Growth Characteristics for Business
Middle Market - Growth Challenge
 The challenges for middle market organisations usually begin when revenues go past $1m per annum then $10m per annum and finally around the $40m, when jeans and sneakers are no longer appropriate to see clients in. The sole proprietor has moved to managing people and building an asset with processes, governance and middle management and moving toward formal business structures and finally formal governance structures. Each level brings on a new level of complexity, risk, value and stress.
Typical Growth Characteristics
Typically, small businesses experience the following characteristics as they start the journey: - A core product or service on which the business has been built
- A certain specialization and penetration into a core market
- Entrepreneurial founders still heavily involved in the business, with a strong technical or service focus
- Shortage of resources (people and cash) to manage the growth
- Informal decision making processes and structures
- As-hoc strategies and leadership, control firmly with the founders
- Strong team environment and culture, with staff multi tasking in their roles
- Poor or non existent financial reporting
As these growth companies mature, they move to more complex business needs and requirements - Board of directors, formal governance structures become a neccessity
- Capital structures become more complex and need active management and planning
- Significantly increased administration around staff, tax and cash management
- Formal processes for everything, from expense claims to travel and client delivery
- Expensive senior management structures, as business middle managers are required
Undestand the growth characteristics of growing organizations and you will be better places to plan and build strategies to meet the growth challenges that result head on. Achieving critical mass | Building sustainable profitability | Growth challenges
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