Stages of Small Business Growth

Modern models of the companies life cycle management point out 5 main stages of small business growth:

• Product development stage (Idea);
• Introduction stage (First steps on the market);
• Product extension stage;
• Growth stage (Rapid growth phase);
• Maturity stage;

Idea

At this stage, business starts its journey to the market. As a rule, owners create their businesses without using the standard behavior model. The modern market requires new ideas generation that allows to provide clients with the real product value and satisfy their needs as much as possible.

Therefore, in this stage, owners and managers make considerable efforts to show to the world a unique and worthy attention product. Besides, the technology which is chosen to reach high rates and develop a product in the future is important too.

There are similar issues since some activities can use standard methods for production. However, more innovative business directions require new approaches and strategies for unique product creation.

To understand whether your idea is worthy of the audience, it is better to consider the business model which will be the best alternative for you. For instance, you can start by creating a business plan.

The business plan will help you define the project goal and tasks accurately, calculate the budget and time needed for its realization and measure risks that you can face. In other words, such analysis helps understand whether your project is worth the investment or not.

In this stage, it is necessary to define the following main points:

• What is the project structure?
• Who is your customer and who should you be aimed at?
• What distinguishes your idea amongst others?
• What is your ballpark budget for this project? You must analyze the key financial performance.

First steps on the market

If you have the workable idea you have to make up a strategy that will allow this product to be sold well. The main goal of this stage is to create a foundation to get profit.

This process can sometimes be exposed to risk as your investments can exceed profits that you get by selling goods. Therefore, at this stage, you have to break your head to decide how to attract investments, create a client base and adjust all processes that will allow your business to pay off, reach a zero level and become steady.

Moreover, it is necessary to pay attention to cash flows. Obviously, you should try to minimize the expenses to avoid negative consequences or considerable monetary losses.

However, at this step, it is necessary to think about a good marketing strategy and allocate your budget to expand your potential clients to balance business activity.

Expansion stage

If you assume that your money is enough to cover expenses and receive at least insignificant profit, you can move towards the following step safely. What does this transition mean?

As a rule, most companies, trying to develop small businesses, recognize that they cannot overcome some market relations barriers. Generally, the truth of the matter is that the companies cannot finance any additional growth, therefore, they stick at the same level.

However, to make business prosperity possible it is necessary not just to put considerable efforts but also look for new ways of effective business processes management and investment attraction. In this case, digital instruments become an excellent alternative to achieve the desired result.

The big share of the small business actively applies various digital platforms that provide sales analysis, statistics output, employees’ progress monitoring and effective projects and tasks management.

On the other hand, it is necessary to take care of business expansion. For example, you can direct a small share of your capital reserves to create and operate some new business directions.

Rapid growth phase

At this key point, you need to figure out whether you want to become one of the market leaders or remain at the maintenance level. Moving to this stage, you are likely to enter the phase of rapid growth.

What advantages will you have?

You will be able to scale the company. It means that you can not only receive more, but also be closer to the goal than ever before. Additional investment generation will allow you to enter the new markets and expand the activity for consumers worldwide.

Besides, if you are not prone to risk, you can become a leader in the field of the city or the region that will increase your business potential too. It will be a big advantage if you use new approaches and management policies to improve business activity and reach new peaks.

In this stage, it is necessary to outline a few points:

• Price policy;
• Figure out how you can improve service for the consumers and what guarantees you can provide;
• Improve resources distribution system for expenses minimization;
• Modify the goods and scale their functionality;
• Simplify user experience with your product.

Maturity stage

This stage is also known as the stabilization stage since you are aimed not at rapid growth rates but their control and management. You need to structure the entire business and define how to continue the development. Generally, business owners can observe the maximum competition this stage. Thus, the main goal that arises here is to reach balance in the market and hold the lead positions among competitors.

To get a decent position at maturity stage you should:

• Increase sales and cooperate with other markets;
• Find new ways of using goods;
• Improve functional product aspects;
• Develop effective marketing policу;
• Apply various modifications of product sales

You can also expand your product possibilities by using other techniques of sales implementation. For example, to not allow your products to lose their importance and value for consumers, you can establish new points of communication with them: develop a digital platform or an online store. It will help advance your relationships with clients to the next level, promote a brand for other consumer categories, and keep up with the latest trends.

If you are looking for the team that develops such tools for business — we are ready to help. Just drop a line and describe your idea!