Second-Stage Businesses Have Unique Needs

Businesses that have navigated successfully the waters of identifying a viable market and product and that are no longer concerned on a day-to-day basis simply with survival, are classified as second-stage businesses. These businesses have special needs, unique from those of start-ups and large corporations. The leaders of these companies often find that their businesses are either stretched to the limit due to increasing sales that require perpetual increases in people, inventory, space and financing , or that they have reached a plateau and cannot do anything to change the status quo.

The challenges second-stage businesses face are no longer simply about survival. These companies are generating revenues of $2.5 to $50 million annually, but are facing organizational issues that must be considered if growth is to continue. Second-stage businesses frequently face some or all of the following issues:

• People in different parts of the organization are unaware of what others in the organization are doing.
  
  
• Many employees don’t understand the organization’s ultimate goals, and may even be inadvertently working against such goals.
  
  
• A rapid growth in sales may precipitate a decline in product quality.
  
  
• Employee turnover may increase due to increased organizational conflict and stress.
  
  
• Leadership often finds itself performing operational tasks that others really should be handling.
  
  
• Leadership finds itself daily without enough time to complete their workload, much less focus on planning for the future.
  
  
• Lack of organizational infrastructure causes loss of files and paperwork, creating confusion and embarrassment.
  
  
• Computer systems overwhelmed by growth may crash frequently, hindering the employees’ ability to function.
  
  
• Meetings often accomplish little and are seen as a waste of time by many.
  

Second-stage business leaders often find that the very qualities and skills that helped them survive in the start-up stage may no longer be sufficient and are potentially a liability to sustained, long-term growth. In order to move past survival and into sustained and enduring growth, second-stage leaders have to transition their businesses into a professionally managed firm, while still maintaining the entrepreneurial creativity that drove the company’s original success.

Second-stage businesses are an extremely important component of today’s economy. According to YourEconomy.org, second-stage businesses are only 13.4% of the total business population in the Kansas City Metropolitan area, but supply 39.2% of the area’s employment. Knowing how important second-stage businesses are and the unique risks they face, the University of Missouri at Kansas City’s Small Business and Technology Development Center has created a program to specifically address the needs of second-stage business leaders.

The Growth Business Strategies program is the first in a series of programming being developed to meet the needs of second-stage entrepreneurs. “There are many great resources out there to help out brand new businesses, and there are numerous high-dollar consultants and training companies providing what large corporations need. The second-stage business leader tends to fall through the cracks,” according to Diane Scott, professional development program manager at UMKC’s SBTDC. The Growth Business Strategies program is designed to give the key leaders of second-stage companies the skills necessary to transition their companies into professionally managed ventures with the appropriate organizational structures in place to cultivate further growth, without creating innovation crushing bureaucracies.

The time of second-stage leaders is in high demand. Simultaneously, growth business leaders need dedicated time to work on their businesses, not just in them. The Growth Business Strategies course format is specifically developed to limit time away from the business, while simultaneously giving leaders focused time to grow the skills needed to further develop their companies. The program is presented in three monthly modules on Fridays and Saturdays at the Elms Resort and Spa in Excelsior Springs, MO (45 minutes from downtown Kansas City). The four weeks between modules allow students the opportunity to apply new skills and work on a plan for the strategic growth of their companies.

The program covers all the areas proven to challenge second-stage businesses from planning and budgeting to operational controls and organizational culture change. ABMI’s own Dan LoIacono will teach the session on Funding a Growing Venture. Second-stage leaders will get a chance to apply their new skills in a competitive and rigorous simulation of a second-stage venture.

Due to LoIacono’s association with the program, UMKC’s SBTDC is offering a 25% discount to leaders who learned of the program through ABMI. To receive the discount, applicants just need to refer to ABMI on the application. To view an informative flier on the Growth Business Strategies program click here. To download a program application click here. Applications must be received by August 1st and space is limited. For more information on this or other programs for second-stage businesses go to UMKC’s SBTDC’s site at: http://www.entrepreneurship.bloch.umkc.edu/sbtdc/secondStage.aspx