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4 Steps From Startup to a Growth-Stage Company Whatever your business, the fundamentals of growth are the same.

By Ed Sappin

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

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You've taken the plunge and started a new business. You made it through the first year and turned a profit - congratulations. When an entrepreneur takes an idea and turns it into a profitable business, it's a cause for celebration. But it's not enough to just keep doing the same thing -- continued success is going to depend on different and evolving strategies. In order to scale up and grow in a big way, business owners have to prioritize a growth to-do list.

Mohan Sawhney, a professor at the Northwestern Kellogg School of Management, notes that "[while] it's tempting to view business growth as a smooth, linear path, the reality is much more complicated." Often, the talent and leadership that enable rapid expansion in a company's early stages may not be enough to keep fueling high growth and this causes businesses to stagnate.

In order to properly make this pivotal transition, business owners have to understand all the elements at play, and accept that scalability is needed across all operations. Here are four fundamental steps growth-stage businesses must take:

1. Stay focused on what sells best.

Many startups fail because they spread themselves too thin at the growth stage. They try to do everything for any client or they try to expand into multiple new markets simultaneously. And many times these strategies just do not work.

Related: 5 Reasons Why It's a Bad Idea for Startups to Outsource Software Development

Think of the classic board game Risk. In each competition there is usually one player who tries to take over the world way too early by battling anywhere and everywhere. Inevitably, this strategy fails -- and the empire crumbles.

Instead, business owners should concentrate on core business areas. Expansion is a must but thoughtful, targeted growth is what wins the day. Being too opportunistic can waste precious resources, as well as take focus away from what made them successful in the first place.

2. Then innovate and expand strategically.

During the growth stage, pivoting towards what sells best and moving away from what doesn't is the key ingredient to maintaining, or even increasing, expectations. Entrepreneurs need to strategize and innovate into niches that will help the core business expand.

Consider everything Uber has done to date. Uber continues to penetrate new and potentially lucrative markets around the world. Their mobile payment services have evolved to accommodate multiple payment options, which has proved useful in international markets. And the company is consistently increasing its selection of vehicles. Uber has also been expanding its services to include off-the-beaten-path travel options, including hot air balloons rides in China and boat transport in Turkey.

Remember that Uber is not a bona fide success yet -- but it has gone from a start up to a growth stage enterprise successfully. Uber has kept its operations growing through a mix of calculated market expansion and innovative services that help push its core business goal. But it's continued to focus on what it sells best and what its customers want most -- rides.

3. Let processes and products take center stage.

During the initial startup phase, many companies rely on the skills of a small core team to seize opportunities and impress clients. But during the growth stage, maintaining that level of quality becomes a very difficult task, especially as core team members move on to new opportunities.

Related: 7 Myths About Starting a Business That I Used to Believe

As small businesses transition into the growth stage, they need to standardize business processes so that great experiences can be consistently reproduced. This is accomplished by embedding expertise into the processes and structures that keep a company afloat.

Utilizing the best technology is a smart start, but entrepreneurs also need efficient hiring methods, tailored training programs, great incentives and a company culture that fosters collaboration and communication.

James Allen, a business consultant and Harvard Business Review contributor, states that every decision to build systems within a business should be "linked to the company's core strategy" and enhance "the organization's ability to deliver it."

4. Build your brand.

The startup phase is driven by client relationships. A great way to ensure clients think well of a company is to focus on building a positive brand image. This makes it less likely that a customer will leave if their current account manager calls it quits -- something many small businesses fear.

As new business owners navigate through the growth phase, they should pay attention to how their brand is being perceived. It should embody their business goals and ideals, and should be defined more by what it does than what they say.

Any business that wants to build a loyal following must be able to provide the positive experiences that will result in positive perceptions and brand awareness. This requires superior product development, a strong focus on a client-centric sales funnel and excellent customer service. These should be core tenets of every business plan.

Related Book: The Brand Mapping Strategy: Design, Build, and Accelerate Your Brand by Karen Tiber Leland

Leaping into the future.

With continued success comes brand recognition. And a positive brand image is as good as a brand new storefront is at bringing in qualified leads and loyal customers.

By staying laser-focused on what works, pivoting away from what does not, continually innovating, and professionalizing processes, a mid stage company should be able to avoid falling into the trap of the growth plateau. Instead, their peak will continue to rise towards becoming an established enterprise, creating more jobs, more revenue and more positive impact.

Ed Sappin

CEO of Sappin Global Strategies

Ed Sappin is the CEO of Sappin Global Strategies, a strategy and investment firm dedicated to the innovation economy.

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