The expansion of existing firms is often credited with 75-80% of the new jobs created in a local economy. The Edward Lowe Foundation and others point out that Stage 2 companies (generally, those with 10-100 employees, $1-$50 million in sales) are the fastest growing firms. In their very useful website, http://youreconomy.org/, they have provided a tool for understanding the dynamics of establishments from a local to a national perspective by composition, industry, and ranking.
During our recent webinar we heard from David Haviland, founder and president of Phimation Strategy Group, a Stage 2 company management consulting and coaching firm. David pointed out the challenges companies face as they move from a start-up phase to one of high growth. He highlighted two parts of the challenge – the shift from sustaining the company to growing it, and the fact that, with their bigger size, companies face issues that have grown much more complex. No longer is the firm struggling to meet payroll and lurching from project to project, but rather it becomes more about market share, strategic thinking and planning, attracting and keeping talent, access to capital, and more. These fast-growing companies are focused on long-term value rather than day-to-day survival.
Economic development organizations often focus their energy on business start-up and early stage development through business incubators and other services. While these are important, they are not the greatest source of new jobs like Stage 2 companies are. However, when it comes to address the more complex long-term issues that these fast-growing companies face, economic development organizations are ill-equipped, according to David, and are often not considered a resource by these firms.
In their book, Stage 2 Owner’s Manual, co-authors David Haviland with Randy Albert offer tools and tips for overcoming a company’s growing pains. In addition, their firm offers services, products and tools, and webinars to address the needs of Stage 2 companies. Check out what they have to offer. You and your Stage 2 companies will find it helpful.