The 5 different stages of business growth–and why you need to know them

Business owners often talk about how one of their goals is to grow their business and become successful–but do they really know what growth entails and what is expected of them?

The 5 different stages of business growth–and why you need to know them

Business owners often talk about how one of their goals is to grow their business and become successful–but do they really know what growth entails and what is expected of them?

The best way to explain it is to break it down into five stages of business growth. That way you can determine where you are, where you want to be and how you’re going to go about getting there.

Growth is not just something you “feel” is happening, it’s something that you need to document and keep track of so you can compare where you are now to where you began. Seeing the differences in revenue, buyer’s trust, and capacity will help you understand just how much you’ve grown over a specified time frame.

Seeing proof of your development from where you started to where you currently are will help you make informed decisions on whether or not it’s time for you to take your business to the next level. Business evolution is all about leveraging business growth to fuel your next endeavour. The risk is reduced if your recent growth provides a cushion to tide you over during the transition.

What you’re not told about growing a business

While there are plenty of inspirational quotes on business growth, they usually gloss over the challenges you face and focus on outcomes. It’s not exactly appealing to bring up every aspect of what growing a business is like, especially the parts that aren’t attractive, but this is real life and knowing the truth of what’s ahead can make all the difference in your preparation.

Here are some things people never talk about when it comes to growing a business:

• It can be lonely - While you will have your staff, family and friends cheering you on, none of them will really understand your unique position. You’re the one at the helm and that can feel isolating.
• It can be uncertain - While you can analyse the data to help make your decision, there is no guarantee that growth will come. You have to take a leap of faith, and you have all those people depending on it working out. Not knowing what the future holds can be daunting.
• There is no overnight success - It sounds like age-old advice, but it really is true–don’t expect things to accelerate the day after you feel you’ve made a good move, it’s all a process.
• It won’t always be secure - Even when it’s going well you never know what could go wrong, especially as the one who has to make the major decisions. Your employees will be adjusting to the moves you make rather than having to figure out the best course of action, putting a lot of pressure on you.

While these are true, there are also plenty of positives to growing a business, like:

• You learn problem-solving - When it comes to complex situations, you’ll be able to break them down into smaller, more manageable problems and then work your way up to addressing the bigger picture.
• You get to collaborate - You’ll be able to find like-minded, passionate people who believe in your idea and want you to succeed. These people will collaborate with you, brainstorm with you and contribute valuable ideas to how you can better your business.
• You’ll figure out the right systems that work for you - As you work out more of your processes and how you operate, you’re going to find methods that work best for you and your business. This helps boost your confidence and gives you a better idea of how to go about things in the future.
• You’ll develop the skill and the attitude needed to face challenges - You toughen up and grow more resilient when you overcome hurdles and face challenges, developing the right mental fortitude to take on even bigger challenges that will come along.
• You’ll be more open to change - Growth is all about a positive mindset and being eager to accept change and the influence it will have on your business direction.

It can be daunting to face business growth that will fundamentally change how your business operates, but keeping these things in mind will help you better adjust and adapt.
Signs you’re growing into a new stage of business development.

While there is no exact moment when you can predict that you are standing on the precipice of successful business growth, there are some telltale signs that you and your business are ready to grow and evolve:

• You’re getting regular customers - Having loyal, repeat customers can help you secure a steady stream of income. Repeat customers are valuable because they know your business and what you offer, and are living testament to how effective your products and services are.
• You’re experiencing a surge of clients/business - There are situations where you may be getting more business than expected and you need to expand to accommodate the influx of new customers.
• Profit is stable and even growing - Once you’re hitting a base level of income that’s steady or even more than what you normally make, the extra you’re earning can be used to boost your business and take on the expansion you’re striving towards.
• The industry is evolving - If everyone else in your industry is starting to pick up speed, you don’t want to be left behind. If your industry is making gains, it’s a good sign that you also need to start planning ahead for bigger things.

5 different stages of growing your business

Growing your business doesn’t come in one fell swoop, it’s a process that’s broken down into five unique stages that you can take at your own speed. To help make this as easy as possible, make sure you have the proper processes in place, a good team that will help you with your projected expansion and the space necessary to accommodate your team and business growth.

1. Existence

Conceptualising a business is one thing, figuring out if it's feasible and profitable is another. If you can’t execute your business idea, it won’t pass the existence stage.

Start out slowly and find your footing in terms of stable and sustainable business processes that will give you cost-effective ways to manage the products or services that your target market will purchase.

The most common problem at this stage is start-up revenue. A lot of experimentation goes on at this stage, so don’t be afraid to try out different options and processes to nail the one that works best. If there’s a time to explore, this is the stage to do it because you can fail fast and fail cheap and bounce back.

2. Survival

In this stage, your main objective is to establish your customer base. It’s best to seek out a balance of new and returning customers, which will help you move from merely existing to long-term survival.

You know you are ready for the survival stage when you are able to keep a stable cash flow. Having months where you skyrocket sporadically isn’t the best indicator of growth because you can’t replicate this or rely on these figures to support you. If you’re hitting or exceeding your mark regularly, it can indicate you are ready for expansion.

Businesses often stay in this stage a while, earning marginal returns while figuring out a rhythm that works.

3. Success

The success stage is split into two:

1. The success-disengagement stage
2. The success-growth stage

The success-disengagement stage is when the business reaches a good amount of profit not just to survive, but to thrive. A lot of companies remain in this stage because they can stay stable and earn a ton of profit doing the same thing. As long as the industry itself doesn’t change very much, you could remain at this stage and earn a stable income for years.

The success-growth stage, on the other hand, is when your business uses its newfound stability and market position as leverage to try new things and possibly become even bigger. Innovating at this stage is crucial in order to change things up and find even more avenues for success. If a business doesn’t succeed with its efforts in this stage, it may go back down to the success-disengagement stage or the survival stage.

Throughout either success stage, there’d already be significant growth in revenue and even company size, so you need to adjust some protocols and even allocate additional space and materials to accommodate that growth.

4. Take off

This stage is where the business “takes off” or skyrockets in sales and revenue.

Here, you have the opportunity to go from SME to full-fledged big business and a leader in your industry. You’re no longer operating for just a small fraction of your market, but a huge chunk. You become the preference of your target audience over other similar businesses and your name is more of a household name.

The challenge here is figuring out how to manage everything and to earn enough to finance the dramatic growth. This comes with overhauls in terms of your business space and size because you’re no longer operating at the SME level.

Mistakes at this stage can be costly and expensive–literally–so it’s best to prepare yourself for the challenges ahead or you may have to go back a stage or two.

5. Resource maturity

This is when your company approaches its maximum size.

At this stage, you are the leader -or one of the leaders- in your industry, and you’re comfortable with the revenue you’re earning, are able to manage everything because you’ve made sufficient changes to your space and materials and you’re allocating profit well. You are stable and can support new endeavours without having to worry about budgets.

The challenge in this stage is not as urgent as the others–it’s more about adjusting to different environmental changes within the industry. Compared to earlier stages, these changes won’t be as difficult to handle because you now have a steady footing and the money needed to address them.

With growth comes the need for more room, to accommodate your growing staff numbers and heightened production. It’s not just about size and capacity but also location, staff wellbeing and offering them work-life balance incentives to make that transition smooth and easy.

Business growth isn’t just something you arbitrarily feel, it’s something you need to track, take note of and respond to accordingly. Following a proven plan with accuracy and consistency will help you accelerate your growth and focus on how you can make the best of it in terms of new campaigns, hiring new staff or fine-tuning production to maximise profit. Make sure you take the time to find your footing and be confident in each stage before removing on to the next.

Every business that looks to grow needs to be prepared to accommodate that growth. They’ll need adequate resources and a professional space that can be customised to suit their current stage of expansion. As well as the physical space, it’s important to look for features that will provide support for a growing business brand to help them bolster morale and increase momentum. Coworking spaces are a fantastic option for businesses looking to catapult and expand, because they can adjust for your business at every stage and have features and opportunities no rented space can offer.

No matter what stage of growth your business is currently experiencing, we’re happy to accommodate your business needs with flexibility and support to get you to the next stage.

Book a tour with us to see how our space will help you business grow.