The 5 Main Stages of Business Growth
Stages of Business Growth - Introduction
A small business overcome several challenges in order to remain viable in a global economy. Evolving workforce needs, more diverse consumer requirements, competitive new markets, changing sales/marketing strategies are just a few of the many bottlenecks mature businesses must face.
Every business experiences even greater hardships due to the Coronavirus, particularly for those in the restaurant or retail industry. While difficulties arise at each cycle business point, growth-driven businesses are the ones that come out on top. Read ahead to learn about the five stages of business growth in the life cycle
Stages of Business Growth - Small Companies:
5 Stages of Business Growth
Business growth occurs when an organization is at a new phase business development and pursues further opportunities to increase revenue. Every scale-up enterprise requires business growth to stay relevant in an economy with evolving market trends and consumer needs. Growth is a result of good resource allocation, marketing strategies, and high-quality products/services.
Growth is critical for successful businesses' maturity. Strong growth maturity streamlines the ability to obtain resources, hire qualified employees, and finance new opportunities. If an external disruption or market downturn impacts profitability, a growth-oriented company with a good business idea is more likely to survive.
Whether a business owner is trying to expand its share of the market, grow the customer base, achieve greater profits, or hire new talent, growth is always the objective. Making it through each stage of growth successfully is how a startup evolves into an established company. Here is the lifecycle of growth and how it functions in all 5 stages of many businesses
Stages of Business Growth 1 Development
Startups first establish a business plan, which is also referred to as the development stage. An effective plan is a foundation for an organization's entire lifetime. The plan should regularly be reviewed and tweaked to pinpoint new areas for growth and to ensure it meets evolving company needs. During the development stage, every business should address these questions
- Does the product/service bring value to a target market?
- Will the market accept the product/service as is or does it need changes?
- How will the business operate? What business units are needed?
- Will this business plan generate the profits required in the long-term?
Stages of Business Growth 2 - Startup
This stage of development is the most volatile of all of them, as many owners don't pull through. Typically, entrepreneurs find that they require more money than originally planned in the startup phase. Other difficulties include
- Finding investors to fund the project
- Hiring employees
- Finding a target market and establishing a differentiator
- Monitoring company accounts
Stages of Business Growth 2 - What is Happening:
Stages of Business Growth 2 - Startup
A growing business that makes it to this stage have surpassed the volatile startup phase. They are making money and increasing the number of customers, but are still struggling to maintain a competitive edge.
Scaling up the company is required to ensure growth progresses to Stage 4. Before seeking new advertising methods to expand growth, businesses should tweak and improve the current business model, minimize real-time bottlenecks, and increase profits.
It's critical to identify the factors that drive the business and increase profit before generating new plans to increase profits and minimize incurred costs. Difficulties at this phase of growth include
- Handling the number of new customers and profits
- Decreasing inefficiencies and optimizing workflows
- Managing the competition
- Increasing profit
Stages of Business Growth 4 -Growth
With a growing number of distribution channels and evolving company needs, this stage requires increasing the share of the market and pinpointing new revenue streams. While it's tempting to immediately seek out new customers, businesses should first research a niche market and generate a specific strategy. Challenges that occur during the four stages include
- A growing number of competitors caused by increased market share
- Acquiring the competition
- Mature business results in increased amount of products/services/inventory
- Rapid growth equals a greater number of offices, warehouses, and equipment
Stages of Business Growth 5 - Monthly
The maturity phase depends upon financial assets to conquer any difficulties and maintain profitability. Even though this is the final stage of growth, businesses shouldn't settle for a certain amount of revenue or customers. When established companies grow too comfortable, a new competitor will easily snatch more of the market share.
It's critical to regularly return to the original business plan and model to identify any new expansion opportunities. Other companies generate an exit strategy at this stage and sell all assets for a generous profit. Important factors to focus on throughout this stage startup include
- Is there a negative cash flow? How long can the company handle it?
- Are there any further plans to expand the company?
- Is the business planning an exit strategy? If so, what is it?
Stages of Business Growth 5 - What to Watch For:
Stages of Business Growth - Key Takeaways
In conclusion, here are the 5 stages of business growth
- The businesses' stage development requires a business plan, which should regularly be reviewed and tweaked throughout the business life cycle. The startup phase is extremely volatile, and many companies don't make it to Stage 3.
- The growth stage involves increasing the number of customers and profits but the company is still trying to maintain a competitive edge. This is the business life stage where growth increases, or it flounders.
- The expansion stage business requires small businesses to increase the share of the market by raising brand awareness and identifying new revenue streams. If unable to grow in four stages business growth phase, many businesses fail.
- The maturity stage is when a company is fully established. Mature businesses decide to pursue additional revenue opportunities or to develop an exit strategy.
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