In the book Five Stages of Small Business Growth, researchers Neil C. Churchill and Virginia L. Lewis dig deeper into the growth framework that all small and medium-sized enterprises (SMEs) normally go through. It outlines common scenarios and challenges businesses face at each stage, and the steps they can take to move to the next phase.

The survival stage is the second phase of this framework. At this stage, an SME has passed the phase of mere existence in its sector. It has customers and the ability to consistently deliver goods and services. The business structure is still basic, with the owner still making most of the decisions despite the presence of a business manager. System development, or the use of technology and automation in the business, is minimal.

Once an SME generates enough revenue to break even and grow in size, it moves on to the third stage: the success stage.

At the success stage, the SME has generated above-average revenue to upgrade its current assets, such as tools and equipment. Its workforce is also growing significantly, with more managers taking charge of minor business decisions. At this point, SME owners have the luxury of deciding if they want to grow, maintain business stabilityIfts, or disengage from the business while maintaining the business more or less at status quo.

HOW TO GO FROM SURVIVAL TO SUCCESS
Moving forward to the success phase either seems like a daunting task or a fluke, especially when you’ve been a small business owner in the survival phase for a while. The key is to look at what aspects of the business to focus on and improve on, which will ultimately set you apart from your competitors.

Here are two business aspects that SMBs need to focus on:

• Offer an excellent customer a service

While a company’s goal is to make a profit, its goal is to get and keep customers, according to Professor Theodore Levitt of Harvard Business School in his book, The marketing imagination. You basically depend on your customers for a living, and to be successful you have to understand customers and appreciate what they want.

Excellent service can satisfy your customers. But without consistency, they won’t become loyal customers, which is what SMBs should aspire to. When customers consistently get what they expect, they repeat transactions and give great feedback. With online reviews being a deal breaker for consumers these days, a bad review can hurt your sales and your reputation.

Consistently excellent service is essential for current customers to attract new ones. When customers become willing ambassadors for your brand, you know you’re doing it right.

• Find good investors

The right investor will not only be a reliable source of funding for your business, they will also provide advice and business expertise whenever you need it.

Consider your business goal and how an investor would make them easier to achieve. Would you only need financing, business expertise, or a mix of the two? Decide where and how much your investor will be involved in your business, as this will affect your decisions and long-term direction.

So what should you look for in a potential business investor? First, their financing capacity: their ability to finance and the diversity of their portfolio. Various recent investments show you how solid an investor’s financial game is. When they have many diversified investments, it means that they are not solely dependent on you to bank. A quick Google search can tell you what deals your potential investor has made, how many investments they make each year, and what they specialize in when it comes to investing.

Second, the investor’s assets and resources. The right investor can help you manage your capital, infrastructure and more. As industry experts, they can offer connections, expertise, and advice on critical business decisions. According to Crack the funding code by Judy Robinett, the survival rate of most tech companies is 20%; but up to 80% of those who follow mentoring programs can survive.

Finally, you want investors who recognize the value of your business and its potential for the future, and who are genuinely invested in your long-term vision. Choose reputable stable investors who are ready to invest in your business for the next five years or more.

Choosing the right investor means finding the right balance between their financing capacity, their assets and resources, and a sincere belief in the potential of your company. Ultimately, the right investor will lead you in the right direction and give you the tools you need to succeed.

Bringing your business to the stage of success can be a long road, fraught with pitfalls that are sometimes beyond your control as a business owner. However, by taking small steps to build a strong network of loyal customers and an even stronger source of funding to keep improving your business, you can slowly but surely shift from the survival mode to the success you’ve always wanted.

(This article reflects the personal opinion of the author and does notfletc the ofIfsocial booth of the Management Association of the Philippines or MAP.)

Benedict S. Carandang is a member of MAP and Vice President for External Relations of First Circle. First Circle is an award-winning finance company that offers select successful SMEs free financing to grow their business up to 10 times their current potential. Under First Circle’s Growth Partner Program, SMEs can benefit from a zero-rate, always-available line of financing for the next five years, equivalent to 10% of their annual sales. Additionally, SMBs can have exclusive access to current and future First Circle products, such as B2B payments, corporate cards, foreign exchange and cross-border funds transfers, as well as a B2B marketplace. Qualified SMEs will also have a dedicated business consultant to help them along their journey to success, all in exchange for a passive 25% stake in their business. This article is co-authored with Ian Benetua, a regular contributor to the First Circle Resource Center.

[email protected]

Benedict@firstcircle.ph