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For the principals at Matchstick, the 49th parallel had for years seemed more like an insurmountable wall than a mere line on a map. The boutique Toronto marketing agency specializing in generating word-of-mouth buzz for consumer products had shied away from trying to scale that obstacle until 2006, when partner Patrick Thoburn got some sage advice about U.S. clients from a business acquaintance: "They do not care where you're from. They just want the best company for the job."

Thoburn and his partner were already working with the Canadian arms of Chrysler, Starbucks and other U.S. giants. Emboldened, a Matchstick team embarked on a series of dog-and-pony shows last year, pitching their services to a range of American companies, starting with Chrysler's head office. Almost overnight, the 15-person firm broke out of its domestic shackles. Today, a quarter of its revenues come from U.S. clients, and Matchstick has hired a sales executive specifically to service those accounts. "We think bigger," says Thoburn. "We think North America-wide."

Such breakthrough moments can rapidly transform small, entrepreneurial businesses, catapulting them to new levels of sales, visibility and size. The triggers for this high-velocity growth can often be traced to a clear advance, such as winning a large account, embarking on an international expansion or gaining a high-profile endorsement. In other cases, breakthroughs occur not by design but through a happy confluence of market conditions. And, sometimes, notes University of Western Ontario management professor Stewart Thornhill, the tipping point only becomes apparent in hindsight—as when a small project or sale grows to become a major account.

Entrepreneurs need to prepare for such changes ahead of time, so they can take advantage of the opportunities while bracing their operations for the sudden expansion if and when it comes. Because once those orders start pouring in, a small business has to grow up quickly. "The smart people are the ones who plan for a breakthrough right from the get-go," says Rebecca Reuber, professor of strategic management at the University of Toronto's Rotman School of Management. "Rapid growth is really hard because it requires tons of cash. A lot of firms founder during this process."

Herewith, five destiny-changing events and how to safely navigate them.

Landing a major customer
Small-business consultant and recruiter Barbara Morris, president of Elevate Organizational Consulting, vividly recalls how her fledgling Toronto consulting practice took off when she won a gig with an ad agency that itself was experiencing rapid growth. Her firm had been retained to do recruiting for the agency, so she had to quickly hire half a dozen new employees for her own company in order to deal with the additional work from what had suddenly become her largest client. "The challenge was finding good people in a short period," she says.

When a big new client comes on board, the staffing issue is usually soon eclipsed by more demanding problems: how to service existing, smaller accounts, and how to deal with new business. In fact, when a small firm acquires one or two customers that dwarf the others and come to represent a lion's share of revenues, tough decisions need to be made. Morris, for one, stopped taking on new clients for several months while she geared up her firm for the ad agency contract.

Ian Gordon, a principal at Convergence Management Consultants in Toronto, says small businesses facing this dynamic should not even try to treat all their customers equally, even though he admits this may sound like heresy. "Some clients are just vastly more important than others," he says. He cites the example of one printing-sector company that landed a large and fast-growing customer. The printer opted to cultivate the relationship, offering this one customer a range of new services that produced a tenfold increase in revenues, says Gordon. "They treated that one important account as a market."

But many companies are caught off-guard when a big new deal makes their business suddenly explode. Accountant Jeff Kulbak sees it all the time with his TV and film production clients: A company with one or two series scores an international rights contract and suddenly finds itself with several programs in the works as its reputation spreads virally among global distributors. An associate with Daurio & Franklin LLP, Kulbak has worked with an East Coast animation company that saw its production volume triple in less than two years as U.S. and then Canadian broadcasters snapped up its kids' programming. From the outside, such stories look great. But these firms, says Kulbak, tend to be utterly unprepared for the financial implications. "They haven't done cash flow projections, they haven't thought about financing the new projects. And they're not understanding receivables or thinking about the tax consequences."

Eileen Fischer, professor of entrepreneurial studies at York University's Schulich School of Business, says businesses that win one or more very large accounts should quickly build out their staffing infrastructure, with contract, temporary and full-time employees dedicated to such core functions as accounting and human resources. The point is to ensure the growth is sustainable and you can deliver what you promise the clients.

Expanding into a New Market
The decision to set up shop in a new location is a bullish gesture, reflecting an entrepreneur's confidence that his market is scalable. For Lululemon Athletica, now a $275-million company, the breakthrough moment was founder Chip Wilson's decision to invest in an ambitious expansion, from a handful of thriving stores in Toronto and Vancouver to a chain of outlets across North America.

Far less dramatic expansions can generate breakthrough results, not all of them pegged to sales. Matchstick's Thoburn says doing business stateside has given the partners confidence to pursue larger deals and has won the firm greater respect on its home turf. "Being successful in the U.S. market definitely stands for something [in Canada]."

But expansions aren't easy, forcing small businesses to grapple with complex logistics. Ideally, you want to have an internal champion who will assume complete responsibility for managing the expansion. For that individual, this may entail physically relocating to a new branch office to ensure things run smoothly in the ramp-up period. Such tasks should not be delegated to hired hands or new employees, who may not have a history with, or commitment to, the company.

Then there's the detail work. For instance, small retailers that move into new cities need to set up shipping, receiving and ordering systems that can handle this new volume and complexity; you can no longer rely on a single local buyer or store manager. The expansion may also put emotional distance between long-standing clients and the company's founders, who had built personal relationships with their best customers. Suddenly, those accounts are handled by sales managers, who may not be able to provide the same level of service. "When you go from two or three locations to more than that, you're in a different business," says veteran retail consultant John Williams, of the J.C. Williams Group. "By definition, you can no longer be hands-on."

Scoring a PR Coup
In early 2007, a tiny Toronto cosmetics company called Balmshell found itself in the media limelight after its founders, twin sisters Jennifer and Fiona Lees, managed to get their lip gloss included in the lush "swag" bags given to celebrities at the Oscars and the Grammys. The opportunity arose after a marketing executive with L.A.-based Distinctive Assets, which prepares the bags, read a short article about Balmshell in Women's Wear Daily and was impressed enough to drop them a note.

In the fashion business today, a celebrity endorsement is money in the bank, says Fiona Lees. But the media coverage spawned by proximity to Hollywood glamour may not focus on what you expect. "The press we got was all about Balmshell being a Canadian company," she says. The stories nevertheless generated an instant visibility, and helped Balmshell secure orders from high-end retailers like Sephora.

Media attention, industry awards and third-party endorsements (a favourable hotel or restaurant review in a prominent travel guide, for example) can spawn rapid growth not just by raising a company's profile—smart firms seek out industry competitions in order to burnish their credentials. In Matchstick's case, an award from the Chicago-based Word of Mouth Marketing Association—for "Best Demonstration of Return on Investment"—has helped the company stand out as it competes with much larger brand-marketing firms to win U.S. clients. Schulich's Eileen Fischer says industry awards can be particularly valuable for business-to-business firms bidding on competitive contracts because they beef up the resumé sections of their proposals. Indeed, she recently completed a survey of small businesses on the effectiveness of business awards, and the majority confirmed that such accolades were beneficial.

Still, a burst of publicity can be a mixed blessing if you're not ready for it. A wave of intensive media attention can trigger a deluge of orders that rapidly drains a retailer's or manufacturer's inventory. "The business has to be prepared for the story before the story comes out," says Rotman's Rebecca Reuber. What's more, there's a risk that consumers may feel disappointed if the product's quality or cool quotient fails to live up to the hype.

Besides, publicity isn't always free. Balmshell, for one, had to ante up $6,000 to be part of the Oscar swag bag, and there was no guarantee that its product would end up embellishing any famous mouths on the red carpet (as it turned out, it didn't). In the wake of that experience, the Lees sisters take a more discerning approach to dispensing freebie samples and paying for endorsements. They opted to pass on the 2008 awards ceremonies and instead to focus on building their retail presence using a network of sales reps. The strategy appears to be working: This fall, Balmshell products rolled out in 185 Shoppers Drug Marts across Canada.

Getting a Capital Infusion
Fast-growing firms tend to be cash-eating machines with fearsome burn rates, making access to capital critical. A big bank loan or equity financing can suddenly enable a small business to execute its strategy at a pace not previously possible. Yet the reality is that outside cash always comes with strings and expectations attached, and that's where the pitfalls lie. This is especially true if you've been running a self-financed company and haven't been accountable to anyone but yourself.

Many entrepreneurs are taken aback when angel investors they approach for funding turn out not to value their companies as highly as the founders do. This is why timing is key: If you go looking for investors too early in your company's growth trajectory, the valuations will likely be lower than if you seek backers after gaining some momentum and market success.

Once you persuade someone to invest, they'll expect you to deliver on the promises you set out in your business plan. And falling behind on your timetable can quickly make that financial well run dry. Consultant Barbara Morris finds technology companies particularly vulnerable to this scenario. "If you're still in the development stage when your funds run out, you won't get more. Investors expect something for their money."

Angel and venture capital is often smart money—meaning the investors offer experience, expertise and advice aside from cash—but it can come at the expense of control. Entrepreneurs who are wary of meddling outsiders do have alternatives. For example, Albert Behr, who runs a three-year-old "business accelerator" and investment bank in Toronto, helps upstart Canadian green-tech companies get funding from multinational software or manufacturing firms using licensing deals. The entrepreneurs earn often hefty royalty revenues as their technologies are distributed internationally. One of Behr's clients, a four-year-old Toronto company that makes business continuity software, secured a licensing deal with software giant Computer Associates that turbocharged its growth. "There are all kinds of licensing deals going on," says Behr. "The days of the IPO for tech are gone."

Hiring a Key Executive
Small business experts all know this story: An entrepreneur-driven firm finds itself in high-growth mode, and suddenly experiences a crisis of management because the founder doesn't have the skills to manage the transition. Says Western's Stewart Thornhill, "If you want to become a big business, you have to be willing to hire a chief executive officer who has done this before."

To determine if you need to bring in a seasoned outsider and other key line managers, ask yourself: Is the company personality-driven, as often happens with founder-run firms? Does it have systems in place to manage its growth? Industry veterans can be invaluable sources of business counsel and contacts, and your firm should look to attract such individuals, at least to serve on your advisory board.

The calculus for bringing in high-profile new senior managers is more complex. Cost can be a significant factor, especially for firms grappling with the cash flow crunch of rapid growth, as seasoned executives don't come cheap. Fit is also a critical consideration. Entrepreneurs have so much invested in their companies that they often have trouble letting go of, or sharing, the reins. Consultant Ian Gordon warns companies against blindly going after hotshots or perceived rainmakers in the hopes they'll deliver that elusive breakthrough. "The more useful conversation is to ask, what are the gaps between where we are and where we need to be, and what are the gaps in management?" he says. "Then find people with those traits."

That's precisely what a tiny Toronto-based firm called Fresh Baked Entertainment did. Founded by two television writer-producers last spring, the company's plan is to develop four- to five-minute branded online shows—essentially, short films built around consumer products. Earlier this year, the Fresh Baked principals recruited Rob Tait, a 20-year veteran of the advertising business who's held executive creative positions at the likes of MacLaren McCann and BBDO, to step in as president. "My role is to take this idea and make it happen by bringing to bear the industry background, the connections and the business experience," says Tait. "We're really at the pre-breakhrough phase." If Fresh Baked chose well, they won't remain there for long.