Congratulations! If you’ve moved past the startup phase, you’ve achieved something many entrepreneurs never do. You’ve built a foundation, found your market, and created initial stability.
But now, the rules of the game are changing. You are entering the Growth Phase, and while the goal is exciting—generating consistent, positive cash flow and multiplying profits—it comes with a whole new set of challenges.
In this phase, many businesses hit a “Managerial Plateau.” Here is how to navigate the growth roller coaster and prepare your business to scale.
The Delicate Balance: Supply vs. Demand
The Growth Phase is defined by a constant tug-of-war between creating demand (marketing) and managing supply (delivery).
1. Creating Demand (The Marketing Engine)
With a solid foundation in place, you can finally afford to be intentional and consistent with your marketing. This means:
- Multi-Channel Marketing: Using various platforms to reach new clients.
- Customer Service as Marketing: Providing such great service that existing clients return.
- The Profitability Secret: Existing clients are almost always more profitable than new ones. High-level growth requires a strategy that keeps them coming back.
2. Creating Supply (The Capacity Engine)
The biggest mistake growth-phase companies make is over-marketing. If your sales team is better than your delivery team, you will eventually destroy your reputation.
- Reinvestment: As you generate positive cash flow, you must earmark a portion of it to increase your supply.
- Efficiency and Training: This isn’t just about hiring more people; it’s about investing in systems that increase productivity and training your team to handle higher volumes without losing quality.
Systemization: More Than Just Manuals
To fully master the growth phase, you must complete the systemization of your business. However, many owners misunderstand what “systems” actually are.
True systemization is not just documenting a process on a piece of paper. It is about creating a culture and a set of disciplines that ensure those systems are actually used. Without a culture of discipline, your manuals will simply collect dust while your operations remain chaotic.
The Managerial Plateau: Why “Force of Will” Fails
This is the point where many businesses stall or even collapse. As a company grows, it eventually outgrows the owner’s ability to manage every detail by sheer force of will.
When you started, you could juggle all the balls. You could see every problem and fix it personally. But in the growth phase, there are far too many balls in the air.
The number one reason businesses stop growing and become less profitable is the failure to install formal management systems.
Without formal management practices, you cannot ensure that work is properly planned and executed consistently. You become the bottleneck of your own success.
The Goal: Moving from Addition to Multiplication
At the end of the growth phase, your operations should be fully systemized. The goal of this phase is to move from simply adding revenue (which often adds more stress) to multiplying profits in the scale phase.
Ready to Exit the Roller Coaster?
If you feel like you are currently white-knuckling your way through growth, it’s time to follow the 9-steps to systemize your business and to install management systems.
The ActionCOACH Business Operating System (ABOS) is designed to help you navigate this specific transition. We provide the tools to balance your supply and demand while installing the management infrastructure you need to reach the Scale and Exit phases. Schedule an intro call to learn more.
Author: Mark McNulty, Business Coach in Louisville, KY