September 21st, 2011 | Published in Uncategorized
Construction businesses have shown much tenacity to endure industry ups and downs, fits and starts, slow-goings, and increased competition. At times, it may have seemed absurd to think of growing a business when simple survival was top of mind. But the key to growth and success is anticipating change, preparing for the future, and knowing what to expect.
An article, “Recognize and Manage The 5 Stages Of Small Business Growth,” was recently published online at American Express Open Forum. And although businesses have different goals, methods, processes, and management styles, but they face common problems that happen at similar stages in their growth.
Author Tom Harnish explains that: “Understanding the stages of small business growth and inherent problems can help you assess where you are in the growth pattern, and help you anticipate what’s going to be required to succeed.” Owners, for example, will have to spend an extraordinary amount of time during the initial start-up period, and then have to learn to begin delegating work and authority as the company grows.
An excerpt from the full article follows:
1. Existence stage. During the start-up phase, to move from an idea to a business takes customers, cash and stamina. You do everything. You’re the primary source of capital and energy, and if you have help, you supervise them directly.
2. Survival stage. If you make it through the start-up and have proven you have a product that people can and will buy, then survival becomes your primary concern. You have to be able to make enough money to cover your costs. And you need to be able to finance growth. Cash forecasting is critical, and owners must be able and willing to delegate responsibility, to avoid the common hazard of ‘growing broke.’
3. Success stage. Once a company is economically healthy and is generating average or better profits to ensure success, the company can stay at this stage indefinitely. Financial management, organization development, and delegation to a growing management team require more than seat-of-the pants leadership. If you decide to grow your company you need to focus on using cash and borrowing power to finance the expansion.
4. Takeoff stage. If you opt to grow, delegation and financing will become your key problems. This is a pivotal time. You need to decide if you want to become a big business or sell the company at a significant profit.
5. Maturity stage. Controlling your substantial financial resources will be one your biggest challenges if you manage to create a mature company—you’ll probably have a whole division trying to do just that. In a rapidly changing world, flexibility and agility are crucial. Knowing what challenges you’re likely to face in the years ahead can help you mitigate their impact.
In closing, it’s clear that investing in technology and small construction business software would be a worthwhile consideration at any stage. Construction management software can help automate processes, save time, increase productivity, simplify workflow, and much more that can positively impact the bottom line. To help ensure the maximum return on your investment, do the research required. Evaluate your needs now and what you anticipate a few steps ahead down various paths.
How have your technology needs changed as your business evolved and grew? Did you have to change systems or software? Or did you have a solution that expanded with your needs?