Business Growth Stage 2: Early Growth
This is the third post in a five part series introducing the four stages of business growth.
The Early Growth stage builds on the company’s success in Stage One. The company has established a perfect fit between its product and the needs of the market, developed a sales process, and identified a set of initial pilot customers that can serve as valuable references. Now it’s time to launch the company and focus on sales.
The primary objective of the Early Growth Stage is to create customer demand and drive that demand into sales. This will require the company to begin scaling its sales and marketing efforts, as well as its ability to deliver the product or service.
It’s tempting to think that now that you’ve discovered a repeatable business model – one that predictably generates revenue – you can rapidly scale the business. However, a company entering this stage is still in a somewhat vulnerable position. It may have a handful of early customers, but broader market acceptance is still unproven. It has limited resources. The organization lacks scale. Its infrastructure is not developed. And it has other weaknesses that should be expected in a young company.
The challenges of growing and managing a business are fundamentally different from those of starting a new venture. As sales increase, so will the number of customers, number of employees, and so on. A young company can quickly become overwhelmed by it’s own growth and stumble or even fall.
- Launch a differentiated product or service.
- Begin to scale sales and marketing efforts.
- Prove broader market acceptance of your product or service by attracting and selling to a larger base of customers.
- Develop basic operations and initial infrastructure, add key resources and hire enough people to support a growing customer base.
- Gain visibility and credibility by winning a set of satisfied early “reference” customers to help attract additional customers.
- Begin building strategic alliances and partnerships with larger companies.