In Part One I talked about how a business needs to go from zero to $1m in the eyes of Michael Masterton. This is infancy in the lifecycle of a business.
In infancy, the focus was developing your Optimal Selling Strategy by understanding your marketing, testing different things, and creating a unique selling proposition. It was also about adding as many new clients as possible.
Many businesses stall in infancy and become victims of their own success. The owners may reach a point where they can make a good living from the business. The danger of this is that unless things change, they will stagnate. (95% of businesses stay smaller than $1m turnover per annum).
Here I talk about the next stage – childhood, in which a business goes from $1m to $10m.
“Childhood” is about changing gears and adding new products (even at the risk of cannibalising your existing products).
At this stage of the business, here are some points to note:
* Add new ‘front end’ products
* Innovate – look for improvements to existing products – not revolutionary new products (originality is overrated)
* Add many products and ‘let the market decide’ which will work
* Add backend products that you can sell to your existing clients.
* Aim for speed, not perfection
* Don’t jump categories – make changes to existing products that are one degree removed.
* Don’t try to make huge leaps or change the selling channel.
Most importantly, acknowledge you need to grow personally to handle and lead the rapid growth of the company.
This is most likely to be the stage at which your business decides to seek capital. Having proven its business, it can use the capital to grow the business.
Critically, this is the stage at which your business is the most attractive to an investor.
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