Every business owner would like their business to grow. However, the business growth process comes with its fair share of challenges and a company may experience pain during the growth process. An entrepreneur needs to know about the stages of business growth. That said, here are the 5 stages of business growth that all companies usually go through.
1. Development Stage
Once you have determined that a certain business idea is worth developing, write a business plan. A good business often sets the course of a business lifespan. All successful businesses usually operate on set out plans that are reviewed from time to time. The plans enable a business to meet its needs and also helps it to identify new measures for strategic growth.
For Luke Mollica, who runs hypnotherapy courses across Australia, getting the business off the ground is perhaps the hardest part. “You have all of the ideas mapped out of what you want to do, but taking those actionable steps to make it legitimate is difficult. Once that happens, you’ve got skin in the game. You need to plan for years ahead of time too.”
Once a review has been done, a business will be able to identify key target areas and the business plan is revisited and this becomes a milestone for the plan’s next iteration. A continuous business cycle allows an entrepreneur to increase their chances of business success. A business plan is also an important tool for an entrepreneur looking for outside investment.
2. Start-up Stage
This stage is the most stressful and risky stage and this makes most entrepreneurs give up. The original budget may exceed and an entrepreneur may spend more than what they had allocated for the business. Challenges at this stage include: hiring staff, raising money, managing the various accounts and establishing a customer base.
3. Growth Stage
A company that reaches the growth stage has overcome the challenging start-up stage and are now growing their client base and generating revenue. Even though their profits have increased, the competition is catching up.
Landscaping entrepreneur Patty Leglise believes that finding ways to grow to suit the business may take some trial and error. “Growing the business often causes some growing pains. You don’t feel like you’re ready, you don’t have the right systems in place and you may think that you’re moving too fast. Truth is, you have to grow with risks involved. If you wait until you think you’re ready to grow, chances are that you have to grow even more than what you anticipated and you’ll always be playing catch-up.”
However, if an entrepreneur wants to scale their business, they need to fine-tune their business model by looking for ways to improve operational efficiencies and increasing their profits before thinking of expanding their business by inculcating methodologies like sales and marketing models. If you want to grow your business efficiently, start by analysing your key profit/business drivers before coming up with strategies that will make these profit drivers grow with the least costs.
4. Expansion Stage
This stage is characterised by a new season of growth and increasing distribution channels. A business in this stage needs to gain a bigger market share and look for ways to stream in new revenues and profit. This stage needs a streamlined plan and research before expanding into new markets. Challenges at this stage include the growing market competition, getting new customers, and expanding the existing entity.
5. Maturity Stage
In this stage of business growth, the company is dominating and has stable profits because of the entrepreneur’s strategies during the previous 4 stages. The maturity stage often relies on a financial source to overcome the challenges and help the business keep booming.
Jayati Dave, who runs first aid courses in Victoria, says that you have to continually take your business to the next level so you don’t get left behind. “Everyone is running the same race, and if you stay stagnant for a little while, you’ll either be left behind or no longer ahead of the pack. To keep growing you obviously need increased financial support, so make sure you have reliable income from people on that front.”
Even though the maturity stage is the final business growth stage, it is not where you want your business to stay. A company that stays in this stage may still be growing but it does so at a slow pace. If this is the case, an entrepreneur has to go back to the drawing board to get their business back in the expansion stage or look for an exit strategy.
Decades of experience helping fill the HR needs of top companies
We'll help you prioritise what's important to you in your next career