3. Early Growth

So the skeptics have been proven wrong. Your product has proven successful and is selling. Customers have tried your services and come back for more. The initially inexperienced managerial team has now gotten its feet wet and gained some valuable expertise. Although you may have had a few setbacks along the way, marketing and production are up and running, and you are focusing 24/7 on growing sales revenues.

This is not the time to head off for a long-deserved vacation to Hawaii. Your company is poised for a period of rapid growth. Tasks that need to be accomplished in the early growth stage include:

• Achieving significant market penetration
• Building your sales team and distribution system
• Increasing productivity and reducing unit costs on goods sold
• Perfecting your marketing techniques and methods
• Up-grading the business plan (again) for the purpose of gaining additional financing

The 21st century marketplace is so hyper-competitive and fast-changing that if you are not moving forward, you are moving backwards. It is tempting to think you are doing well and you can “bootstrap it” in this phase by generating your own cash flow. That might be possible in some situations, but in most cases this attitude will probably hold you back. On the next page, you’ll see why.