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Four Levels of Small Business Success.

At every level of small business success, business leaders face big challenges. The challenges facing an early stage CEO are far apart from those faced by CEOs in established or mature businesses.

For 30+years as a brand strategy and development consultant, I’ve worked with dozens of small business leaders in diverse markets and industries. I’ve seen first hand the big challenges facing small business leaders in companies of every size. Yet in all this diversity of experience, I’ve come to realize there are common trends in the challenges faced by CEOs at each level of their growth.

Of course, the big challenge for all small business leaders is growth–elevating from the current state to a higher one.

At each level of business growth, there are certain areas of strategic focus that must be properly executed for the business to elevate to the next level.

Growing an enterprise from its early stage into one that is firmly established in today’s marketplace requires extreme talent, focus, creativity, innovation, resourcefulness, and agility. Disruption is now the normal state. Leaders and teams face unforgiving challenges as they navigate through the waters of constant market change.

Small business CEOs must keep in mind they'll never control the outward whims of the 21st century marketplace.

All they are in control of is their individual and collective mindset to constantly create more value for people. When their true focus is on doing that, rather that counting transactions in three-month increments, their bigger futures will take care of itself.

That said, let me share what I have come to realize are the core challenges facing small business CEOs at four levels of growth. If you’re an early stage entrepreneur with a forward thinking mindset, this outline should give you a good idea of what’s in store for you along your success journey.

Level I: Early Struggle Stage

Less than $1 million in annual revenue

There are over two million businesses in the USA in this category. Early Struggle businesses have between 1-10 employees with annual revenues of less than $1million. Typically, the founder is the CEO. The founder’s vision is the basis of why the business exists and how it will bring value to the marketplace. At this level, the value proposition has passed the test of marketplace acceptance and there is an established sales and distribution operation.

The biggest growth challenge for early struggle stage businesses is enough financial resources to invest in building the marketing and customer service functions. It’s essential for early struggle stage CEOs to create strategies that bake the marketing into the value they bring to customers. Systematically delivering on the promises made to higher value customers is the only way to get to the next stage.

Level II: The Emerging Growth Business

$1 million - $5 million in annual revenue

There are roughly one million+ businesses in the USA operating at this level. Typically they have 10-25 employees with annual revenues up to $ 5million. For CEOs at this level, developing business strategy that maps out the big picture vision for how the business will continue to grow and evolve to higher levels is the main focus.

Building and trusting the team, letting go of working in the business and focusing efforts working on the business, and attracting top talent can be a daunting challenge for many entrepreneur/ founder CEOs running an emerging growth business. My marketing communication agency operated at this level for nearly twenty years. I know first-hand the importance and difficulty of working on your business rather than in it.

Level III: The Growth Business

$5 million - $20 million in annual revenue

A vibrant, self-managing culture is what drives the success of these established growth businesses. There are more than 200,000 of them in the USA at this level. The established business has expanded to between 25 and 100 employees and annual sales from $5 million to $20 million.

Enlightened CEOs at this level focus their creative energies on the continuing challenge of innovating more value for customers and building and attracting top performing managers who know happy employees make happy customers who make happy shareholders. In an unforgiving marketplace, it can be most challenging to establish core values and a purpose-driven mission shared and valued by everyone in the organization from top to bottom.

Level IV: The Established Business

$20 million - $50 million in annual revenue

An enterprise at this mature level is fully established with sophisticated management systems in place enjoying sustained and profitable annual revenue between $20 million and $50 million.

There are 100 to 250 employees in roughly 60,000 companies at this level across the USA. Typically this is where the founder’s vision is still mostly intact but the founder may no longer be the CEO as more sophisticated management processes, systems and layers are required to effectively run a well-oiled machine of this scale..

The big challenge for CEOs at this level is to constantly monitor the relevance of its value to legacy customers as the enterprise seeks to continue to enjoy a leadership position with new customers. This is the stage where the business enters the big leagues of corporate player status. The success factor for this stage is leadership development–continuing to foster innovation and competitive advantage for a new generation of customers.


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