What Are the Stages of Business Growth?
Mike Abelson shares with us what are the five stages of growth within a business.
It can sometimes be easy to forget that even the biggest international brands that we now consider common household names started small.
The tech companies Apple and Facebook are good examples. Retail brands like the furniture giant Ikea, and the iconic footwear brand Vans, had small and challenging beginnings as well. As such, it's only normal for any budding business owner to wonder, how did they get there? More importantly, what were the different stages that their company had gone through?
In this article, we are going to answer your questions by sharing the five main stages of business growth. Let's get started.
Stage 1: Birth ⭐️
The first stage that every business goes through is its birth.
A lot of business experts mark the start of this stage at the very moment that the business has officially come into existence, such as the launching of the online shop or the opening of a brick-and-mortar store. We prefer to mark the beginning of this stage, though, at the moment when the initial business idea was thought of. After all, this usually marks the start of the prep process required to launch the business (which is actually what this stage is all about).
You need to learn how to protect a business idea. Determine the skills, tools, and other resources you might need in order to establish your new brand.
You also need to do a lot of research and planning. Who is your target audience? Who is your competition? Is your idea even viable? Fortunately, there are a lot of resources available on how to start a business that can help.
Stage 2: Survival ⌛️
Now that your business is all set up, the next stage is going to be all about survival. It is normal for a business to struggle, especially during the first few months when you're still building your customer base. This is the stage where your business idea's viability is really going to be tested.
The main goal is to see if you can break even and possibly even earn significant revenue. Sadly, a lot of businesses fail at this point because of various reasons. On the bright side, it's also the stage that teaches you a lot about how to run a business.
Stage 3: Success 🎖
After the tumultuous survival stage, a lot of businesses actually experience a sort of golden age. It's the time when your initial business goals are starting to come to fruition and everything is falling into place.
You probably have an established customer base by now and you are already experiencing a sense of stability in terms of consistent revenue.
This is also the time to decide if you want to move forward to the other stages of business growth or not. After all, it is not uncommon for some business owners to choose to maintain their achieved status quo instead.
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Stage 4: Expansion 🏎
Should you choose to move on to the next stage, though, then that would be expansion. Your earnings from the previous stage should hopefully be enough for you to further grow your business.
This stage usually involves expanding not just the current business space but also its tools, staff, and clientele. As such, this is also an ideal time to consider investing more resources into product research and development. It's crucial to not rush this stage, though. There is such a thing as expanding too fast and it can potentially put your business at risk.
It's better to have a well-detailed plan on how you want to move forward. At the very least, this plan should include the financial details of your expansion, a realistic timeline, and the potential risks and benefits.
It won't hurt to seek expert advice as well. This can help uncover other aspects and perspectives that you probably wouldn't have even considered otherwise.
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Stage 5: Maturity 💎
Finally, there comes a point when a company matures. This can apply to all the different aspects of your business. You have already accumulated enough expertise in dealing with all sorts of issues. Your staff has reached a certain level of experience as well. You have well-established relationships not just within the industry but with your customer base as well.
Congratulations! You've certainly gone far. That said, there are still a lot of things left to do. This is the time to focus on efficiency. Are there business processes that you can further streamline? Are there other opportunities to increase your productivity while potentially decreasing the use of resources?
More importantly, do you still have the spark of entrepreneurship needed to prevent your business from getting stagnant? Interestingly, it is also during this stage that a business can either reinvent itself or decline. As the age-old adage says: the only thing that's permanent is change.
The challenge is how you'll be able to reinvest and adapt to keep your business thriving. Otherwise, it might prove better to just sell it and let it go.
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The Life Cycle of a Business ⚙️
It’s interesting to note how a business can take a life of its own. You might notice that certain brands have distinct personalities much like human beings. They also have a life cycle similar to ours: they are born, struggle, succeed, and mature.
What sets them apart from our life cycle, though, is that they can continue to be reborn for as long as how long its owners are willing to do so. Hence, keep in mind that these stages aren’t always linear. They can be cyclical as well, with stages that can repeat throughout the course of their existence. It is simply up to us to rise up to the challenge and keep them alive. Good luck!
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