Are you in the process of starting a business? If so, it’s imperative that you have a plan and roadmap in front of you to know where you are headed.
As a new business owner, you need to be aware of the 4 stages of business growth. These will show you where you are as a business and where you need to get to next to continue growing.
If you want to provide a comfortable living for your family, build an asset that you can sell one day, and provide jobs for others in your community, it’s up to you to continue your business growth.
But it doesn’t happen by accident. Everything you need has to be planned and intentional.
So what are the four stages in the business life cycle? Keep reading to learn more about how to go about expanding a business.
- Startup Phase
In phase one, you are in startup mode. If you’re lucky, this stage will only take a year or two. For most, however, startup mode can take many years.
It’s the rockiest time of your business journey. It’s when you work long and hard without actually making a profit. It’s time you spend acquiring new customers, determining if your business actually has the potential to make it over the long term.
For the most part, your goal is to get through each day and make as many sales as possible. This stage is defined by patience, grit, and determination.
Most new business owners don’t make it past this point. In fact, 20% of new businesses close up shop within the first year, while 50% don’t make it five years.
This stage is marked by trying, failing, and trying again. As a business owner, it’s up to you to show up each day with the determination to make it happen. Moving out of this stage doesn’t happen by accident, but it can make all the hard times worth it.
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- Growth Phase
If you stick it out, you can move beyond the startup phase and into the growth phase. Growing a business is a lot more fun when it doesn’t feel like a single failure can put an end to your business.
This phase is marked by a few things. For one, you have enough monthly cash flow to make all of your payments. You aren’t worried about making payroll or rent, as you have some excess cash in the bank, as well as consistent monthly income. Be sure to check out Nash Advisory if you would like to know more about selling a business in Victoria
It’s also marked by reliable team members. Delegation is the key to success. Once you’ve hired people that can handle some of the most important tasks, you can start focusing on increasing business sales rather than day-to-day operations.
With more money coming in each month, it’s up to you to steward it well. Invest in your company by expanding your team, upgrading equipment and efficiencies, and developing systems and processes so that the company could run without you.
- Maturity Phase
If you see year-over-year growth in your business, then you can rest assured, knowing you’ve reached the maturity phase. You have no fears that your business will fail or that your sales will dry up. You actually have predictable annual revenue, which could potentially set your company up to be sold.
You are competent in your marketing team to consistently bring in new clients while also maintaining existing ones. You have managers in place that could run the various departments of your company without you.
The company is no longer dependent on you, and other bottlenecks have been removed as well. If you were to sell the company, step down as CEO, or take an extended vacation, almost no one would notice, and your company would continue to grow.
It’s at this point in your business ownership journey when you need to make a tough call; continue running the company, or sell it, retire early, and maybe start something new.
- Renewal or Decline Phase
As time passes, your industry will change. Over the years, company’s will either enter the decline phase or the renewal phase.
The decline phase is marked by companies that are not forward-thinking. They continue to do things the way that they’ve always done in the past. They aren’t paying attention to the changing economic and business landscape.
They don’t adapt or renew with the changing times. They are the companies that still depend on newspaper ads in the age of social media marketing.
The renewal phase, on the other hand, is when companies are determined to continue growing, even in the midst of industry evolution. When technology, marketing methods, and manufacturing processes become obsolete, renewal-focused company’s find ways to evolve as well.
They are determined to continue meeting customer demands, even if it means changing the way they offer goods and services. They aren’t afraid to replace employees or managers that aren’t willing to adapt. These are the company’s that are going to be around for decades, serving many generations.
Starting Your Business
Are you hoping to start a business as soon as possible but want to know the easiest method of doing so? Starting a franchise eliminates much of the guesswork when starting your own company.
With a franchise, you have a foundation in place from day one. You have a clear path forward, created by others who have gone ahead of you.
And owning a franchise can mean you start earning a profit much sooner than if you were to start a business from scratch. The only problem is that there are so many incredible franchise options to choose from.
Check out this article by Window Medics to learn how to choose the best type of franchise for you.
Finding Success in the 4 Stages of Business Growth
The beginning is the hardest. If you can make it through the first year in the 4 stages of business growth, then you can do anything. You have what it takes to build a successful company.
The hardest part will always be getting started. It’s a long journey but is worth the effort if you can make it to the end.
Looking for more articles like this? Be sure to check out the rest of our blog today to keep reading.
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