Evolving from a startup to an established business

Transitioning from a startup to a full-fledged organization will have its growing pains. Focus on these three critical components to help the process go more smoothly.

The startup days can be heady times punctuated by long hours, big accomplishments, and seat-of-the-pants management decisions. Eventually, however, your business will need to become a more mature entity. Here are three critical components to consider as you transition out of the startup phase, as well as tips for avoiding common pitfalls that accompany growth.


A startup's dynamic atmosphere is unlike any other business environment. An intimate team works tirelessly together, feeling as if anything is possible. The highs are high, the lows are low, and the emotional rollercoaster is as intoxicating as it is draining. As your company scales, your office, or offices, will need to reflect stability, consistency, and experience—for the good of your employees and your customers. But, ideally, this next version of culture still reflects the spirit of those early days. "Remember why you started your company in the first place," urges Joe DiNicolantonio, executive vice president, head of business banking at Regions Bank. "Sometimes businesses make the mistake of trying to be all things to all people as they grow. Stick to what you do best. Create realistic, achievable goals and remember your purpose."

Turnover is a natural part of the business evolution process, and you'll need to make some tough personnel decisions. Do so quickly, and with your desired company culture in mind. "Some personalities are better suited for startup environments, and as the culture shifts to accommodate a growing company, you can expect to see a corresponding shift in the staff.  But don't use this as an excuse to completely forgo everything that made your start-up culture great," advises Gene Austin, CEO of Bazaarvoice, which developed from a tech start-up in 2005 to a publicly-traded company with 10 offices around the world. Austin recommends creating a "culture committee comprised of both new and existing employees to help blend the staff and ensure that the original company culture doesn't disappear."


Talent is key to the success of any business, of any size. You'll navigate your growth more seamlessly if you hire an experienced team and keep your long-term needs in mind. "Get a smart, experienced team on board early in the transition period, and you will be more likely to avoid many of the mistakes young companies fall victim to on their growth trajectories," says Austin.

In addition to finding and retaining new people, you'll need to be prepared to manage them. It's not easy to go from working with a small team to running a large one. "Leaders may not know all the team members, or, even if they know them, they don't know them as well as when there were just a few employees. You certainly don't have the shared history of starting something from scratch and seeing it turn into something real," points out Ryan Downs, former senior vice president of worldwide operations at PayPal and president and CEO of Proxibid, an online auction marketplace. Downs recommends hiring people who are over-skilled for their initial role and allowing them to quickly take on more responsibility as opportunities develop.


As your business becomes more successful, you'll be responsible for hitting larger financial targets. Your investors will expect more from you, as will your employees and customers. You'll need streamlined processes in place to keep your business running. Hiring the right people will help, but don't overlook the importance of the following:

  • Accounting and financial processes that prioritize proper documentation and legal compliance while helping sales managers best understand and reach their increased  financial target
  • A communication process suitable for a larger team
  • Technical infrastructure that supports your current needs, as well as a plan for supporting your growth goals
  • Maintaining the customer experience and ensuring top-notch service
  • Training and developing your team so they understand these new procedures

"To effectively make change, you need to prepare," says DiNicolantonio. "Consider how the new process will affect your customer, business operations, cash flow, and your entire business before you implement the change. Keep in mind you don't need to know everything about every topic. Turn to the resources around you for counsel, from your local banker to your CPA."

Strive to create flexible processes that can scale with you, and try to find the right balance of structure—you don't want to roll out too many processes and risk sacrificing your culture. Ideally, you'll introduce a degree of organization and sophistication without losing sight of the cultural elements that made your business unique, nor of the mission, the sense of purpose, that has driven you from day one.


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This information is general in nature and is not intended to be legal, tax, or financial advice. Although Regions believes this information to be accurate, it cannot ensure that it will remain up to date. Statements or opinions of individuals referenced herein are their own—not Regions'. Consult an appropriate professional concerning your specific situation and irs.gov for current tax rules. Regions, the Regions logo, and the LifeGreen bike are registered trademarks of Regions Bank. The LifeGreen color is a trademark of Regions Bank.