Critical mass

The term critical mass is used for any situation or circumstance in which a set of factors satisfies conditions for something to undergo a fundamental change that then results in further growth.

In business, critical mass happens when a business or market gets big enough to undergo a fundamental change, usually resulting in a significant increase in profitability. Critical mass can refer to either the raw number of customers or the company’s market share.

Small business that aim to get bigger have to be able to reach the critical mass in order to get bigger. This means that for each new stage in a company’s growth there is a different and increasing critical mass for each new target.

In order to reach critical mass, businesses employ different strategies to attract more customers. This usually falls under marketing, specifically the promotions side of marketing. It should be noted that even if the critical number of customers is reached, if the company is not equipped to cater to that number, then profitability can plateau, or start going down again due to customer dissatisfaction.