Think Bigger

4. Know Your Customer

Paul's product battled other reading management programs-IBM's Right to Read, Broderbund and The Learning Company, to name a few-and is now bigger than all of them. One difference between Paul's company and the rest is that Renaissance Learning markets directly to educators. "Since we're on the phone with them, we know the customer who's going to use the product," she says. "Most others go through distributors and never interact with customers. If you work in an office and you have a phone and you can go to the bathroom when you want, then you don't understand what it's like to be a teacher."

Contact with customers is a key to growth at Jade Systems, too. "We've been characterized as having put the human touch on automation," says Milner. "Our clients can get the same computer equipment somewhere else, but at Jade, customers can talk to trained computer consultants [about] their needs."

5. Develop New Products and Markets

After a company takes off with its original product, that early surge typically starts to fade. The original product requires extensive change, or a new technology emerges to make the original product obsolete. At this stage, it's crucial for the entrepreneur to develop additional products and seek new markets for the original one. The problem is, the company becomes more complicated with the changes.

Over the past three years, Renaissance Learning has spent plenty on product development, introducing upgrades to its original products. "We keep our customers," says Paul. "Some have used our products for 10 years."

6. Listen to Advisors

Rubio says one of the keys to his success is a great board of directors. "I listen to them; I'm constantly on the phone with them, and they're critical," he says. "If I make a mistake, they let me know. The more innovative thinking you can surround yourself with, the more successful you'll be."

Doorley sees relying on advisors as a common quality of companies that sustain high growth rates. "The entrepreneur needs to be able to draw on a savvy, competent set of advisors," he says, "people who have been there before."

7. Plan for More Growth

Entrepreneurs intent on high growth constantly think about what their companies will be like at the next stage. "When they have $10 million in sales, they're thinking about what it will look like with $50 million in sales," says Doorley. "And then they ask, 'What do we need to do today to get there?'"

Milner's company went through that process in 1998, at the $50 million mark. Milner had to rethink policies and procedures. People had inherited responsibilities they didn't need to take on. When the jobs got redefined, efficiency improved. "If you look at our numbers that year, we didn't grow much in revenue, but we had a huge jump in profitability," says Milner. "We learned that as we develop procedures, we have to ask whether those policies hold up to change."

Rubio sees his company's next phase as national expansion: "I see us at 1,000 restaurants at least, though not in the next few years. For that, I need to bring in even more professional management."

Miller, Milner, Paul and Rubio exemplify the characteristics necessary for companies to grow, says Doorley. In addition to thinking ahead and planning for growth, entrepreneurs have to be ready to be bigger. Says Doorley, "For growth companies to continue to grow, the management has to make scale their friend."

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This article was originally published in the December 2000 print edition of Entrepreneur with the headline: Think Bigger.

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