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Business Growth 2
Think Big to
Grow Big
Part 2:
Strategies for Entrepreneurial Companies
By Paul R.
Lloyd
In this series,
we are looking at the way real growth results from a well-executed
strategy.
Entrepreneurial Phase
Don’t confuse
entrepreneur with the entrepreneurial phase of a company’s life
cycle. In a true entrepreneurial phase, you face little or no
competition because of the uniqueness of your product, service or
value proposition. If your company is in the entrepreneurial phase,
you’re on the high growth track. Your success is being built on a
solid base of an innovative product or service with little or no
competition. Your creativity and innovative thinking as an owner are
the driving forces of your success.
If you are not
in a rapid growth mode, chances are you are not in the
entrepreneurial phase. You may be the owner of a start-up, but if
your company is not based on new technology or a unique selling
space, then you may have started a company in a mature or declining
industry. In this case you are facing stiff competition that keeps
you from fast track growth. If you win new clients by taking
business away from your competition, you are not in an
entrepreneurial phase. A true entrepreneurial firm faces little or
no competition because the owner has found a way to marginalize
competition.
Future articles
in this series will offer strategies for companies in the mature or
declining phases. For now, here are some strategies for fast growth
entrepreneurs:
Strategy 1:
Anticipate the Top – Ride the wave up, but on the way,
gain an understanding of where the top of the growth curve is. Plan
for one of two actions as you reach maturity:
1. Turn the
business over to professional managers
to free you to explore your next great adventure. Entrepreneurs are
trailblazers. We shouldn’t allow ourselves to become bogged down
managing growing corporate structures. For example, Bill Gates
stepped down from running Microsoft so he could focus on innovation
– where he could provide the highest value to the company and
achieve the greatest personal satisfaction.
2. Sell the
company as soon as you see the top coming.
Selling out allows you to devote your full-time energies to building
your next company and riding that exhilarating curve to another top.
This is the life of the serial entrepreneur. This is the 3M model,
except they do it with products rather than the company itself. They
invent a new product and take it to market. When the market for the
product matures, they sell out. This model keeps you on the rapid
growth upswing side of the cycle. If successful, your return on
investment will be extremely high over a long period of time. The
downside is not every good idea succeeds so you have to be prepared
to bail out if the curve up doesn’t increase fast enough.
Strategy 2:
Reinvest for Growth –
Accelerate your ride up the growth curve by reinvesting in your
business. As the company grows, expand your marketing and sales
activities to gain more customers and accelerate the rate of growth.
Get to the top of the growth curb as quickly as you can. The more
you dominate the market, the bigger the barrier to entry you create
to discourage competition. Reinvest in your operations, processes
and people. The idea is to reach the next stage organizationally
before you actually arrive there in sales volume. For example, a
company with one-half million dollars in annual sales needs to begin
thinking and acting like a multi-million dollar company so that they
are prepared when they achieve higher levels of success.
Strategy 3:
Marginalize Competition –
Innovative ideas don’t stay innovative for long. Your
competition will enter your unique market as soon as it becomes
apparent that money can be made in your space. Stay on the look out
for new and innovative solutions to stay in front of competition.
Strategy 4:
Compensate for your Weaknesses
– Gain an understanding of your strengths and weaknesses as a
business owner. Small business owners usually don’t have the
professional C-Level staff to rely on to help run the company. If
you’re trying to wear many hats in your organization, hire the help
you need through alliances, staffing or suppliers.
If you need
help fleshing out these strategies for your company, or if you’d
like to discuss this topic in more detail, join me for a cup of
coffee at a nearby coffee shop. Email or call 630-393-6516.
Next time we’ll
talk about strategies for companies in the mature phase of the
business cycle.
Join Paul
Lloyd for a business casual conversation at a coffee shop near
you. Call 630-393-6516 or send an
email.
Where do you
want to go next?
Read Part 1 of this series
Read
Business Growth 1
Visit
Archive
Email a comment to the author
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