Category Archives: Growth

Four Stages of Business Owner Growth

If your goal as the founder of a small company is to eventually move from an integral day-to-day worker to the leader and owner, then you will need to grow as a business owner through four stages with your company. The stages are start-up, build-out, run-it, and own-it.

Stage 1: Start-Up

Many owners take a skill, such as a cooking, and start a food truck or restaurant in hope that mastery of a technical skill will translate into a successful business. However, in order to create sustainable long-term growth, the business owner should define the companies business model (value proposition and revenue model), vision for the company, and conduct an analysis of the competitive landscape.

Stage 2: Build-Out

At this stage, you will take the results of the the work from the first stage and align your processes, procedures, and marketing with your business model, vision, and competitive differentiation. Your focus is on processes (systems) and the goal is to build the foundation for a cohesive culture, message, and valuable customer experience.

Stage 3: Run-It

At this stage you will need to start managing others by focusing on the execution of the processes. Your job is to manage and train employees on the ways of your company. You will implement measurements (KPIs) to measure the effectiveness of processes and the financial well-being of the company. These measurements will become the basis for future innovation, growth, and company health. As well, you will need to remain aware of your companies strengths, weaknesses, opportunities, and threats, so you can begin to make top-level decisions about the companies direction.

Stage 4: Own-It

This is the final stage. At this point, I would argue the transition is more about belief and desire. If you have never been the “owner,” then you are developing a new set of skills that will allow you to entrust the daily operations to people you hire to run the company. Your job will require reliance on others. You will need to develop your ability to lead, relate and communicate, and take a big-picture approach.

Unless you are the rare person who already has these stages mastered, you are going to have to put substantial work into yourself and break the dogmas that may be holding your business back. Invest in yourself at each of the four stages of business owner growth and your company will transform into what you always dreamed it could be.

Why Your Small Business Growth Strategy Won’t Work

I was reading an article on Inc.’s website discussing how small businesses can become big businesses. I take issue with the article, because it advised small businesses to focus on their growth strategy. This misses the mark. If you want to build a big business, then you must innovate a business model before pursuing a growth strategy.

The advice from the article can be summed-up as follows: develop a growth strategy and make sure your risk-reward is favorable. Your business growth strategy will be based on one of the following five options:

  1. Market Penetration: Sell more of what you already provide/produce (ex. baking soda for baking and deodorizing)
  2. Market Development: Sell more to an adjacent market (ex. expand to a new location)
  3. Alternative Channels: Sell your product in a new way (ex. online versus in store)
  4. Product Development: Develop new products for existing customers
  5. New Product for New Customer: Diversify by developing products for new customers (ex. Polaris makes an atv as well as a snowmobile)

So, here is the problem. A small business owner, who wants a big business cannot start the process of creating sustainable growth and expand their company by selling, developing, or diversifying their products. Before any of these growth strategies are in place the business must develop a business model.

The business model will need to include at the very least an appropriately defined value proposition and revenue model. As well, there must be some sort of customer lock-in or barriers to entry. Otherwise, the growth from the above strategies may be very short-lived as competitors quickly mimic and take your customers.

This blog post on small business growth strategy is based on the article How to Develop a Business Growth Strategy by Darren Dahl and his review of Keith McFarland’s book The Breakthrough Company on Inc.com.