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By Susanna Baird
| October 18, 2017
Idea? Check! Business space? Check! Customers? Check! Success and sustainability? Not so fast.
In the 1980s, Harvard Business Review introduced a five-stage model of small business growth. First, business owners clear Stage One: Existence. Owners can coast through Stage One on euphoria and a good idea alone. When they arrive at Stage Two: Survival, it then becomes about managing — time, product, customers and money — as they attempt to hang on long enough to see a payoff at Stage Three: Success.
“Success is contingent on several key factors, including product quality and a strategic growth plan,” says Ginger Siegel, head of North America Small Business, Mastercard. “Small businesses must stay focused on these components to ensure survival in the marketplace.”
How do you take a small business from surviving to growing? It’s an important question considering there are more than 600,000 small businesses in Massachusetts and they employ almost 1.5 million people — roughly half of the state’s entire private workforce. So yes, small businesses matter. A lot.
If you own one, here’s a tip: Never stop learning.
And, from the experts, here are a few more:
1. Educate and strategize
If you own a small business, it’s not enough to just make a to-do list. You need to prioritize your tasks and attach desired outcomes to each item. Does it require a new hire or a freelance consultant? Will this impact my taxes? Is there a specific business-friendly credit card that makes the most sense for my small business? Robert Goldberg, executive director of Cambridge College’s MBA program, tells the story of one local business owner who took the time to educate and strategize, and ultimately moved in an unexpected direction.
“We worked recently with a food store, tiny little store, very niche, wonderful business model,” says Goldberg. They were ready to grow, and the obvious next step was to stretch into an empty space next door. But after thorough consideration, they decided to expand the business without expanding its footprint. For this particular business, the addition of catering services was the most effective strategy to grow its offerings and customer base in a natural and authentic way.
Learning can be done in many ways, from conversations with more experienced business owners to college extension courses. The Boston area provides ample opportunities for both.
2. Retain and attract
Ok, so you’ve got a strategy and a to-do list. Great. To move forward, your business needs to retain current customers, figure out new products and services to encourage additional spending, and, of course, continue to attract new customers. And in case you haven’t noticed, reaching a new audience in this world of social media domination is a multifaceted undertaking.
“One advantage small businesses have over larger institutions is that they can really collect personalized data on their customers and pivot quickly to meet those needs,” says Bonin Bough, a top marketing executive. “Messaging technology will be changing the ways businesses interact with their customers and, if done right, will allow the creation of products and services that adjust to what the consumer needs actually are.”
3. Invest and expand
You’ve got a strategy, you’re acting on your list, and you’re building and retaining your audience. But it’s still not enough. Once you figure out what’s next, you need to fund it, whether it’s a new product or service, or building on what you’ve already established. Growing requires investing.
“There are a variety of available resources you can turn to for lending advice, guidance, and support: family members, friends, your professional network, financial experts, small business advocates, online content, and more,” said Kevin Kelly, Northeast Division executive for Bank of America Small Business. “Take advantage of this vast well of knowledge.”
“As an entrepreneur, you may rely on a variety of sources for capital – such as banks, family, personal savings or even angel investors,” said Kelly. “Regardless of the financing sources you tap or the stage of your business, securing and accessing capital is likely to play a critical role as you plan for future growth.”