Growth Advisory

It is no secret that small enterprises are the key to job formation and that most new jobs have been created by small firms (profit and not-for-profit) in the United States. It is also true that within five years most new enterprises fail. Related to these two facts is the third fact that most small businesses that do not fail also do not grow. In fact, it is the rare group that grows to 100 employees or more. The growth cut off actually is well below 100 employees.

The reason for this situation is that most small firms are set to handle a specialized product or provide a certain service that is narrowly defined and locally focused. Owners work hard to survive. This historical experience has in fact changed somewhat with the growth of the internet and web based marketing. While most every small business has a web site these days, that does not alone solve this limitation of local focus because internet marketing is so dynamic that it is hard to stay on top of it by a small business. Most small enterprise web sites remain out of date and fall short of realizing the possible leverage in the market.

The ageless approach of market segmentation and strategic market development remains as critical or more in the internet age. This is a fundamental to developing a growth plan. Such analysis is valuable whether the implementation is done through organic growth or through acquisition. Because the discipline of growth requires an objective and clear perspective, it is rarely done successfully within the context of a smaller firm. Usually time is too limited, resources too few and management focus is very narrowly directed at immediate results, so that many small firms just are not staffed for this to happen effectively. Further, it is the case that many West Michigan companies heavily rely on the growth of a few existing customers for their own growth. This, so-called “derived demand”, can have the effect of blinding businesses to growth opportunities in related markets.

Our approach to this is to help management create a growth strategy developed through an understanding of their basic business and finding related opportunities within the resource capability of the client. Sometimes, the Collaboration Center can provide interim support on a cost effective to get the market development plan and strategies underway until they create a critical mass that can support itself.

If you are interested in this topic please contact us to receive our white papers entitled:

  • Why do most small business succeed in many things but growth?
  • How your customer focus can restrict your growth.

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