Source | Entrepreneur
You’ve taken the plunge and started a new business. You made it through the first year and turned a profit – congratulations. When an entrepreneur takes an idea and turns it into a profitable business, it’s a cause for celebration. But it’s not enough to just keep doing the same thing — continued success is going to depend on different and evolving strategies. In order to scale up and grow in a big way, business owners have to prioritize a growth to-do list.
Mohan Sawhney, a professor at the Northwestern Kellogg School of Management, notes that “[while] it’s tempting to view business growth as a smooth, linear path, the reality is much more complicated.” Often, the talent and leadership that enable rapid expansion in a company’s early stages may not be enough to keep fueling high growth and this causes businesses to stagnate.
In order to properly make this pivotal transition, business owners have to understand all the elements at play, and accept that scalability is needed across all operations. Here are four fundamental steps growth-stage businesses must take:
1. Stay focused on what sells best.
Many startups fail because they spread themselves too thin at the growth stage. They try to do everything for any client or they try to expand into multiple new markets simultaneously. And many times these strategies just do not work.
Think of the classic board game Risk. In each competition there is usually one player who tries to take over the world way too early by battling anywhere and everywhere. Inevitably, this strategy fails — and the empire crumbles.
Instead, business owners should concentrate on core business areas. Expansion is a must but thoughtful, targeted growth is what wins the day. Being too opportunistic can waste precious resources, as well as take focus away from what made them successful in the first place.
2. Then innovate and expand strategically.
During the growth stage, pivoting towards what sells best and moving away from what doesn’t is the key ingredient to maintaining, or even increasing, expectations. Entrepreneurs need to strategize and innovate into niches that will help the core business expand.
Consider everything Uber has done to date. Uber continues to penetrate new and potentially lucrative markets around the world. Their mobile payment services have evolved to accommodate multiple payment options, which has proved useful in international markets. And the company is consistently increasing its selection of vehicles. Uber has also been expanding its services to include off-the-beaten-path travel options, including hot air balloons rides in China and boat transport in Turkey.
Remember that Uber is not a bona fide success yet — but it has gone from a start up to a growth stage enterprise successfully. Uber has kept its operations growing through a mix of calculated market expansion and innovative services that help push its core business goal. But it’s continued to focus on what it sells best and what its customers want most — rides.