close personal rein on all aspects of your business. If you are, you will probably be constricting business growth and damaging your mental well-being!

Stage 6: Maturity

Rapid growth should now be consolidated, and hopefully a high but stable level of profitability will have been achieved. It is at this stage that the owner and business often separate altogether. Within the business, internal career routes will have developed and there will be a de-centralised management structure with both strategic and operational capability.

Conclusions

There are certain key skills which are required if growth is to be possible at each stage of this model:

• A clear vision about where and what you want the business to be
• The ability to communicate this vision and provide leadership to your colleagues
• Infectious enthusiasm: the ability to make your colleagues excited about the work and to construct an enjoyable and fun creative environment
• Delegation: being prepared to give-up control when it is in the best interests of your business
• The social skills to build networks both inside and outside the business