As you grow your business, it goes through a life cycle, of sorts, encountering different challenges in each stage that requires a unique approach. Marketing, sales, business development, and preserving market share are all different now than they were when you opened the doors. Your priorities and business operations have changed and so have your finances. Understanding the stages of small business growth will help prepare you to deal with the obstacles that most small businesses face as they continue to grow.
There are five stages of small business growth that you’ll encounter as you grow and scale your business.
In the existence stage, businesses are typically small organizations in which the owners do most of the work and guides the actions of their employees. At this point, the company’s main concerns are getting clients and providing services or products that will earn their new client’s loyalty.
In the second stage of business growth, the company has managed to establish itself, has managed to generate a good client base and the quality products or services that those customers require. Revenues at this point aren’t capable of funding exponential growth, leaving survival as the major goal. Owners continue to be heavily involved in the day-to-day operations of the business.
At this stage, the business has accomplished goals and stabilized cash flow making it possible for the owners to make the decision to either use their business as a means of support or as a base for further growth. The owners will be less involved in day-to-day operations as this stage.
At this stage, the business has grown considerably, has achieved a sustainable amount of financial resources and attracted key managerial talent. Primary concerns at this stage are not only to accelerate growth but also to learn how to generate enough revenue to handle that growth.
Businesses that arrive at this stage are generally preoccupied with consolidating and managing the financial gains that were brought on by the accelerated growth. To continue being successful, they also will need to focus on retaining the benefits associated with their small size. That is their ability to be agile, efficient and think out of the box.
The five stages of growth must play a part in your business plan and the processes from stage one to stage five. If you plan for what needs to be done next and take immediate action, your business will have the best chances of achieving the next stage of growth.
If you don’t know what stage you’re currently in, take a look at your major risk factors. Are you just starting out or do you have a thriving machine that’s operating on all cylinders?
Once you know where you are, you can begin making plans for your next stage. You’ll also become more aware of your business, identify the problems, possible pitfalls, and opportunities at any given point. If you can do this, you’ll be able to navigate the five stages of business growth and thrive beyond your imagination.
If you’re struggling with any stage, I can help identify areas of improvement and scalability. Schedule a free consultation with me today.