In the life of
a small business, the most challenging periods are often the transitional
phases when the company is growing from one stage to another.
entrepreneurs simply allow their businesses to “evolve,” but more successful
business owners strategically guide their businesses through the stages of
corporate growth so they can expand smartly and efficiently.
Rossin colleague Mike
Moore, director of
business advisory services, specializes in helping businesses streamline their
operations by managing their people, processes, technology and infrastructure
as they grow.
There are four
basic stages of corporate growth, each with its own characteristics and
challenges. To help you understand the different stages, here’s a useful chart
that Mike shared with me:
Stage 1: $500,000 to $5 million in annual revenue
and procedures evolve on their own
Stage 2: $5 million to $25 million
need to be standardized and streamlined
organizational realignment may be required
reporting improves access to information
Stage 3: $25 million to $100 million
and customers force change in the organization
continues to realign; need for better internal talent
Stage 4: $100 million+
How can I grow my business?
In the first
stage of corporate growth, entrepreneurs tend to focus on day-to-day operations
with little time for strategic or long-term planning.
“In Stage 2,
however, it becomes critical to establish organizational infrastructure,
processes, policies and standard operating procedures and learn to use
technology more effectively,” Mike says. “Having the right people on your team
and as advisors can help you navigate through this change.”
It's a good
idea to establish an informal board of corporate advisors.
The next steps
are to look at your people, processes, technology and infrastructure. Ask
yourself the following questions:
- People: Do I have
the people I need on my leadership team to take my company to the next
level? Have my employees received adequate training? Are they all
effective at their jobs?
Do we have
set processes, procedures and policies in place to ensure consistent
Do I need
an in-house IT team as we grow, or would it be better to outsource this
function? Are we using the right software and hardware to meet our needs
and operate efficiently?
current facilities the best fit for our needs? Are there any
inefficiencies or unnecessary costs in our supply chain or distribution
concentrating on these crucial areas and strategically changing and managing
your people, processes, technology and infrastructure through each stage of
corporate growth, you can grow your business efficiently and effectively,
instead of simply evolving,” Mike says.
Grossman is an associate principal in the Entrepreneurial Services department
of Kaufman Rossin. She works with entrepreneurs, high-net worth individuals,
and nonprofits. She is a certified QuickBooks ProAdvisor, a licensed Certified
Public Accountant in the State of Florida, and a member of both the American
Institute of Certified Public Accountants and Florida Institute of Certified