In this week’s lesson, I am going to summarize the first two stages of business growth so you can better understand the drivers of success and how they impact your company. However, I recommend you read the timeless article, The Five Stages of Small Business Growth by Neil Churchill and Virginia Lewis, and carefully consider what stage your business is at, and most importantly, what the implications are for growth.
During the First Stage, referred to as Existence or known as the Startup Phase, it is common that the owner/founder does it all. If there are no other members of the team, then it is critical that the founder be able to manage every function of the business from sales to operations and product development. Cash is tight at this stage and there’s a tight alignment of business and personal goals. The key challenges the business faces include:
• Identifying and obtaining customers
• Delivering your product or service
• Ensuring cash flow
• Determining if you can even expand from this initial launch stage
Managing a team, doing heavy strategic planning or implementing sophisticated systems are usually not critical, as you are in true launch mode.
The Second Stage is referred to as Survival. In many ways this stage isn’t that much different than the first stage since you are still heavily reliant upon the owner and perhaps now a small team to do all of the work. There continues to be a delicate balance between revenues and expenses with cash flow challenges impacting your growth. The owner and the business are still tightly integrated and you likely don’t have too many sophisticated systems in place to manage the business. This begins to change at the next stage.
The skills required to lead through each of the different stages of business are really quite different. At every stage, being able to recognize opportunities (getting “lucky breaks”) is critical, and what you might consider to be a lucky opportunity at one stage will seem different in another, since the ability to seize the opportunity will vary at each of these stages. That’s why it’s critical to recognize the different strengths and capabilities needed such as:
• Developing a superior product/service offering
• Selling the product
• Juggling and controlling multiple tasks
Weekly Lesson Five (Try this…)
If you’re in the early stages of growth, you need to make important decisions about the future of your company and your skills, interest and expertise. Consider the challenges below and if you are facing one of these, write down one action that you can take in the next two weeks to improve your situation.
As the owner, I struggle to delegate activities and responsibilities.
Action to Improve Situation:
Our business is constantly struggling with cash flow challenges.
Action to Improve Situation:
My business and personal goals are intertwined.
Action to Improve Situation:
Published by Beth Goldstein, Edge Institute
While I am currently pursuing my doctorate in education at Johns Hopkins University (part-time), I remain passionate about helping small business owners and entrepreneurs accelerate growth. I founded my consulting firm, Marketing Edge Consulting Group, in 1999 and established the company's training division, Edge Institute, in 2013 with a focus on helping small business owners, executives, students and entrepreneurs better understand how their key stakeholders think, what they value and what influences their purchasing decisions. I then show them how to apply this knowledge to create targeted business growth programs that drive revenue growth while increasing profitability and customer loyalty.
I teach entrepreneurship and marketing courses at Babson College. Previously I taught marketing courses at the Heller School for Social Policy & Management at Brandeis University. I also spent 13+ years at the Boston University Questrom School of Business where I taught entrepreneurial sales & marketing courses, ran their New Venture Competition for ten years and served as the Faculty Director for the university’s top ranked Online Graduate Certificate in Entrepreneurship Program from 2005 to 2014.
I have conducted business growth workshops throughout the US for organizations ranging from publicly funded groups like the MA Supplier Diversity Office to Fortune 500 companies like Fidelity Investments and Carrier Corporation. I served as the Lead Instructor for Interise’s nationwide training program, run in conjunction with the US SBA: Small Business Association's Emerging Leaders (e200) Initiative, providing training to hundreds of business owners throughout the U.S. I was also the Managing Director for the BU Urban Business Accelerator Program, an educational program that brought students to economically disadvantaged neighborhoods in Boston with the goal of improving financial capacity & business.
For Babson Global, I was on a 3-person MBA design team that created an innovative MBA program for the Mohammad Bin Salman College of Business and Entrepreneurship, Saudi Arabia. I also led the design teams for the Masters in Entrepreneurial Leadership and the 4-year undergraduate marketing degree.
I specialize in custom-designing classroom and online business growth training programs ranging from 1/2 day workshops to intensive 9-month programs for a companies as well as government agencies and organizations. I have taught in the U.S. and abroad including: China, Egypt, Indonesia, Kuwait, Lebanon, Mexico, Nigeria, Oman, Saudi Arabia, Thailand and the United Kingdom.
I have more than 30 years of direct industry experience and hold an MBA from Boston University and a BA in Economics and Sociology from Brandeis University. I am currently pursuing my doctorate in education at Johns Hopkins University School of Education.
View all posts by Beth Goldstein, Edge Institute