Planning for an Exit in the Future: The Secret to Long-Term Business Success

Planning for a business exit might sound like something you’d deal with when retirement is on the horizon, but savvy business owners know better. In fact, exit planning isn’t just about ensuring a smooth departure, it is also about building a stronger, more profitable, and sustainable business today, that attracts a buyer tomorrow. Whether your goal is to sell, transfer ownership to family, or merge with another entity, a well-thought through exit plan that is being actively managed can serve as a roadmap for sustainable growth and long-term success.

Let us consider how planning an exit ahead of time can lead to sustainable growth and why an exit strategy says a lot about your company's future.

The Intersection of Exit Planning and Business Growth

Imagine you're driving with no particular destination in mind. You might enjoy the ride for a while, but before long, you'll be lost, burning time and gas driving around in circles. Most business owners do business this way, they are busy at work with no finishing line in sight. This lack of direction typically manifests itself in inefficiencies, unrealized opportunities, and stalled growth.

Exit planning, though, gives you that clear finishing line. It forces you to ask big questions:

  • What is my business's exit strategy?
  • Who will own it when I retire?
  • How much value should my business provide on exit?
  • What will I do when I’ve exited

Answer those, and you've got a framework for making decisions that's aligned with your ultimate goals. Clearness equals more intentional leadership, more effective deployment of resources, and a strategy that propels growth as strongly as profit.

The Fundamental Drivers Connecting Exit Planning and Growth

1. Higher Revenue and Profitability

A good exit strategy will begin with the valuation of your business. This process reveals areas where revenue and profitability can be improved. Whether this is through cost reduction, pricing, or expansion into new markets. Owners who create their exit strategy early are more likely to implement these changes earlier, creating a stronger financially positioned business.

2. Improved Cash Flow Management

Cash flow is a company's lifeblood, and particularly critical in exit planning. Exit planning forces owners to justify operations, end wasteful expenditures, and create reserves. Not only will this make the business more attractive to future buyers or successors, but it will also allow for sustainable growth by providing the company with the liquidity to withstand setbacks. This effectively allows or forces the owner to move from just being an operator/owner.

3. Leadership Development

Successful exit is also dependent on a good leadership team. Selling or transferring the business to family, a good team will add value and ensure continuity. Exit planning necessitates identifying and developing leaders in time, and this sets a culture of skills development, accountability and innovation that fuels growth.

4. Operational Excellence

Companies with an exit strategy in place are more apt to be operationally sound. Either through process re-engineering or through technology leverage, these improvements make the company run better and more attractive to purchasers. A company that runs like a top is not just worth more, it is also stronger and more scalable.

5. Market Positioning

Exit planning also involves the analysis of your competitive landscape. The understanding of where you are in your market enables you to see how to differentiate your business, establish your brand, and acquire additional market share. Such positioning allows long-term expansion and optimizing the value of your business at the time you want to exit.

How Exit Plans Differ with Exit Strategies

All exit strategies are not equal, and your final destination will have a significant impact on how you proceed with planning to exit your business. Below is a more detailed look at how exit planning differs by strategy:

Selling to a Strategic Buyer

If your aim is to sell to a strategic buyer such as a competitor or a business in an allied industry—your emphasis will be on highlighting the opportunity for synergies. Strategic buyers often will pay a premium for businesses that supplement their activities and expand the opportunities for selling their core products to your client or customer base. Exit planning for this approach may include:

  • Developing proprietary assets.
  • Establishing a loyal customer base.
  • Illustrating how easily your company can fit into the acquiring firm's operations.

Selling to a Financial Buyer

Financial buyers, such as private equity groups, have no interest other than the financial success of your business. They require high cash generation, good prospects for expansion, and limited operating risk. Your exit plan must emphasize the following to appeal to this category of buyer:

  • Optimizing financial performance.
  • Designing a scalable business model.
  • Removing key people or owner dependency.

Internal Succession

For those who will be leaving the business to family members or employees, continuity is most critical. This plan will generally involve:

  • Successor development to take the lead.
  • Formalized processes and documentation development.
  • Establishing buy-sell agreements to avoid future disagreements.

Initial Public Offering (IPO)

IPOs are not typical for middle-market businesses but are worth noting. An IPO will have planning focused on rigorous scrutiny of financials, compliance, and governance. Exit planning for this choice will involve:

  • Strengthening financial reporting systems.
  • Developing a strong board of directors.
  • Demonstrating steady revenue growth and profitability.

Liquidation

Others will choose to liquidate assets. While this approach generally returns the least, it can be the best option for struggling businesses. Exit planning here is designed to get maximum value out of assets and minimize liabilities.

Benefits of Exit Planning

Your business is like a fruit tree and takes time to yield, the sooner you plant it the better. Similarly Exit planning as soon as you can not only prepares you for the future, it transforms your business today. By focusing on value creation, operational excellence, and developing leadership, you can develop a company that is not reliant on you. Building it in this way makes it attractive to buyers, successors, as well as assuring its long-term success.

Exit planning today, provides you with room for maneuver. Markets fluctuate, your circumstances alter, and opportunities arise. Having your exit strategy in place gives you the ability to adapt without losing your way. Whether you find yourself faced with an unwanted health issue, a serious unexpected offer, or need to pivot, you'll be in a position to make good decisions.

Conclusion

Planning your exit isn't about leaving, it's about leading on purpose. By lining up the operations, money, and leadership of your business with where you really want to be, you're charting a course for long-term success. And though your personal exit plan will dictate what you do at every point along the way, the end result is always the same: building a thriving, valuable business that endures.

So, ask yourself—where are you headed?

The sooner you plan, the sooner you'll position your business for growth today and success tomorrow.

 

 


Unlocking Potential: Important Business Growth Areas and the Role of a Growth Coach

Business growth isn’t a happy accident. Success comes from intentional actions, a clear plan, and a strong focus on important areas. For businesses making $5M to $300M in revenue, growth is not just about getting bigger. It’s about growing wisely, maintaining progress, and getting ready for the future.

In this blog, we will look at factors that help businesses grow. We will also discuss how a business growth coach or consultant can unlock your organization’s potential.

The Pillars of Business Growth

While every business is unique, growth tends to hinge on several universal factors. Leaders who focus on these areas create stronger foundations for scaling their companies.

  1. Strategic Vision and Execution

Without a clear vision, even the most ambitious business can falter. Strategic vision is about knowing where you’re going and having a roadmap to get there. Growth-oriented businesses prioritize:

  •  Clarity of Purpose: Defining what sets them apart in their market.
  • Goal Alignment: Ensuring every team member understands and works toward shared objectives.
  • Execution Excellence: Turning ideas into actionable steps and monitoring progress.
  1. Operational Efficiency

Inefficient systems and processes can harm growth. They create frustration and need more resources to keep things running. Streamlining operations allows businesses to scale without breaking under the weight of inefficiencies. Key focuses here include:

  • Automation and Technology: Leveraging tools that reduce manual effort and errors.
  • Lean Processes: Eliminating redundancies and bottlenecks.
  • Data-Driven Decision Making: Using analytics to identify areas for improvement.
  • Review: Review when you need to step up technology and break down processes.
  1. Talent and Leadership Development

No growth strategy succeeds without the right people. Businesses must invest in their teams to cultivate talent and nurture strong leadership. This involves:

  • Attracting Top Talent: Creating the culture and an environment that draws high performers.
  • Ongoing Training: Ensuring employees skills and abilities grow alongside the business.
  • Succession Planning: Preparing the next generation of leaders to sustain growth.
  • Functional Review: Knowing when roles and functions are required to be reassigned.
  1. Customer Focus

Growth isn’t just about acquiring new customers; it’s also about retaining and delighting existing ones. Successful businesses emphasize:

  • Customer Experience (CX): Making every interaction meaningful and memorable.
  • Feedback Loops: Listening to customers and adapting to their needs.
  • Value Proposition: Continuously innovating to offer unmatched value.
  • Customer Review: As a company grows sometimes it is no longer able to adequately service its earlier customers.
  1. Financial Discipline

Rapid growth without financial oversight can lead to disaster. Companies need robust financial management practices, including:

  • Budgeting and Forecasting: Planning for sustainable growth.
  • Cash Flow Management: Ensuring liquidity for day-to-day operations and investments.
  • Profitability Analysis: Understanding which areas of the business drive value.
  • Working Capital Review: Knowing when to get additional capital to support growth plans.

Why Business Growth Stalls

Even with these pillars in place, growth stalls are common, particularly between $10M and $24M in revenue. These stalls often stem from challenges such as:

  • Losing focus on core competencies.
  • Overextending resources.
  • Resistance to necessary organizational changes.
  • Leadership blind spots or lack of alignment.
  • Outdated skills and experience.
  • Too much reliance on the owner in key functions.

Recognizing these signs early and addressing them proactively is critical to reigniting growth.

The Role of a Business Growth Coach and Business Growth Consultant

Achieving sustained growth often requires an external perspective. This is where a business growth coach or consultant steps in. Their role is multifaceted, blending strategy, accountability, and expertise to empower leaders and their teams.

  1. Strategic Insights and Planning

A growth coach provides clarity and helps refine the company’s vision. They ask the tough questions:

  • Are your goals realistic and achievable?
  • Are your strategies aligned with market trends and internal capabilities?
  • Do you have the team to achieve this?

They also bring fresh perspectives, identifying opportunities and risks that leaders may overlook.

  1. Accountability Partner

Growth requires discipline. A coach ensures leaders stay focused on their objectives, track progress, and address obstacles head-on. By fostering accountability, they help businesses maintain momentum.

  1. Problem-Solving Expertise

Experienced growth consultants have seen it all. They draw on real-world experience to solve challenges efficiently, from operational bottlenecks to cultural misalignments.

  1. Talent Development and Leadership Coaching

Effective growth consultants also work on the human side of the business. They coach leaders to improve decision-making, communication, and team management skills. This personal development ripples throughout the organization, creating a culture of excellence.

  1. Navigating Complex Transitions

Growth consultants help businesses during important changes. They support companies preparing for an acquisition, entering new markets, or changing leadership. Their goal is to make these transitions smooth and easy.

Choosing the Right Business Growth Partner

Not all growth consultants are created equal. To find the right fit for your business, consider:

  • Track Record: Have they successfully guided businesses like yours?
  • Cultural Fit: Will they mesh with your team’s values and dynamics?
  • Custom Approach: Do they tailor strategies to your unique needs, or rely on one-size-fits-all solutions?
  • Industry Expertise: Is industry experience necessary or do you want someone to challenge industry norms?

 Sustained Growth Starts Here

Growth isn’t just about scaling revenue or headcount. It’s about creating a business that’s resilient, innovative, and prepared for the future. By focusing on strategic vision, operational efficiency, leadership development, customer satisfaction, and financial discipline, businesses can unlock new levels of success.

Working with a business growth coach or consultant boosts these efforts. They offer guidance and accountability to help you avoid mistakes and take advantage of opportunities.

Are you ready to break through your growth barriers? It starts with a conversation.

 


The Importance of Business Exit Planning: Strategies for a Smooth Transition

As a business owner, the concept of exit planning might seem like a distant concern, something to be dealt with far in the future. However, the reality is that exit planning is a critical component of your overall business strategy. If you want to sell your business, pass it to someone else, or merge with another company, a good exit plan is important. It helps make the transition smooth and increases the value of your business.

In this guide, we will look at the important factors for good business exit planning. We will also discuss what can happen if you do not plan for your exit. By the end of this article, you will understand why exit planning is important. You will also learn the steps you can take to prepare for a successful transition.

The Foundations of Business Exit Planning

Exit planning involves a series of strategic decisions and actions aimed at preparing your business for a successful handover. Below are the primary factors that support effective exit planning:

1. Understanding Your Objectives

To create a successful exit plan, you must first understand your personal and business goals clearly. Are you looking to retire, pursue new opportunities, or ensure the continuity of your business through a family succession? Knowing your end goals will help you tailor your exit strategy to meet your specific needs.

2. Valuation of Your Business

An accurate valuation of your business is crucial for exit planning. This involves assessing the worth of your company's assets, liabilities, and future earning potential. Professional valuation experts can provide an unbiased assessment, which will be invaluable when negotiating with potential buyers or successors.

3. Strengthening Business Operations

A business that runs smoothly and efficiently is far more attractive to potential buyers or successors. Focus on strengthening your operations by streamlining processes, reducing costs, and increasing profitability. Demonstrating a robust and scalable operation can significantly enhance the perceived value of your business.

4. Financial Planning and Tax Considerations

Effective exit planning requires careful financial planning, including understanding the tax implications of various exit strategies. Working with financial advisors and tax experts can help you lower your taxes. They can also increase the financial benefits of your exit.

5. Succession Planning

If your goal is to pass the business on to a successor, it's essential to have a clear succession plan in place. This involves identifying and mentoring potential successors, ensuring they have the necessary skills and experience to take over, and gradually transitioning responsibilities to them.

6. Legal Considerations

Ensuring that all legal aspects of your business are in order is vital for a smooth transition. This includes reviewing contracts, intellectual property rights, and any potential liabilities. Engaging with legal experts can help you navigate these complexities and avoid potential pitfalls.

7. Timing and Market Conditions

The timing of your exit can significantly impact the success of the transition. Being aware of market conditions and economic trends can help you choose the optimal time to exit. For example, selling your business when demand is high can lead to a better sale price. Buyers want quality businesses to meet their goals.

The Impact of Neglecting Exit Planning

Failing to plan for your business exit can have serious repercussions. Here are some potential risks of not having an exit strategy in place:

1. Reduced Business Value

Without a clear exit plan, you may miss opportunities to enhance the value of your business. Potential buyers or successors may perceive a lack of preparation as a sign of weakness, resulting in lower offers or reduced terms.

2. Increased Stress and Uncertainty

A sudden or unplanned exit can lead to increased stress and uncertainty for both you and your employees. This can result in a chaotic transition, affecting the stability and performance of the business.

3. Tax Inefficiencies

Without proper financial planning, you may face significant tax liabilities that could have been minimized with a well-structured exit strategy. This can result in a signifcantly lower net gain from the sale or transfer of your business.

4. Legal and Operational Challenges

Failing to address legal and operational issues prior to your exit can lead to complications during the transition. For instance, unresolved contractual obligations or intellectual property disputes can delay the process and create additional costs.

5. Missed Opportunities for Continuity

Without a solid succession plan, the future of your business may be uncertain. This can affect employee morale and customer confidence, potentially leading to a decline in business performance.

Actionable Steps for Effective Exit Planning

To avoid the pitfalls of unplanned exits, consider taking the following actionable steps:

  1. Engage with Professional Advisors: Work with valuation experts, financial advisors, tax professionals, exit planners, and legal experts to ensure all aspects of your exit plan are covered.
  2. Develop a Clear Roadmap: Outline your objectives and create a detailed action plan with specific milestones and timelines.
  3. Strengthen Your Business Operations: Continuously improve your business processes, financial performance, and operational efficiency to enhance the attractiveness of your business.
  4. Identify and Prepare Successors: If succession is your goal, start early by identifying potential successors and providing them with the necessary training and experience.
  5. Stay Informed on Market Conditions: Monitor industry trends and economic conditions to choose the optimal time for your exit.

Conclusion

Business exit planning is not just about the end. It is about making a plan that helps your business thrive after you leave. To have a successful and profitable transition, you need to understand the key factors for good exit planning. Then, take action to prepare.

Remember, the time to start planning is now. The earlier you begin, the better positioned you will be to navigate the complexities of business exit and secure the future you envision.

By spending time and effort on exit planning now, you can create a lasting legacy of success for the future.


The Crucial Role of Business Exit Planning: Avoiding the Pitfalls of Unpreparedness

Business exit planning isn’t just a good idea—it’s a necessity. Every business owner eventually faces a moment when they step away from their company, whether through a sale, succession, or retirement. The question is: will that exit be successful or chaotic? The answer lies in the planning.

When owners think about growing their businesses, scaling revenue, and managing day-to-day operations, the concept of leaving the business often takes a backseat. However, failing to plan for an exit can have significant consequences—not only financially but also personally. Thinking that you are ever young sets you and your family up for failure. In this post, we’ll explore the importance of **business exit planning**, the factors that contribute to a smooth exit, and the risks of ignoring this critical process.

Why Business Exit Planning Matters

It is very rare that someone starts a business thinking about how they’ll exit. Yet, just as planning is essential for growth, it is equally crucial for the endgame, and work towards this from day one. A well-structured exit plan positions a business for success when the time comes to transfer ownership or sell. Here’s why planning is so important:

1. Maximizing Business Value

When you decide to sell or transition your business, maximizing its value is a top priority. Without a plan, many owners leave money on the table. A solid exit strategy allows you to fine-tune your operations, improve your financials, and ensure that your business is attractive to potential buyers or successors. Early preparation can increase valuation by addressing the weaknesses that might otherwise lower the offer.

2. Control Over Timing

Market conditions, personal readiness, personal health, and business health all play a role in the success of an exit. Planning allows you to have control over when and how you exit, being prepared allows you to align your timing with favorable market conditions. Without planning, you may find yourself exiting during a downturn or personal crisis, significantly diminishing your returns.

3. Legacy and Continuity

For many business owners, the idea of leaving behind a legacy is just as important as financial gain. A well-thought-out plan ensures the business can continue to thrive under new leadership, preserving jobs and maintaining the culture and values you’ve worked so hard to build.

4. Reducing Stress and Uncertainty

Exiting a business is often an emotional process, especially if the decision is sudden or unplanned. Planning ahead provides clarity, reduces the likelihood of a rushed exit, and minimizes uncertainty for both you and your employees. This allows for a smoother transition and less disruption for the business.

Key Factors in Business Exit Planning

The process of exit planning isn’t a one-size-fits-all approach. Each business and its owner is unique, and the factors that drive a successful exit vary based on the industry, market conditions, and owner’s goals. However, several key elements are consistently critical for any business looking to create a solid exit strategy:

1. Early Preparation

The earlier you begin planning, the better. Ideally, business owners should start preparing for their exit five to ten years before they plan to leave. This gives you ample time to groom successors, clean up financials, and position the business for maximum value. Rushing through the process, on the other hand, often leads to missed opportunities and costly mistakes.

2. Clear Goals

Define your personal and professional goals. Do you want to sell to the highest bidder? Transition the business to a family member or employees? Or perhaps merge with another company? Understanding your exit goals early on shapes the direction of your strategy.

3. Valuation and Financial Health

A comprehensive business valuation and how it compares to your post exit needs is the cornerstone of exit planning. Many owners overestimate the value of their business, only to face disappointment when they try to sell. Engaging a professional team gives you a realistic view of what your business is worth and what needs to be done to enhance that value.

Additionally, financial health is key. Clean and transparent financial statements make your business more attractive to buyers. Buyers want to see profitability, low debt, and strong cash flow. Having the right financial practices in place over time will prevent surprises during due diligence.

4. Succession Planning

If your goal is to pass the business to a successor, succession planning is critical. Whether you’re grooming family members, employees, or external candidates, the process can take years. Developing leadership skills in potential successors ensures a smoother transition and reduces the risk of leadership gaps when you leave.

5. Tax and Legal Considerations

Without proper planning, taxes can take a significant chunk out of your sale proceeds. Structuring the sale in a tax-efficient manner, whether through installment sales, employee stock ownership plans (ESOPs), or other vehicles, can help minimize your tax burden. It’s equally important to ensure that all legal aspects are in order—contracts, intellectual property rights, and compliance measures—to avoid costly legal challenges down the road.

6. Risk Mitigation

Every business carries risks, but savvy owners know how to mitigate them before an exit. Whether it’s diversifying your customer base, addressing supply chain vulnerabilities, or preparing for economic downturns, reducing risks will make your business more attractive to buyers. Identifying and addressing risks early in the planning process is essential for maximizing value.

The Impact of No Exit Plan

Now, let’s consider what happens if you skip this vital step, as many do. The risks of exiting a business without a plan are significant and far-reaching:

1. Lower Business Value

Without a plan, the business likely isn’t operating at peak efficiency. Unaddressed issues such as declining revenue, outdated technology, or poor management practices can lead to lower offers from potential buyers. Owners often scramble to fix these problems at the last minute, but by then, it’s often too late to make a meaningful impact.

2. Forced Exit at the Wrong Time

Life has a way of throwing curveballs. Illness, family issues, or market downturns can force an owner to exit unexpectedly. Without a plan, you may be forced to sell in unfavorable conditions, resulting in a significant loss of value.

For example, during an economic recession, buyers may hesitate or offer lower valuations. If you haven’t prepared, you might have no choice but to accept a suboptimal offer.

3. Emotional Toll

Exiting without a plan can be highly emotional. Owners may struggle to let go of their businesses, especially if the process is rushed. The lack of personal and business preparedness often leads to stress, regret, and even resentment as owners grapple with the realization that their exit is not as smooth or profitable as they had hoped.

4. Disrupted Operations

Sudden exits without a proper transition plan can leave a leadership vacuum. Employees may feel uncertain about their future, which can lead to morale issues or even the departure of key talent. A poorly executed exit can cause chaos within the business, leading to declining performance, customer dissatisfaction, and reduced value.

5. Tax Burdens

Failing to plan for the tax implications of an exit can be a costly mistake. The IRS doesn’t care whether you’re ready or not—without the proper structures in place, you could lose a significant portion of your proceeds to taxes. Many owners are shocked by the tax bills they face after a sale, often because they didn’t take the time to prepare in advance.

6. No Sale or Transition

Many businesses that do not have a plan do not sell when they are put on the market and are considered too risky for buyers as they currently stand. Owners don’t like their baby being called ugly, and unfortunately beauty is in the eye of the beholder. This forces the seller to either shore up the business or give up on the dream of their legacy.

Conclusion: Plan Early, Exit Gracefully

Business exit planning is not just about maximizing value—it’s about leaving your business on your terms, with peace of mind. By starting early, defining your goals, and addressing key factors like financial health, succession, and risk, you can ensure a smooth and profitable exit.

The consequences of failing to plan are too significant to ignore. As the old saying goes, “Failing to plan is planning to fail.” So, whether you’re five or ten years away from your exit, start planning now. The future of your business—and your legacy—depends on it.


Navigating the Path to Sustainable Business Growth

In a changing business world, leaders and owners must focus on sustainable growth. This is key for long-term success and survival.

Sustainable growth is not just about increasing revenues; it involves building a resilient foundation capable of withstanding market fluctuations, operational challenges, and competitive pressures.

Today, we will explore the key factors that help businesses grow sustainably. We will also identify the threats that can harm this growth.

Understanding Sustainable Business Growth

Sustainable business growth means a company can grow its operations, revenue, and market presence over the long term. This growth should match the company’s core values and vision. It must also balance the needs of stakeholders, like employees, customers, investors, and the environment.

Key Factors Supporting Sustainable Business Growth

1. Robust Financial Management

A solid financial foundation is critical for sustainable growth. This involves:

  • Effective Cash Flow Management: Ensuring there are enough liquid assets to cover day-to-day operations.
  • Prudent Capital Allocation: Making strategic investments that drive growth without overstretching resources.
  • Cost Optimization: Continuously identifying opportunities to reduce waste and improve efficiency.

Example: A tech startup might initially focus on securing adequate venture capital but must eventually transition to generating consistent revenue streams to sustain growth.

2. Adaptive Business Strategy

An adaptive and dynamic business strategy can help a company respond effectively to market changes. This includes:

  • Market Research and Analysis: Staying informed about industry trends and customer needs.
  • Agility in Decision-Making: Quickly pivoting strategies based on data-driven insights.
  • Continuous Improvement: Implementing feedback loops to constantly refine products, services, and processes.

Example: When Nokia shifted from a rubber footwear company to a telecommunications giant, it exemplified adaptive business strategy.

3. Strong Leadership and Management

Leaders play a pivotal role in shaping the company’s future. Effective leadership involves:

  • Visionary Thinking: Setting a clear, inspiring vision for the future.
  • Employee Empowerment: Building a skilled and motivated team by fostering a healthy corporate culture.
  • Transparent Communication: Maintaining open channels of communication across all levels of the organization.

Example: The transformational leadership of Starbucks’ Howard Schultz helped the company navigate and thrive through numerous challenges.

4. Customer-Centric Approach

Commitment to customer satisfaction and loyalty can significantly impact long-term growth.

  • Customer Feedback Mechanisms: Implementing systematic ways to gather and act on customer feedback.
  • Exceptional Customer Service: Ensuring a memorable and positive experience at every touchpoint.
  • Value Proposition Enhancement: Continuously improving the value offered to customers.

Example: Amazon’s relentless focus on customer satisfaction has been a key driver of its sustainable growth.

5. Technological Integration

Leveraging technology can enhance efficiency, innovation, and competitiveness.

  • Automation: Streamlining operations to reduce costs and improve accuracy.
  • Data Analytics: Making informed decisions based on data insights.
  • Digital Transformation: Adapting processes and systems to align with modern technological advancements.

Example: Uber’s use of data analytics and mobile technology revolutionized the transportation industry.

Challenges Threatening Sustainable Business Growth

1. Market Volatility

Unpredictable market conditions can pose significant risks. Factors include:

  • Economic Downturns: Recessions can lead to decreased consumer spending and tightened credit.
  • Regulatory Changes: New laws and regulations can impact operational and financial dynamics.
  • Competitive Pressures: Emerging competitors can disrupt market positions.

2. Operational Inefficiencies

Inefficiencies within the organization can hinder growth. These include:

  • Inadequate Processes: Outdated or redundant processes that waste resources.
  • Resource Mismanagement: Poor allocation of human, financial, and material resources.
  • Quality Control Issues: Compromised product or service quality leading to customer dissatisfaction.

3. Lack of Innovation

Stagnation through a lack of innovation can render a business obsolete. Key aspects are:

  • Resistance to Change: An unwillingness to adopt new ideas or technologies.
  • Insufficient R&D Investment: Failing to invest in research and development can stifle innovation.
  • Market Misalignment: Developing products or services that do not meet evolving market demands.

4. Cultural Disconnect

A misalignment between the company’s culture and its long-term objectives can be detrimental.

  • Employee Disengagement: Lack of motivation and commitment among employees.
  • Poor Leadership Practices: Leadership that fails to inspire, guide, and support the team.
  • Inconsistent Company Values: An inability to uphold and promote the company’s core values.

The fall of Blockbuster happened partly because it would not adapt to digital streaming. This shows how a cultural disconnect and lack of innovation can threaten a company's survival.

Conclusion

Achieving sustainable business growth requires a multifaceted approach, balancing strategic foresight with operational excellence, through a disciplined phased approach. Businesses can achieve long-term success by managing their finances well. They should have a flexible business strategy and strong leadership. A focus on customers is important, too.

Additionally, using technology can help build a solid foundation for growth. However, it’s equally important to be vigilant about potential threats, including market volatility, operational inefficiencies, a lack of innovation, and cultural disconnect.

For business owners and leaders, knowing these factors and challenges is the first step to achieving sustainable growth. Using smart strategies and anticipating market changes can help your business thrive. Your business can not only survive but also succeed in a changing world.

Remember, the goal is to build a business that grows steadily. It should also be sustainable over time. This way, it creates lasting value for everyone involved.


Maximizing Success: Understanding the Roles of Growth Experts

In the competitive and rapidly evolving business environment, companies need to adapt swiftly to foster sustainable long-term growth. Challenges in scaling effectively are common across all sizes of enterprises, from startups to multinational corporations. Outlining a clear and sustainable growth path is important. This task can be difficult because of the complexities of today's business world.

This necessitates the intervention of specialized professionals such as business growth strategists, consultants, and coaches. Their roles may look similar at first.

However, each one provides different services. These services tailor themselves to meet the specific needs of growing businesses. A precise understanding of these differences and how each role benefits a business is pivotal for achieving sustained success.

This article explains the roles and main duties of business growth strategists, consultants, and coaches. It helps you understand which professional is best for your business needs.

1. Business Growth Strategist

A business growth strategist offers expertise in crafting long-term growth plans that help businesses scale effectively. Their approach combines visionary thinking with a strong emphasis on strategic planning, market positioning, and identifying long-term objectives. They excel in recognizing growth opportunities and formulating robust plans to capitalize on these prospects.

Key Responsibilities:

  • Growth Strategy Development: Through comprehensive industry research, customer behavior analysis, and competitive positioning, strategists help businesses pinpoint unique value propositions and differentiation opportunities.
  • Market Exploration: They explore market trends and gather useful insights. This helps businesses understand their market fit and find areas for growth.
  • Long-Term Visioning: Strategists focus on the bigger, long-term goals of the business. This is different from the immediate solutions that consultants often prioritize.

When aiming for significant growth or facing unclear paths, working with a business growth strategist can be crucial.

2. Business Growth Consultant

In contrast to strategists, business growth consultants primarily focus on the practical implementation of growth strategies. They are pivotal in addressing specific operational issues and facilitating effective strategy execution across various business facets.

Key Responsibilities:

  • Problem Solving: Consultants frequently tackle specific barriers to growth, such as operational inefficiencies or market entry challenges.
  • Tactical Implementation: They work closely with company teams to make strategies happen. They take practical steps to reach business goals.
  • Performance Optimization: By analyzing key performance metrics, consultants identify improvement areas and provide actionable solutions to enhance productivity and market penetration.

Business growth consultants are ideal when specific, actionable issues need resolving, or when strategic plans require effective execution.

3. Business Growth Coach

Growth coaches focus on personal development and leadership. They play a key role in nurturing the talent needed for business growth. They assist not just with organizational strategies but also emphasize personal development and leadership grooming.

Key Responsibilities:

  • Leadership Development: Coaches work closely with business leaders to enhance decision-making capabilities, communication skills, and overall visionary leadership.
  • Mindset and Motivation: They address internal psychological barriers, fostering a leadership mindset conducive to business growth.
  • Team Development: Coaches also play a crucial role in enhancing team dynamics, focusing on improving collaboration, communication, and conflict resolution within teams.

Hiring a growth coach can help when personal or leadership challenges affect business performance. It is also useful for building a stronger leadership team.

4. Choosing the Right Professional

Understanding the different roles of strategists, consultants, and coaches is important. This knowledge helps you find the right support for your business's growth. Often, a combination of these professionals provides a comprehensive approach, ensuring strategic planning, effective execution, and strong leadership development.

Case Study Example:

Consider a middle market business struggling to scale in its current market. The incorporation of a strategist provided insight into international expansion opportunities, while a consultant addressed operational challenges related to this strategic shift. At the same time, a coach helped the CEO and important team members improve their leadership skills. This support made management more effective as the company grew.

Conclusion

Tailoring the right mix of expertise is essential as no single business growth approach fits all scenarios. To choose between a strategist, a consultant, and a coach, evaluate your business's needs and challenges. You may also consider using all three. Recognizing their unique contributions and how they work together can turn a tough growth journey into a successful expansion.


Business Sale: How to Perfectly Time Yours for Maximum Profit

Readiness provides the bedrock upon which successful deals happen. Much like attempting to predict the stock market's fluctuations or pinpointing the exact moment an avocado reaches peak ripeness, the optimal moment to sell to your buyer successfully is rarely driven by your calendar.

Picture this: your business is a ripe avocado, ready to be plucked from the tree. But just because it's ripe doesn't mean a buyer is waiting with open arms. The buy-side, much like the whims of avocado aficionados, has specific times when they're hungry for acquisitions and times when they're not. One moment, you may find yourself inundated with interest, and the next, it's as quiet as a deserted produce aisle.

The Misconception of Readiness

A common fallacy among business owners is the perception of selling their enterprise as a unidimensional decision driven solely by certain personal milestones, such as reaching a particular age. While this mindset seems logical, it overlooks the multifaceted dynamics of the M&A environment.

Much like an avocado's ripeness is subject to external factors such as climate, market dynamics, financial health, and internal systemic stability, potential buyers' appetites are influenced by these factors.

Acknowledging this shifts the focus from a you, seller-centric viewpoint to a holistic perspective, considering both ends of the spectrum.

Understanding the Buyer's Cycle

Like nature, the corporate buy-side operates on its inherent rhythms and cycles. These rhythms dictate a company's willingness and capacity to pursue and consummate acquisitions. Industry downturns, economic recessions, or internal restructuring can dampen an otherwise eager buyer's appetite.

Conversely, phases of economic prosperity, strategic realignment, or pursuit of competitive advantage can spur a flurry of acquisition activity. Recognizing and aligning readiness with these cycles is paramount, turning the art of timing from a speculative gamble into a strategic maneuver.

The lesson from the avocado farmer is about being prepared. Preparation is also multifaceted and includes preparing the business, your estate, and yourself mentally.

The Role of Market Conditions

Economic indicators such as interest rates, inflation rates, and overall economic growth can facilitate or hinder acquisition activities. A robust economy, characterized by low-interest rates and inflation, generally augments buying capacities as financing becomes more accessible and companies seek to leverage growth via acquisitions. Conversely, in economic downturns, the focus often shifts towards consolidation, cash preservation, cost-cutting, and risk aversion, making the appetite more tepid. You have experienced these cycles directly and understand your mood to invest in growth or preserve cash.

Financial Health and Internal Stability

A potential acquirer's financial health and internal stability are critical determinants of their buying behavior, which can also be counter-cyclical. Companies in a robust financial position, with ample cash reserves, access to cheap capital, and healthy balance sheets, are more poised to undertake acquisitions, especially coming out of a soft economic cycle. They view M&A as accelerating growth, such as entering new markets or acquiring strategic assets.

Conversely, companies grappling with financial uncertainties or operational instabilities are likely to deprioritize acquisition initiatives, focusing instead on stabilizing and fortifying their core business.

Preparing for the Optimal Timing

The essence of optimizing timing for selling your business does not simply rest on observing the external environment but also on its internal readiness. Preparatory measures such as having streamlined operations, ensuring financial, legal, and people records are in order, and building a compelling narrative around the business's value proposition can significantly enhance attractiveness to potential buyers.

Some of these may seem obvious. If you were to acquire a business like yours, would they have everything to hand immediately, or would you need to spend late nights and weekends putting this together?

Furthermore, strategic planning, which enables you to identify possible synergies with buyer personas, can provide a competitive edge, making your business a target for acquisition and a strategic imperative for the buyer.

Strategy, Not Chance

Relying on luck that all will align on a date you predetermine is akin to setting sail without a compass and hoping that the earth is not flat. Strategic preparedness involves thorough market analysis, understanding potential buyers' cycles, and meticulous internal assessment. To get started, you can use well-known frameworks such as SWOT (Strengths, Weaknesses, Opportunities, Threats) and PESTEL (Political, Economic, Social, Technological, Environmental, Legal), combined with financial forecasting, which offer valuable insights into the external market and your internal readiness.

Remember to focus on this from a sophisticated buyer's perspective: why would they see value?

Running a business purely for personal income attracts a different buyer group than a business built for growth or scale.

What can you do?

Here are some of the actions you can take to improve your readiness.

Prepare an Exit Vision and Strategy Early

Start with Why. What is your exit vision and why? What will that enable you to do? What will be the impact on your family? Community, and so on?

Then, start crafting your personal and business exit strategies well ahead of your intended sale date or life event. Personal examples include understanding your wealth gap. What structures need to be implemented to minimize your taxes? Business examples include developing your management team and ensuring the company has best-in-class operations and profits.

Enhance Your Value Proposition

There are several ways to calculate the value of a business. A standard method used by private equity is:

Valuation = EBITDA x Multiple.

 

You know your adjusted EBITDA. Do you know where you would land on the multiple scale?

Your level of differentiation drives the Multiple. This can be like playing the child's game of chutes and ladders when you don't know what drives a Multiple down or up and are hoping for a good dice roll. Beyond financial health, consider what makes your business unique and whether it could easily be transferred into another organization without you being at the center. Examples include proprietary technology, customer relationships, or market positioning.

Build your Advisor Network

M&A is a complex field requiring specialized knowledge. Building and getting to know your team in advance helps you prepare technically and emotionally.

The minimum advisor team to get started includes:

  • Financial Advisor.
  • Accountants with Exit Experience.
  • Tax Advisor / Trust and Estate Attorney.
  • Experienced Exit Readiness Consultant / Coach.
  • M&A Advisor.
  • Corporate Attorney, and
  • M&A Attorney.

Understand your Market Cycles

Stay abreast of industry trends, economic cycles, and potential buyers' financial health. Tools like Google Alerts, industry reports, and financial news can be invaluable sources of information.

See my post on the different cycles and tipping points.

 

In conclusion, while the precise timing of a sale cannot be pinpointed with absolute certainty, being ready and having an acute understanding of the market and buyer cycles can tilt the scales in your favor. Many businesses sell because of a life-changing personal event; being prepared reduces the impact of a fire sale.

The goal is not to predict the future but to be thoroughly prepared for when the future arrives. In navigating the intricate dance of mergers and acquisitions, let strategy, not chance, be your guiding light.


What You Need To Know About Mature Companies Suddenly Revisiting Startup

Throughout their history, organizations progress through various phases and stages of the business cycle. What needs to be more widely understood is that they repeat just like the Economic Cycle. The founders or their successors find themselves experiencing emotions or behaviors that they do not expect to see. This article addresses the experience of an organization either completely going through or having important operations and investments going through the Next Era Startup phase.

The feeling stages within the return to the Next Era Startup phase are the same. They will go through feelings of butterflies, impatience, anxiety, and confidence and transition to a new business and leadership capabilities phase. We delve into the distinct behaviors exhibited and the actionable strategies required to progress seamlessly.

Organizations often transition into Middle Market businesses through other tipping points from Lower, Middle, and Upper Middle Markets. The National Center for The Middle Market defines the middle market as $10 million to $1 billion, with a Lower $10 million to $50 million, Middle $50 million to $150 million, and Upper as $150 million – $1 billion. Most of the nearly 200,000 Middle Market businesses fall in the Lower Middle Market classification.

The 'Butterflies' Phase (Take Two): Trepidation Mixed with Eagerness for Expansion

Signature Behaviors

A further iteration of the butterflies phase often occurs as a small business has survived the often-brutal transition into a middle market business. Its success drives the desire for new growth opportunities to support its established business and markets. Here, the management focuses on the bigger picture, contemplates strategic partnerships, and pursues expansion opportunities. As they enter this stage, the new opportunities create excitement and ‘butterflies’ and how they could achieve their now often bigger vision. A renewed focus returns and eagerness to grow, remembering the stall experienced during the last transition.

Decision Making

There is a bias toward maintaining momentum, quickly acting, and rushing to implement the next growth phase. While a business should be proud of achievements made, leadership is often hungry for further growth. This time around, there is initially a feeling of invulnerability; after all, entering the middle market is a significant feat.

Actionable Steps for Progress

Overcoming the butterflies in this stage requires:

  1. Set realistic expectations, as this phase’s skill and capability levels differ greatly from the previous.
  2. The sales approach must often evolve as the clients are larger and more sophisticated.
  3. Evaluate potential partnerships and collaborations in the context of mutual benefit and industry relevance.
  4. Strengthen communication channels with existing customers, foster loyalty, and explore opportunities to upsell.

Example: Business Consulting Company

Business Consulting, a high-performing consulting firm, had grown significantly, and now larger clients were coming to them. The firm was confident and exploring what was next, excitedly opening offices in new cities. Its prior approaches to selling and leveraging local reputation were not having the same impact in these new markets.

The ‘Impatience’ Phase (Take Two): The Drive for Scaling Up

Signature Behaviors

The second iteration of the impatience phase sees seasoned enterprises pressing for success with their growth investments. Pressure continues those leading the expansion activities; some are recent hires in new locations and have underestimated the time and resources it will take or the introduction of a new product not garnering the speed of adoption by the current customers. As the business attempts various activities to gain the desired momentum, increasing risks get taken to get things on track to the planned timeline.

Decision Making

The tension builds between holding fast and quickly trying things to have traction. Attention becomes dispersed and scattered. Franticness develops, and the ball often gets dropped because the infrastructure to support the business is still lagging. Decisions start to slow as frustration with the lack of momentum compared to their expectations.

Actionable Steps for Progress

To effectively make progress at this phase, businesses should:

  1. Develop a comprehensive growth blueprint that factors different adoption cycles.
  2. Keep focused on the source activities to generate revenue.
  3. Devote resources to optimizing sales processes and sales team capabilities and tools.

Example: Tech Solutions Company

Tech Solutions, a leading local IT service provider, realized that to significantly expand its market it would need to support additional cloud platforms. The expectation of doubling its revenue and having similar revenue per deal / customer as the traditional business. Frustration developed between the delivery and sales team about how long it was taking to get clients of similar size for this new service line without realizing that the service line was, in fact, a new business within the existing business.

The 'Anxiety' Phase (Take Two): Managing Risks and Doubts

Signature Behaviors

As with the first time around, the impatience phase develops into anxiousness for success. Fear that the growth venture might fail and concern such as whether the people driving it have the right capabilities develops.

Questioning whether it was the right city, product, or market occurs and why it has yet to succeed. Doubt increases about whether to send additional resources and whether they will send good after bad. Fears about damaging the company’s reputation and its success story build and concern about how competition will capitalize on the perceived failure.

Requests for discounts come from the sales team desperate to get some form of increase. Often the executives, the sales, and the marketing team widen their net into other markets; blame starts focusing on the product, marketing, or strategy as the cause of failure.

Approved budgeted spending often comes to its limits and requests further approval because prior spending is a sunk cost.

Decision Making

Decisions start to stall, pivots, reducing related expenses, and commitments are all considered, especially if the leadership needs to gain the experience or capability for launching the specific expansion investments in the recent past.

Decisions made at this time determine which path the growth investment takes. If the developing asset is good but resource-starved, it will stall and ultimately decline. If the investment was bad, it should be quickly closed to commence the next one. As the management team gains confidence, it will move to the next stage.

Actionable Steps for Progress

To navigate this anxiety, management should:

  1. Review the business case for the expansion. Is the issue the strategy, the timing, and time expectations, or is it the team? Were the assumptions right and the expectations realistic?
  2. Is the expansion a stretch? Jumping from a single office or location serving a state to opening up in a different country 5,000 miles away is, for many, high-risk.
  3. Make sure that the business infrastructure can support the expansion.
  4. Ensure the sales tools, process, and positioning are aligned for easy growth.
  5. ‘Act as if,’ persevere, and keep focused. Set a deadline for the expansion to start gathering traction.
  6. Manage the team’s stress levels and how they present themselves in front of the prospects. Ensure that they have support.
  7. Embrace iterative learning and experimentation for self-assessment and risk mitigation.
  8. Encourage cross-functional or cross-divisional collaboration and what concerns prevent them from succeeding.

Example: Specialized Manufacturing Company

The specialized engineering components manufacturer cautiously expanded into related industries through collaborations and joint ventures. This approach allowed them to harness their expertise for new markets without jeopardizing their core business. Even with this approach, they entered the ‘Anxious’ stage with each of these collaborations and joint ventures. Through their experience, they built a playbook to help future leaders and team members to educate and understand the critical reviews, assessments, and journey these will go on as they develop before they truly establish themselves, including when to withdraw from the initiative and how to do it without damaging the partner relationship.

The ‘Confidence’ Phase (Take Two): Sustaining Momentum Through Informed Decision-Making

Signature Behaviors

As the anxiousness of the prior stage wanes and confidence that the investments will work builds, the management team now considers how to develop and scale the growth expansion.

There can be some pressure from either the team or the management to recapture the growth perceived to have been missed as the growth investments took their time to mature. There is often a danger of short-termism.

Decision Making

What investments will create the desired growth can be sustained become the key decision discussions. Pressure by the team going through this phase for the first time often drives pressure to increase to gain significant profit, rewards, and bonuses.

Understanding what investments are required to support growth, revenue, and customer service is key.

These investments’ initial success can also strain the organization. Experienced operators understand that they need to review the organization for a while and understand what further investments are now made across the entire organization to sustain the now bigger business, its customers, staff, and facilities.

Actionable Steps for Progress

During this phase, businesses need to:

  1. Plan ahead of the growth and work with other departments to understand the impact on their functions as the development gains momentum.
  2. Grow or develop the organization to handle customer service as the next growth phase will cause some breakdowns.
  3. Recognize and celebrate accomplishments, fuel motivation, and protect the culture.

Example: Logistics Company

As it expanded its locations and services within its network and became confident about its success in these investments, an international logistics and supply chain provider understood that it would need to create a significant investment in its core capacity and infrastructure. Further increases in delivery capacity would be able to use this core for a decade.

Conclusion

The business is now well established, and the founders are proud of the company it has become. They can revisit and be surprised by going through the experiences and feelings they associated with when they started the business or observing them in their team.

By getting ahead of the business cycle, experienced operators can put plans, measures, and support in place to manage the feelings of butterflies, impatience, anxiety, and confidence that they or their team will experience and their potential to send them off track by the surprise of feeling that way.


From Lost To Proud: Mastering More Effective Business Growth

After successfully navigating the challenges of the Accelerated Growth phase, the business moves into the Future Growth phase. Firms in this phase are well-managed and have taken all the lessons the Accelerated Growth phase threw at them. The company is under control and the feeling ranges from proud to comfortable.

As with the prior blogs covering the previous phases and their component stages, we will delve into the associated behaviors, decision-making characteristics, and necessary actions to progress – the critical pieces for leaders looking to facilitate sustainable growth.

The management team at this phase is disciplined in their investments without overly stressing the organization. As the company business travels through this stage, it eventually comes a further tipping point that can take it into the next iteration of the Business Growth Cycle and a further Startup like phase as the company calibrates to a new level of commercial and organizational sophistication.

Proud: Success Hard Fought

Being proud in the context of the Future Growth phase refers to the stage of self-satisfaction derived from business success and the challenges that shaped it, the owners, and the management team to get here. It is now achieving targets, often exceeding expectations, and tackling major milestones. This peak of accomplishment can foster a positive organizational culture, boost motivation, and enhance a company’s reputation.

However, this feeling should be handled carefully. Overconfidence and pride can lead to complacency, arrogance, or reckless decision-making, potentially undoing hard-earned progress.

Businesses at this stage are the most valuable compared to others. Aligned buyers respect the management team’s achievement, and the business assets they have built that will drive future revenue.

Behavior: Confidence and Forward-looking

During this stage, the owner and management team are forward-looking. How can they continue to grow but in a well-managed manner?

The behaviors are confident, calm, and controlled or disciplined. They are effectively at a higher level than the Good Times and Relaxed stages of the Incremental Growth phase. This was imagined with the vision that led to the investment and the Accelerated Growth phase journey.

Having weathered the earlier stages of the Business Growth Cycle, companies at this stage possess an enhanced organizational capability and a clear comprehension of their growth drivers.

Decision Making: Reflective and Rational

A strong commercial context drives the decisions at the stage and with an understanding of the impact on Culture. The business grows and progresses to the next phase of scale.

Emphasis is on disciplined, measured growth, and as the business grows and continues, it reaches the final tipping point of the cycle where the leadership asks what’s next. Do they try and stay at this point or look to start the next growth cycle?

Decisions are made calmly, confidently, and implemented in a controlled manner. They understand the level of risk that they are willing to take and what they do not.

Companies that are clear about why they are doing things continually invest in staff training, operational efficiencies, new technology, and product innovation to spur further growth are the most successful and desirable.

Action to Progress

Some measures can be taken to move through this stage and phase successfully:

  1. Understand the next generation of owners’ vision.
  2. Prepare the Culture for future growth. If the organization doubled in headcount, how can it be managed and stay true to its intent?
  3. Ensure that the skills are in place to support the next growth cycle.
  4. Ensure that the management information, reporting, and decision-making can handle a doubling of revenue without breaking or being unnecessarily onerous or cumbersome.
  5. Understand the business’s core assets and how it can further support its customer’s needs.
  6. Explore whether entering new markets, channels, or territories and the skills, resources, and capital required to achieve it successfully without driving the main business into the Accelerated Growth phase again too quickly.

The fundamental mistake that can be made at this stage is ‘if it ain’t broke, don’t fix it.’ Counter-intuitively, this is a growth phase where purposeful improvement becomes critical.

Services Business

A successful services business successfully navigated the Accelerated Growth phase. Its Culture had matured, and strong profits returned. Its client base was growing, and the nature of the assignments was significantly more complex than five years prior. Their new opportunities came from different states, countries, and industries.

The problem in front of management was where to focus next. Servicing these clients successfully could mean their employees would spend significantly more time away from home, on planes, and be less productive.

Their first decision was to initially develop and evolve their product to deliver it with a strong remote element, embracing technology until it was essential to be in person.

The second decision was to build their internal training and mentoring so that they could scale and build a small number of key satellite offices. The technology allowed the local teams to still be in the room, observing, learning, and developing their skills from their mentors.

The third decision was to focus on managing Culture in a digital-first or high-digital delivery environment to stay true to their core values and the lack of personal connection and informal discussions that being out of immediate sight would create.

Conclusion

In conclusion, the mastery of the Future Growth phase symbolizes the success of perseverance and strategic adaptability. It’s a pause in the marathon, an opportunity for celebration, but it is not the endpoint. The challenge for businesses is to turn this culmination into a springboard for continual growth and innovation into the next iteration of the Business Growth Cycle.

With a vision in mind and strategy in place, the business landscape changes from being a battlefield to a chessboard. The moves, guided by the lessons learned from past experiences, prepare you for the shifts in the business landscape. Agility and foresight will be your pillars of success as you decide your next move: to remain in power or initiate the next cycle of growth. Either way, the guiding light remains resilience, readiness to adapt, and a commitment to a culture of continual learning and innovation.


The Hidden Pitfalls In Accelerated Growth You'll Actually Experience

Following on from the tipping point at the Lottery stage of the Incremental Growth phase, the investments made drive the rapid expansion that creates the Accelerated Growth phase.

After the great feelings from the Relaxed and Lottery stages, the feelings felt during this rapid growth are primarily surprise, both good surprise and bad. Each section will delve into the associated behaviors, decision-making tendencies, and actions required for progression.

Frustrated: The First Surprise

The bill has come due. All investments previously deferred must now be paid.  The cash flow impact builds, and there is a change in feeling good from having increased revenue to feeling bad as now the company must bring in that revenue to pay the bills.

Pressure and frustration build! Revenue is rising quickly, but not quite as fast as planned. Some of the infrastructure is struggling, and some clients complain about their experience.

When the owner or leader arrives, a line of people is waiting to discuss issues which need resolution.

The frustration deepens as the challenges continue, and the business strain is often taken home.

The company is now starting to run the leadership more than they run the company.

Behavior: Failing Communication

The frustration leads to impatience, irritation, and a tendency to blame others. The communications tend to take on a different tone than during the last phase. The culture begins to turn, and a culture of control starts to germinate. This starts with the owner or leadership, quickly moving throughout the organization. New hires rapidly adopt this developing culture.

Collaboration reduces as team cohesion evaporates. The team focuses on what they must do to avoid being blamed.

Decision Making: Slows Down

In the face of frustration, decision-making starts as reactive and hasty, primarily to eliminate the line of upwardly delegated problems presenting themselves each day. Bigger decisions become ‘leave it with me’ or ‘I will get back to you,’ which becomes the order of the day unless a decision must be made immediately.

Unless it is broken and needs repair, decisions become delayed as there is seldom enough time, energy, or desire to evaluate the problem properly and make it. Confidence in the business and the team can be eroded.

Action to Progress:

To dampen the frustration and reduce its impact, leaders can:

  1. Understand the business cycle and plan to get ahead of it.
  2. Communicate with the team and explain the business cycle.
  3. Acknowledge the impact of growth and the change it is forcing.
  4. Agree on the expectations on how to manage this stage of the Accelerated Growth phase.
  5. Reconnect to the vision.
  6. Acknowledge the cultural impact and the behaviors that have developed.

Example: Manufacturing Business

A manufacturing company that continued to experience growing demand for a new product line faced frustration when its production facilities struggled to meet deadlines with high levels of substandard products.

The management team meetings became one large argument, with the sales manager blaming the delivery manager, who accused the production manager, and the production manager blaming the sales manager for unrealistic promises. The cycle went on day in and day out.

Stressed: Closed Doors

The stressed stage comes on the heels of being Frustrated. Growth continues either faster or slower than expected. The business continues to struggle with the impact. Frequently money is thrown at the problem of getting goods and services out to the customer or client.

Revenue continues to rise, yet profitability rapidly declines and often moves to loss. Staff are feeling overworked, working harder and less efficient.

Behavior: Heads Down, Doors Closed

During this stage of the Accelerated Growth phase, the behaviors initially exhibited in the Frustration stage amplify.

Employees continue to delegate decisions and issues upward. The owners and leaders feel like the whole world is pressing down on their shoulders, and loneliness sets in.

Blame continues and gets worse with decisions taking longer to be made, and meeting avoidance starts to develop. Employees keep their heads down and avoid interactions with the owner, not wanting to be chewed out. Where can people go into an office or a conference room and the door gets closed with the implication of do not disturb!

Sometimes, the owner or leadership tries to work from home to avoid all face-to-face interaction with the team.

Productivity and focus decrease, and things take an increasing amount of time. Customer promises are broken, customer issues continue, and staff sickness increases.

Decision Making: Avoided

The increasing stress levels contribute to analysis paralysis or general decision-making avoidance.

Decisions are often poor, and exacerbated by decreased focus and a negativity bias, remembering that the decisions to drive the current growth and revenue levels have not worked.

Individual leaders and employees are protecting and looking after themselves, avoiding anything that could come back and bite them and pushing nearly every decision to the ownership.

When decisions have been made and have not worked out exactly as people expected, blame and covering their backside is the order of the day. The owner and leadership often start taking tasks back as it is easier to do it themselves than handle all the hassles.

Action to Progress:

To manage the stress stage effectively, leaders need to:

  1. Prioritize self-care, including exercise and sleep.
  2. Stay connected to the business. There is a tendency to want to distance oneself from the company’s problems.
  3. Understand that it is a stage of growth that can be managed through.
  4. Reconnect to the ‘Why’ behind the vision and prepare for getting business through this period of significant change.
  5. Review the organizational structure and what people are responsible for. Understand where overwork is, and where automation and transformation can relieve it.
  6. Manage the urge to do it all.

Example: Manufacturing Business

Returning to the manufacturing business introduced in the Frustrated stage. The management team has moved to being stressed. Every member hated attending the daily meetings and came ready for the fight with evidence of the other team members’ failures.

When not in the meeting, they retreated into their offices, avoided phone calls, and asked for emails they could review or use to push a point. The sales manager occasionally went out with their salespeople to clients, often to take the heat for the issues of delayed delivery or mistakes. The response was typically to push an urgent order with an expectation of delivery the next day and pressure the owner to agree to push it through to save the customer regardless of what the production had planned and the delivery by courier.

Every day was stressful, and the management team had developed a pattern. The Production manager expected to get a customer urgent job. The owner could see that they were losing money on these orders but could not see how to address it after all these customers had helped them to grow and scale to this size.

Disillusioned: When Will This End

As the Stress increases, there is a point where the stage transitions to that of Disillusioned. The owner would happily sell the business if they could get a good price to relieve the Stress and pressure.

Business owners at this stage often ask, how did the business get here? 2 years ago, the business had made $15 million, with $2 million net profit, one year ago, it made $16 million and broke even. This year, it made $18 million, and has lost $1 million net.

Why aren’t people doing their jobs, always sick or leaving? Labor relations are poor, and why do accidents happen now?

The focus moves to reducing costs, considering if the team can do more, and occasionally responding to the many emails asking them if they are interested in selling.

Behavior: Head in Their Hands

The gap between the original expectations and reality continues to widen as the behavior has developed into cynicism, detachment, and a lack of enthusiasm. For some, a feeling of despair emerges.

Unless very urgent, decisions take six-plus months, if at all, to be made. The owner and leadership would do anything else other than make a decision. Sometimes they can be found fixing the printer, the first machine in the shop, or giving unsolicited advice on how to make something on the production line. This helps them feel like they are adding value to the business as the business feels like it is running them, and they have a sense of having to do it all themselves.

Staff leave, and the culture is initially negative but can quickly turn toxic if not addressed.

The behavior is completely reactionary and often likened to playing whack-a-mole. Communication is cautious and formal, often run through HR before sending.

Decision Making: Stalled

When disillusioned, leaders exhibit a pessimistic outlook and are highly risk averse and indecisive. They often look back to the Good Times or Relaxed stages, wishing they were back there.

There is also increasing pressure to grow further and to change. Concerned about making mistakes, the indecisiveness progresses them to the next stage: Research, where they look for utopian solutions to fix all the problems and challenges.

Action to Progress:

While this is a normal stage, the time the owners, leadership, and the business stay can be managed. In addition to the actions highlighted in the prior stages of the Accelerated Growth phase, management can:

  1. Acknowledge the situation and mood inside the business without blame.
  2. Redesign and implement the next phase of culture to the future of the business, its values, or how they are expressed and the behaviors underpinning them.
  3. Manage the staff transition for those that do not want to change to the positive culture is implemented, and resistance is pushed through.
  4. Look to restructure the business, what needs to be changed, what roles are no longer applicable, and what can be simplified and automated.

Example: Manufacturing Business

Returning to the manufacturing business introduced in the Frustrated stage. The management team has moved beyond stressed, to completely disillusioned. They are all looking for other jobs, but the management of the business has a toxic reputation. There was high turnover within the sales team, and sickouts were increasing with the delivery and production staff.

The business received lowball offers to buy them from their competitors, circling like a group of vultures.

The management team, faced with their reality, decided to stop arguing with each other and understand how they could work better together and bring the business back to life.

They agreed to get some help to help them work collaboratively again. After understanding what was driving each area of the business, they reset their context to change the expectations they set with their customers – the previous one was the speed of order to delivery, understanding that the production was about maximizing efficiency, and that meant that orders took longer than promised by the sale team. Finally, they worked with the delivery team to plan the routes more closely with the drivers’ operations.

This allowed them to enter the lost stage with a sense of accomplishment.

Lost: Research Stall

The Lost stage is so-called because the organization starts to do something about moving the business forward. As it enters disillusioned and starts looking for why the company is not working as it once did, it can get absorbed with research, similar to analysis paralysis. The leaders explore how to dig themselves out.

This research is not logical when conducted with Stress, disillusionment, and despair. It can appear to the staff that it is another of the owner's or leadership team's great ideas, like throwing mud against a wall.

This stage of the Accelerated Growth phase is a pivotal turning point as to whether the business will move into the Future Growth phase, the Plateau, or the company enters the Decline phase.

Behavior: Feeling Lost

As they enter this stage, the team often lacks clarity regarding future strategy and direction. They are working on the problem but focused on the day's issues. It is initially hard for them to recall what it was like to look toward and plan for the future as they did earlier.

Their behavior can be one of trial and error, hoping that they have found the solution and it will reignite the stalled business and get it back into profitability.

As the solution is understood, the lack of whacking moles daily can make the team feel lost as it had become an all-consuming behavior, and the larger the number of moles whacked, the more a sense of accomplishment was felt.

Decision Making: Trial and Error

Initially, decisions are mostly deferred at this stage, hoping the issues will resolve themselves.

Once the choice has been made to change the situation, research starts, but it is often from more emotive decisions that are made with the hope of solving the problem. As these fail, it can feel like there is a repeating cycle of trial and error as they address one specific issue at a time and have not addressed the causes of the many particular issues.

Action to Progress:

To regain a sense of direction, leaders can:

  1. Reconnect to why the business was created and its importance to the founder.
  2. Review the vision that drove the investments during the Lottery phase. Can it be achieved?
  3. Review what organizational structure changes are required to achieve the planned growth and how many steps will it take.
  4. Understand the organizations capacity, where it has too much and where it has too little, and what it will be at the vision.
  5. Assess the Management and Leadership capabilities and where they can be enhanced through training or where a gap needs recruitment.
  6. If not addressed in prior stages, redesign, evolve, or realign the organizational culture and proactively manage it.

Example: Manufacturing Business

The team has become more comfortable with their agreements and a new working method. They no longer spend nearly all their time and energy dealing with the fallout and arguments between them.

Initially, they felt lost and a little uncomfortable. What would they do each day? Now having the energy to undertake further research to gain the market share they had expected before becoming completely internally focused.

By researching and building their plans from where they are, which they now know, they were able to see how they could achieve the vision that launched all the prior investments. They were able to build a plan that showed the sequence of steps required to build out the business’s capacity and fill it up without further stressing it or creating the bottlenecks that had previously existed.

Conclusion

The Accelerated Growth phase can be a roller coaster if the organization is well funded. For most, it can be an unpleasant experience as the organization changes. Not being aware of how this phase has the opposite impact to the last phase as the revenue grows has surprised many business owners and their leadership teams.

Leaders can forge a path toward continued success and growth by acknowledging, confronting, and getting ahead of these challenges so that they can quickly move through them as they can come up.