By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

 

"You can't tell how deep a puddle is until you step in it." ~ Muller's Law

 

Business Development: Stage-by-Stage Guide Gestation Stage Start-Up Stage Prototype Stage Roll Out Stage Rapid Growth Stage Expansion Stage Maturity Stage

Managing the Five Risks you face at all stages of your business development:

  1. growth risk

  2. technology & production risk

  3. marketability & competing risk

  4. financial risk

  5. team & management risk

Turn Risks into Opportunities!

SMART Business Architect (Ten3 Mini-course)

 

6.

Expansion

the company has product revenues, expands its production and diversifies into new areas

Organization: Decentralizing

Management:  Professional

Technology: Diversification

Funding Stage: 2nd , 3rd , Bridge

pp.

Problem

Solution

Action

6.1

Growth Risk:

  • Moving into the new business environment, with new laws and regulations

  • Customers in new areas demand special terms

  • No coordination of operating plan with financial conditions

  • No disaster recovery plan

  • No control environment

  • Reinventing your business model, experimenting extensively to find a successful new model and get to the next stage of growth

  • Development of an awesome flexible and innovative company structure adaptable to changing internal and external conditions

  • Development of an effective and flexible production systems responsive to change

6.2

Technology Risk:

  • Failure of proven technologies placed in the new environment

  • Broadening and expansion of production lines draws resources from strategic development of the core technologies

 

  • Establishment of an intellectual property management system tailored to the requirements of the expanded markets

  • Management of project portfolio and prioritization between the core competence and expansion projects

  • Development of the ability to adapt quickly to requirements of the new marketplace

  • Development of an innovation-conducive environment in the company

  • Top management participation

  • Development of strategic technology development partnerships

6.3

Marketing & Competing Risk:

  • Competitor's fierce reaction to your penetration in their markets

  • No relating marketing expenses to sales targets

  • No key account programs

Customer Success 360

Customer Value Creation

9 Questions To Answer

Synergistic Selling

  • Expand and re-target your marketing campaign

  • Research of the new markets

  • Research of the current market and its possible reaction to your expansion plans

  • Reinventing market development strategy

  • Development of marketing partnerships

  

6.4

Financial Risk:

  • Increased cash flow and requirements

  • Debt service exceeding cash flow

  • No ROI and capital investment analysis

  • Investments in unknown areas of geographical & channel expansion and broadened operating capabilities

  • Operating costs reduction through  optimization of production systems

  • Raising of venture capital for expansion of the business (second, third rounds) and/or for preparation of the initial public offering (IPO)

 

  • Look at several measures of capital employment - not just one

  • Work back to costs from what customers are prepared to pay

  • Reduce inventory costs by developing lean production systems

  • Explore new opportunities for fundraising: international financing; public stock offerings; strategic alliances; mergers and acquisitions

  • Raise additional cash licensing your technology out

  • Enhance shareholder value by adopting a leading-edge reporting model

  • Upgrade you expense control system

6.5

Team & Management Risk:

  • Turbulence caused by the need to develop new organizational structures

  • New executives' values clash with the culture

  • Layers slow decision-making

  • Lack of delegation and employee empowerment

  • No feedback & analysis of profitability & performance

  • Blurred accountability for corrective action

SMART Business Architect (Ten3 Mini-course)