Overcoming Stagnation: Strategies for Business Growth

Business growth experts typically identify three main stages. The Startup Phase is when you establish your business, find customers, make sales, and essentially, try to generate revenue. At this point, you're usually an Owner/Operator.

The subsequent stage is Early Stage Expansion, where your business experiences "growing pains". The final stage sees your business transition from Owner Operated to Management, where your role shifts to that of a manager, no longer involved in the day-to-day operations or production.

However, only a minority of small businesses reach this third phase. Therefore, this article will focus on managing growth as you transition from Startup to Stage Two.

Signs It's Time to Manage Growth

You might need to start managing growth if:

• You have a steady income and regular sales, but you're working too hard. If you continue at this pace, you risk burnout, decreased productivity, or even illness. It's time to find a way to grow while working less.

• You're experiencing cash flow problems. These are often caused by the need to invest in inventory or product development, or to cover payroll. If cash is flowing out faster than it's coming in, you need to generate an influx of cash while continuing to develop your products or services.

Strategies for Efficient Growth Management

If it's time to grow your business, consider the following strategies:

a. Existing Customers and Existing Products

Find ways to sell more products to your existing customers or raise your prices. If you've been charging the same price for a year or more, it's reasonable to notify them of an increase. You might also increase cash flow by announcing a sale or offering a discount for upfront payment for a year's worth of services.

b. Existing Customers, New Products

Keep your existing products, but look for new customers. Ask your existing customers for referrals, run a contest, or publish a newsletter. Look for opportunities to reach new customers through joint ventures or other strategies. For example, if you're selling web development services, you could partner with a company selling ecommerce software and promote each other's services to your existing customer list.

c. New Products, Existing Customers

Develop new products and sell them to your existing customers. This is often referred to as developing "back end" products, a strategy used by many successful entrepreneurs. For example, if you're selling gardening supplies, you might notify your existing customers that you've added vegetable cookbooks or garden ornaments to your inventory.

d. New Products, New Customers

Develop new products and look for new customers. Essentially, this means starting a new business, and like all businesses, you'll need to do your homework and market research.

By implementing these strategies, you can stop spinning your tires and start driving your business forward.