Starting and finishing strong in business is a mammoth task to say the least.
Recent studies show that only over 30 percent of private companies make it past the ten-year mark, and only half survive the first five years.
So what’s the problem, and how do we overcome it? Businesses go through growth stages that come with unique opportunities and challenges. Owners need to be aware of these and strategize accordingly to thrive.
My portfolio includes multiple businesses I’ve built and continue to run today. I want to help you make it in the long run, too, by explaining the seven stages of business growth so you can better plan for your company’s future.
TL;DR – Stages of Growth in Business
What stage of growth is your business in?
Let me help you figure it out by elaborating on the following stages in this article:
- Conception
- Startup
- Early
- Growth
- Expansion
- Maturity
- Innovation
If you’re struggling to keep up with the pace of your business or are feeling stuck, I’m here to help you make scaling your business simpler.
I’ve built businesses using solid and proven processes–from hiring to bookkeeping to marketing–which you can use for your company. Set up a call with me today, and let’s elevate your business together.
Why Entrepreneurs Must Understand Business Stages
If you look at a business’s big picture, zoom in, and scrutinize how it goes from conception to success, you’ll find that it’s not a linear process.
It goes through various stages, each of which has different challenges and needs. When understood, they can help entrepreneurs like you strategize effectively, mitigate risks, and know where to focus your resources.
Key Factors Influencing Business Growth
Every company is unique, but these are common factors that affect growth and performance:
- Management: A company’s owner often functions as its manager and leader, which means your active participation, experience, background, and even personality impact how your business performs.
This is especially true for smaller businesses or startups, where owners play a larger role in management and operations.
- Key people: The people you build your business with can either propel you to exponential growth or hold you down. If you want to make it big, pick people who:
- Have expertise: Are they doing what they’re good at? What’s their track record?
- Hold shared values: Do you look eye-to-eye on crucial aspects of business? Are they willing to be held accountable? What’s their work ethic?
- Maintain great relationships: Does their network enrich or benefit your business?
- Internal processes: Don’t underestimate how internal systems affect the overall business. The quality of your internal processes shines through your customer-facing aspects, like your tangible products and customer service.
- Finances: Your bottom line should not be your company’s ultimate goal, but it should come in at a close second. A healthy business needs sound financial planning and management.
The 7 Stages of Business Growth
Let me explain the phases of business growth, so you can better identify where your business fits and how you can move forward.
1. Conception
At this stage, you will be brainstorming, researching, and planning your business.
You will likely begin with a question that goes like this, “What can I do to make life easier for people?” The answer to this is your business idea.
You can further develop that idea by drawing up a startup plan that outlines the following:
- Market demand: Are there other companies that provide the service or product I’m creating? Is there an observable demand for it? What is the evidence for that demand?
- Market fit: Assess the competition and your possible niche based on your expertise and background.
- Resources: Examine the resources, time, and people you need to make this business happen.
2. Startup
The early, messy, yet exciting days of “office” work on the kitchen table when you’ve just launched are some of the most exhilarating parts of building a company.
But they’re also some of the most challenging.
The startup phase is focused on survival–you’ve got your foot in the door, and now you want your leg in there as well. You’re also finding out that competition is much tougher than you initially thought, and you’d need to work longer hours to make sure the whole thing doesn’t crumble.
Funding is a major concern at this stage, so most of your time will be spent talking to potential investors.
3. Early
Things are picking up by this stage, but you’re not quite there yet. You’re seeing a hint of what your business can become if things pan out well.
Since you’re slowly but steadily building a customer base, it also means you need to start building a team, if you don’t already have one.
You need to delegate to people you can trust and who align with you on strategy, direction, and values. Since you’re bringing in more people, now is the time to clarify your mission and vision, branding, and message.
4. Growth
If your competitors didn’t know you existed, they do know. Your company is growing at an impressive rate, and cash flow is at an all-time high.
Many startups focus on further growth at this point, which means much of the money coming in will be invested into product development, market research, marketing, and other efforts that attract a wider audience and foster stability.
The rapid growth, however, can also bring in a whole host of new problems, like gaps in internal processes and unchecked spending.
If you’re noticing issues at this point, I can help you create actionable strategies to effectively scale your business by automating systems and shaping a team of A talents.
Book a call with me to discover how we can collaborate.
5. Expansion
Once the intensity of rapid growth has passed, it gives way to expansion. At this stage, you’ll be enlarging your footprint in your industry by:
- Exploring new markets
- Developing new products or services
- Expanding operations
- Forming partnerships with other businesses
Your main aim during this phase is market dominance.
6. Maturity
Your business has reached maturity once growth has begun to level off, showing slower but steadier revenue patterns.
This time, you’ll be focusing your efforts on maintaining stability through:
- Maximizing your profits: Cost-effective processes, like qualifying suppliers that provide more favorable arrangements and automating systems, will help you stretch your profit margins.
- Expanding the management force: You will now have the resources to complete your management team and ensure that all aspects of business are running smoothly.
- Strengthening customer relationships: Unlike previous periods of sharp growth, your business will have a robust customer base at this stage. Your main concern is keeping your customers satisfied so they become loyal to your brand.
7. Innovation
If you’ve reached this stage, you’ve succeeded in establishing yourself in your industry.
The challenge now is ensuring you stay relevant despite factors outside your control, such as changes in the market landscape, which is a tough task for even the best, most well-known companies.
The goal here, therefore, is to innovate. This means:
- Identifying ways to keep your brand fresh
- Forming strategic partnerships with other businesses
- Revitalizing your messaging to keep your value proposition engaging and relevant to your audience
Companies that fail to do this eventually experience a decline or, worse, go out of business.
Thankfully, that doesn’t have to be you. I’ve built a business mentorship program from my years of building and growing multiple B2B businesses so your business can scale with ease.
Common Challenges Owners Face in Each Stage
You can make growing your business as smooth as possible by knowing what’s up ahead at various business stages:
1. Conception
- Cognitive bias can make a business idea seem more exciting or in demand than it is.
2. Startup
- During this stage, you’re most likely doing everything yourself.
- Systems aren’t yet in place, which means processes can be confusing and ineffective.
- Perfecting your pitch and finding the right investors can be difficult, especially in a saturated market.
3. Early
- It can take months to put together a team you can trust to grow your business with you.
- You’re gaining new clients but not nearly as many as you should–yet.
4. Growth
- The rapid growth can create problems you don’t have the resources or the time to deal with properly.
- There’s always the risk–and temptation–of sacrificing quality to meet a significantly higher demand.
5. Expansion
- Transitioning from a small team to a full-blown operation means more complicated processes.
- Branching out to new markets can blur your focus.
- Your financial exposure is higher.
6. Maturity
- It’s easy to become inflexible, such as using business models that become ineffective as the market evolves.
- Owners can become reactive when it comes to managing talent and don’t encourage career growth.
7. Innovation
- Maximizing profit can be tough to balance with finding new ways to stay relevant.
- Competition can become fiercer as customers get enticed by offerings from other companies.
Winning Strategies Across Different Stages of Business Growth
With so many challenges to face, how do you make sure you’re coming out of each stage stronger? Consider these tips:
1. Conception
- Study your marketplace, competition, and opportunities to determine market fit. Be realistic about the possibilities of breaking through.
2. Startup
- Seek advice from experienced mentors, especially as you prepare for the explosive growth ahead.
- Establish a clear and compelling value proposition that highlights your edge.
3. Early
- Get aggressive with marketing. Let people know you exist by using advertising, marketing, and SEO to get in front of your audience.
- Pool prospects and build a key team early. Use your network to find like-minded people with the track record to back up their resumes.
4. Growth
- Set up scalable processes that let you streamline and automate operations.
- Spot gaps before they cause problems by running regular audits and implementing checks at various customer touchpoints.
5. Expansion
- Delegate tasks or consider outsourcing. Make sure to have a hiring process that allows you to vet candidates and hire only the cream of the crop.
- Create a clear transition strategy.
6. Maturity
- Use market research to develop strategies that cater to changing market demands and foster customer loyalty.
- Establish a talent retention strategy that evolves as the company grows.
7. Innovation
- Foster a culture of creativity and flexibility that begins with the management team.
- Ready a pipeline of new products or services that keep your brand fresh.
Grow Your Business by Reaching the Right Audience
In four years, I’ve scaled a company I co-founded from $5,000 to $12 million in yearly revenue. You can do the same by reaching your ideal customers.
Promote your business to my community of over 50,000 entrepreneurs when you partner with me.
Your sponsorship will give you:
- A featured spot in my weekly newsletter
- 1 LinkedIn post reaching over 35,000 followers
- 1 Instagram post reaching over 5,000 followers
- 1 Facebook post reaching over 10,000 followers
I can also:
- Simplify entrepreneurship for you with free business resources, such as my Organic Marketing Blueprint and my Monthly Finance Meeting Agenda.
- Get bookkeeping off your plate with EcomBalance.
- Plug my proven hiring process into your business with Outsource School.
- Build a solid SEO strategy to drive quality traffic and generate more leads with TrioSEO.
Frequently Asked Questions (FAQs)
Learn more about the seven stages of company growth with these FAQs:
Are the Stages of Growth for Small Businesses Different?
The stages of growth for a small business look slightly different:
- Existence: Focuses on acquiring customers.
- Survival: Owners are concerned with maintaining healthy cash flow and staying afloat.
- Success: The main concern is whether to prepare for rapid growth or keep the company stable.
- Take-off: Period of rapid growth.
- Maturity: The company has enough resources to manage the gains brought on by the take-off stage.
What Resources Are Available to Help Navigate Business Growth Stages?
Some of the most useful resources when navigating growth stages are:
- Market research: Changes in the market landscape will affect your business at various stages of growth. You need accurate market analysis to strategize accordingly.
- Industry databases: Industry data can help you improve your processes and examine business performance.
- Network: Leverage your community to access resources from other entrepreneurs and experts.
Need business advice? I share proven systems, strategies, and tips from my experience scaling a business to $12 million ARR and building multiple B2B companies. Join my newsletter now!
At What Stage of Growth is a Business Profitable With Enough Money to Reinvest Into the Company?
Once your business reaches maturity, you will have enough resources to not only maintain stability but also invest in further growth.
How Do Market Trends Impact Each Stage of Business Growth?
Market trends significantly affect customer behavior, demand, and the competitive landscape. Considering these changes is key to thriving at various stages of growth.
Conclusion
Your business will go through seven stages of growth. You need to ace each one to thrive, especially in a highly competitive market.
To do that, you need to be creative, flexible, and realistic.
During the early stages, know where you’re going, and be clear about the path to take to get there. As business picks up, prepare for the slow but steady maturity phase, while maintaining an entrepreneurial spirit that keeps you creating new, exciting ideas.
You can also scale much faster by simplifying your business processes so key (but repetitive) aspects of operations don’t hold you back.
Book a call with me to grow your business with systems that helped me scale multiple businesses.