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Should Every Entrepreneur Expect or Aim for "Hockey Stick Growth?"

Virtually, every business plan that's ever been presented to the investor community, invariably, has that fabled "hockey stick growth" period where suddenly revenue jumps exponentially. And in reality, few businesses ever experience such growth, at least not all at once. For every Amazon or eBay that have, there are the thousands of small businesses that just "putt-putt" along growing either at a slow by steady rate or taking a few years before they really begin their growth period. And, of course, some never grow at all, constantly chasing that exponential growth.

Growth is not a destination.It is a journey.And you need to be equipped to make the journey. For a small business that means understanding what growth means and having the resources to enable that growth AND the bandwidth to manage it. Few entrepreneurs really take the time to fully grasp this. So, while "hockey stick growth" might be something you're chasing, it may not be something you can manage.

So, here's some guidance to help you better understand growth, both the exponential and the steady and everything in between, and how to best manage it.

"Hockey stick growth" is like going viral - good luck with that!
Are there companies that realize that kind of growth? Sure there are.Just like there are videos that go viral.And can you explain either phenomenon, except, right place, right time...or luck? You can plan on a very bullish growth rate, but know that you have to have the right resources, the right management and the right timing to make it happen. Also, know that the odds of you achieving such a growth are very high, approaching fantasy for some.

"Go big or go home" is a venture capital conspiracy!
The venture guys don't want to waste time on investments that are less than $5 million.In fact, they'd prefer to commit more like $25 million to a venture (for them it's also a bandwidth issue - easier to manage 10 $25 million investments than 50 $5 million ones). So they want (and need) you to shoot the moon and they advocate a "go big or go home" philosophy, where you focus on markets with huge numbers to create the opportunity for that "hockey stick growth."  Face it, if you're looking to raise money from the venture community, your odds are slim to start with. Only 3,500 businesses got venture capital money last year (and more than 600,000 businesses were started). Focusing on "go big or go home," you may throw the baby out with the bath water. In your zeal to find the big play, you may miss the smaller one and your dream will die, unrealized...and unfunded.

Managing growth is often harder than finding resources to effect growth.
If your business is growing nicely, you often can fund all of that growth out of existing cash flow. But the challenges that growth often presents are not easy to manage out of existing management. Growth forces people to stretch, from the entrepreneur/owner down to the customer support person. For some, it's like when folks go through a work out regimen to get stronger.To make it effective and make you stronger, it has to stretch your capabilities. For some, it works well and they reach new levels of fitness. For others, it's just too hard and they fall back into their old habits. Same thing with growth it forces people to stretch, except if folks don't accept the new management challenges it brings, the growth gets stunted.

No growth just for growth's sake.
Now, I'm not anti-growth.In fact, quite the opposite. But, you should have a rationale for your growth plans and understand how you will fund that growth and, as noted previously, how you will manage it. Don't just let it happen. Be ready for it, not surprised by it. Make sure growth plans are just growth for growth's sake.As I noted in an earlier post - "more is not better, it is only more."

"Hockey stick growth" can happen...but so too can lightning strike in your driveway. Remember that growth is not a destination.It is a journey. Be prepared for the journey and plan for it to be rational one that fits you, your company and your resources.

"The Entrepreneur's Yoda" knows these things. He's been there. May success be with you!

Have you put a plan together with "hockey stick growth?" How did that go for you?Include the story in your comments.It will help other entrepreneurs!

If you like this post, by all means, share it with your networks and colleagues.


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