In our last article we talked about the needs and challenges of a medium sized business. If you have not already read it you can read Part 2 here.
Stage 2: systems (25-500 employees depending on industry)
Somewhere between 25 to 50 employees and millions of dollars in annual gross sales the business begins to transition into a Stage 2 business. Sales are good, there are more employees to do the work, and the business has some funds available to use to grow their business. For the owner things have changed. He/she no longer knows everyone in the company personally and intimately as they did before. They are no longer able to personally intervene and fix what is needed in every situation. They have become a medium sized business.
For a medium sized business sales and marketing are still important, but it is impossible to become a medium sized business without already being successful at these two. Sales and marketing must continue and adapt to new changes and challenges, but now there is a bigger need.
The biggest need in making the transition to a medium sized business is systems. The owner can no longer control everything personally, but the same (or higher) standards of customer service and product quality still must be maintained. This is done through proper systems. Systems ensure the customer always receives the same value they have always received.
The challenge for the owner is transitioning from a fast hands-on company to one where the employees follow the systems and buy into the benefits of having systems. Many entrepreneurs are not naturally good at building systems. The skill sets that allowed them to succeed at building their business now puts a ceiling on their success. In order to grow they have to either change (and that can be really hard) or they have to hire someone who is good at building systems. It is a different skill set needed. However, as systems are built the good business owner is able to turn loose of more parts of their business and spend their time on the 10% that is most profitable and has the greatest influence on the business. They can rest in knowing when they land a big contract their systems will ensure the customer is satisfied.
Another challenge is being able to expand into new areas, whether those be geographic or new product areas. They no longer have to be content chasing the low hanging fruit now they must move up into the sweeter fruit higher up the tree. With this move comes increased competition from bigger businesses. They must figure out how they can expand without getting crushed.
The medium sized business has many advantages. They can still move fairly quickly, although there are not as nimble as they were as a small business. They now have a customer base and a reputation to build on. They have a track record of success. They also have some cash and resources to use to grow. They have a staff to help, and they are beginning to build a collective “database” of industry knowledge.
The opportunity medium sized businesses must pursue is to take over new territory. They have the opportunity to expand through their better systems, better employees, and better finances. They should be able to move faster into new areas as the market changes. There is not a lot of bureaucracy so they can change directions faster. They are not tied into old ways of doing things so it allows them to adapt and improve.
The focus needs to be on building systems allowing the company to grow bigger than the owner can do on their own. Systems make things easier and/or faster. It allows a less skilled employee to do the same job or it allows an equally skilled worker to do a better job. All of these systems provide the customer with what they want and this allows the business to grow.
In order to move to the next level and become a big business they must improve their systems and hire better people in order to grow their territory and customer base. Then they are becoming a big business.
Need – systems, (Customers have been taking care of), successful delegation,
需求 － 系统（顾客服务完善），成功的委派
Challenge – Owner no longer can control everything, or they reach the limit of what they can personally do. They need other people to step up and responsibly manage parts of their business. Known in market area, but need to expand into new territory (Geographically or product specific)
挑战 － 业主不能自己控制一切，或者说能够亲自做的事情有所限制。他们需要别人介入，管理业务的一部分。在市场上被熟知，但需要扩展到新的领域（地区或者产品）
Advantages – Nimble, have customer base, have reputation, have staff , can still move quickly and make changes.
优势 － 灵活，有客户基础，有声誉，有工作人员，可以快速变动
Opportunity – take over new territory, move faster
机遇 － 接管新的领域，发展的更快
Focus – systems to help business run smoothly in order to continue to provide high quality service/product
注重 － 为了持续提供优质的服务／产品，需要系统来帮助企业顺利运行
Needed to move to next stage – High quality systems run by high quality people.
迈入下一阶段需要 － 由高质量的人员运行高质量的系统
To find out more about the needs and challenges of large sized businesses see Part 3.