The Five Stages of Small Business Growth
The growth of a small business must start somewhere. Whether you’re a business owner who wants to increase profitability or expand your business to other areas, that starting point might seem a little bit complicated.
Would you start with hiring more staff? Does a business plan sound like a good idea? What if you took too much time that you missed several opportunities to grow your business?
Fret not. This article will guide you on the five stages that you need to build your small business. This list will provide you the things you need to consider first before expanding, and the challenges that you might encounter.
The first thing you need to consider is the market and/or your customers. As a business owner, you should know that customers stick to products they felt as authentic and sincere. They need to feel that what they got is exactly what they paid for.
Ask yourself if you can get enough customers and expand your audience. Can you deliver what you promised to your customers? Do you have enough money to cover the demands of the start-up phase?
If you answered yes to those questions, then you’re set on expanding your business. When your business failed to gather enough customers and product capability, your business will fail. It’ll end up closing down when the capital runs out, and you might eventually sell your business for good.
Once you reached the survival stage, you should ask yourself whether the business established itself with your customers. The key problem now shifts from attracting more customers to the balance between revenue and expenses.
At this stage, you’ll find yourself asking if you can generate enough revenue to keep the business growing, and how much. You also need to assess if you can generate income for the sustainability, growth, and development of your business.
This step is very important since your business will have the capacity to grow not just in size but in profitability as well. You can also choose to remain at this stage for a long time until you’re sure that you’re ready to expand your business.
At this stage, you’ll face a decision whether to expand your business by exploiting all your accomplishments or keep it steady and let your business maintain its stability. Of course, you need to assess the pros and cons of each situation until you’ve come up with a reasonable solution. One is a high-risk high-reward route while the other follows the “slowly but surely” catchphrase.
You can also start other enterprises while focusing on your small business, or you can pursue other passions in life. Regardless of what you choose, maintaining the business must be your topmost priority.
Your business is stable. It’s earning decently and it’s appealing to your customers. Now, at Stage 4, you need to determine how to grow your business rapidly without spending too much money and effort.
You have to assess if you need further manpower to help you with administrative tasks or if you can pass your job to others. You also need to consider if your business can sustain the financial demands of business growth.
This stage is a make-or-break situation. When all things fall into their proper places, you’ll see your business dominating the market. Otherwise, you’ll witness your business crumble into smaller pieces. Careful planning and assessments must be done to overcome this stage.
At this stage, the business is highly established and well-experienced already. The systems are independent and organized, capable of doing their job with minimal supervision. The business has enough resources to sustain itself and the demands of the market.
However, the problem now shifts to the capability of the business to innovate and improve their products. The environment constantly changes, and businesses must be able to adapt to survive and become successful in the long run. If your business fails to meet the requirements of its time, then it’ll start to crash and fail.
In summary, we can summarize the five stages of small business growth into existence, survival, success, take-off, and resource maturity. To expand your business, you need to consider each of these steps and apply it to your business in order to identify what you might need to do to progress past your current stage.
If you’re committed to growing your business, we are experts at identifying which stage you in and finding opportunities for you breakthrough that ceiling that you keep hitting.
Schedule a short call (<15 minutes) to identify your biggest opportunity for growth.