A Beginner’s Guide to Business Growth: Start Your Growth Journey with these 5 Stages

So, What exactly does business growth look like in the real world? Honestly, it depends on the business, but in general, there are five steps that businesses tend to go through as they expand and grow over time. Let’s take a closer look at this.

Small business owners and managers who fully understand each stage will analyze challenges and find opportunities for growth.

For example, they’ll be able to identify the most appropriate time to upgrade an existing computer system or to hire and train managers by looking at the business’ projected growth.

The Stage 1 of small business growth is commonly referred to as the existence stage. At this stage, the business has to figure out how to get customers and deliver products or services.

Small businesses in the existence stage include many retail stores, newly opened restaurants, and high- technology manufacturers at early stages of production.

Some companies don’t gain enough customer acceptance or product capability to make it past the existence stage. When this happens, the owner must close or sell the business.

Small businesses that make it past the existence stage move on to stage 2:

Stage 2, or the survival stage, is where the business has proved it has a viable business model and customer acquisition strategy.

The main problem small businesses face in stage 2 is managing revenues and expenses.

There’s always a possibility that a business can fail at this stage if it can’t remain profitable.

If a small business grows in size and becomes profitable during the survival stage, it will move on to Stage 3.

Stage 3, or the success stage, is when owners must decide whether to remain profitable and/or expand their operations to different markets.

The company can stay in the success stage indefinitely, as long as nothing comes along to destroy its market position or competitive advantage.

If a company decides to expand its operations, they will move to Stage 4 or the take-off stage. At this stage, the biggest problems revolve around achieving rapid growth and financing that growth.

At the take-off stage, it’s common for the company’s investors or creditors to replace its founder.

Companies that successfully make it through the take-off stage will move into Stage 5.

Stage 5, or maturity stage, is when the company has the staff and financial resources for detailed operational and strategic planning.

The management is also decentralized, adequately staffed, and experienced. Systems are extensive and well developed.

Companies in Stage 5 are often seen as “successful” companies. For example, Facebook, Google, and IBM are all companies that started in Stage 1 and grew into Stage 5.

Stage 5 companies have advantages of size, financial resources, and managerial talent. If the business can continuously innovate and satisfy its customers, it will be an unstoppable force in the market.