[Column] Growth Trajectory of Small and Medium Enterprises 4: Growth Trajectory from the Stability Period

I would like to introduce a column article.

When entering a stable period, companies can be divided into three patterns. The next phase after the stable period is marked by the threshold of 1 billion in general scale. There is a clear difference between companies that surpass 1 billion and those that do not. These differences can be categorized into the following three patterns. ■ Stagnation and Decline Period When a company reaches a stable period and the president fails to propose the next growth strategy, the company quickly falls into a rut. A rut is defined as doing the same thing for three years. This leads to a decline in performance. The stable period does not mean that performance remains consistently stable; it simply indicates that a foundation has been somewhat established. The operating level at which small and medium-sized enterprises break even is typically around 95 to 98%. If the gross profit margin drops by 3% or 4%, the company can quickly fall into the red. It is important to understand that companies that cannot propose further growth strategies will soon enter a stagnation and decline period. ■ Mild Growth Period The mild growth period refers to a situation where a company is experiencing slight growth due to favorable product selection, customer selection, and industry selection. While dealing with excellent products and good customers, if no actions are taken, there may be slight growth along the current trajectory, but the company will not be able to break through the 1 billion barrier.

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