Business growth is something all business owners aspire to achieve. Growing the business means a greater opportunity for success, especially for small businesses. Yet there is more to understand about business growth than just what the term sounds like, and if you truly want your attempts at business growth to succeed, you need to have a good understanding of the concept, such as the various stages of business growth. Yes, there are stages to it. For small businesses, there are generally five stages to keep in mind. Hopefully, the following deep dive into the various stages will help you understand business growth better.
This is the stage where you have first started your business and are trying to make it a viable one. You are, at this stage, focused mainly on getting enough of a monthly cash flow coming in that you can break even. This is normal for many companies that are just starting out, but many companies that have been around for years also continue to struggle to break even. Businesses here need to be focused on creating a consistent monthly cash flow so they can eventually move out of this stage and make profits.
There will also be some challenges and opportunities concerning customers. The main challenge will be creating a product or service that people will want. The opportunities will be in finding different ways to draw in customers. Focus on getting customers, both to pay you and to bring in more customers, so you can move forward.
If you have reached this stage, you will have managed to stop breaking even every month and begun to make a profit. You are ready to begin getting an ROI, which means you’re set to expand what you did in Stage 1 and work towards meeting a set profit requirement (a requirement, not a goal).
Your challenge at this stage will be to make a profit; i.e., your revenue is greater than your costs. But more than that, it must be a sustainable profit. Succeed, and you will have a self-sustaining business, which can provide many opportunities, such as working for yourself full-time without worry, the ability to hire staff and give them a living, and the chance to meet new customers and other people in your industry.
Can your business sustain itself without owner intervention? If, so, congratulations! You’ve finally made a self-sustaining business. What next? You can continue the success you have or try to rapidly grow your business into a large corporation. The choice is yours to make.
Your challenge is to do more than merely survive. You want to find new avenues of income to give you a profit margin that will let you put funds back into the business. If you do things right, you have the opportunity to fund future growth, or you can detach yourself from the business, appoint managers to oversee things, and use the money for other things, like a new business venture.
Congratulations! If you’ve done things right in Stage 3, you’ve entered the exciting period of rapid growth, when your business begins to really take off and can potentially become a large company.
The trick, though, will be to make sure your growth doesn’t outpace your assets, resources, and systems.
Your challenge is to have enough funds to invest in growth while keeping a stable cash flow. You will choose wisely what projects you should invest in and which to avoid. Invest in people and systematizing processes while avoiding things that worked at the start but are no longer needed. Done right, you have the opportunity to reach the big leagues, but even if you don’t, you will have still accomplished incredible growth and become a big name in your industry, which can lead to more opportunities.
Congratulations, you’ve reached the final stage. With your rapid growth, you have the chance now to offer related products or services to your existing customers, or to even expand into new markets. You need to do this because eventually, you will reach the point where there is no longer an opportunity for rapid growth and you will need to come up with a way to deal with slowing growth and a stable company. You have the opportunity, as said, to diversify with new products or services, or even buy another business. Or you can just fine-tune what you have in order to deal with the inevitable changes to come in your industry.
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