Growing a business is no easy feat. It takes hard work, persistence, and a dash of entrepreneurial spirit to make it through the highs and lows of scaling up. But the benefits of succeeding in this challenging journey are plentiful.
When you are just starting up, or perhaps an established business owner, it is easy to feel lost and overwhelmed sometimes.
Many entrepreneurs find themselves stuck in the mud, lacking clear directions and struggling to keep their heads above water, while others manage to climb their way to success.
Fortunately, you don’t have to navigate this journey alone. As your business expands, you’ll encounter a series of common growth stages, from striving to thriving your business from good to great, breaking through to the next level of success can feel like an insurmountable task. Every company faces similar challenges along the way.
That’s why, in this blog post, we’ll explore the six stages of business growth that every entrepreneur needs to know. By understanding these phases, you’ll be better equipped to plan and execute your growth strategy, and set your business up for long-term success. So, let’s dive in!
Growth Stage 1: The Nightmare Phase
The first stage of your business’s growth is the nightmare phase. At this stage, you might not know what you’re doing. You can’t even say whether or not you will be successful.
This stage is all about Chaos (if you don’t have a business plan! – click here to read an article I wrote about business planning
To quantum leap this stage, you must plan, plan, and plan!
Find out how much money you’ll need to fund your business launch: To pay expenses like outgoings, rent, payroll, and marketing so your company can survive long enough for anyone else (including yourself) to get paid and have stable cash flow. You will also need to consider lead generation, sales conversion, customer journey, HR recruitment and talent retention strategy.
Growth Stage 2: The Survival Phase
The phrase – “Do whatever it takes to make it work!” very well sums up the Survival phase.
A typical attitude might be the inclination to “Work more for less”, “offer lower price”, and accept/take on any clients you can find.
You are still trying to get your business off the ground. You have a few customers but don’t have much revenue to expand your HR team.
In this stage, you are trying to figure out how to get MORE customers, more sales, more money, and deliver services to make them happy campers!
As obvious as it may sound, you need to invest in marketing: advertising, promotion, Google & Facebook Ads; create Sales funnels, affiliated/ agent marketing, and apply social media strategy.
The final tip for stage 2, depending on what you are selling, is to offer a handful of products or services to test the best-selling services (or products) and cut down on the low-performing offers in the next few months. Apply the 80/2o principle.
Growth Stage 3: Maturity – The Growth Phase
The third stage is where your business starts to generate lots of sales! And sales equals cash $$$.
Not necessarily a bigger team, but you made it through; you now feel abundance towards your cash flow and net profit. You are ecstatic and feel on top of the world.
However, you are finding yourself working six to seven days a week and 10+ hours a day and paying lots of taxes! And not just that, you have to answer your mobile after hours, on the weekend, while you’re on break, while you’re on holiday, or having family gatherings.
This is the time to switch gear.
And this is the stage where you have to digitise your business model, systemise your processes, re-engineer your workflows, and uplevel your talents in your workplace to accommodate the next level of demand and pressure.
Hiring new staff or replacing the old ones is not a sustainable strategy because your business framework (your business chassis) is old and obsolete – based on an expired 3 to 5 years workflow that has catapulted your business successfully.
To create profitable growth in your business, you need the next-level business framework, which requires you to digitise your business processes, systemise your HR, and implement some cost-effective business technologies and software into your business to make it more efficient and productive.
If you’re thinking of simply hiring more people or splurging on unnecessary expenses to ease the burden of taxes and time constraints, think again. This mindset may lead to two common tendencies:
Firstly, you might engage in massive recruitment with no productivity strategies in place. This can result in unclear job descriptions, lack of KPIs, poor interview processes, and reliance on blind luck to pick the best candidate. Ultimately, your old business model may not be able to accommodate the new hires, leading to employee turnover.
Secondly, you may indulge in unnecessary spending, such as buying or leasing a new car or going on a shopping spree, which can result in accumulating unhealthy debt.
While it may feel good to see your business progress, if constructive steps aren’t taken soon, you may find yourself nearing burnout – keeping afloat to pay the bad debt.
Instead, consider implementing strategies to improve productivity and streamline operations to handle the increased demand, such as digitising processes, systemising HR, and incorporating the latest technology and software. This will not only ensure the sustainability of your business but also set you up for long-term success.
Growth Stage 4: The Systemise & Scale Phase
In this stage, your sales are steady, but your payroll is massive, and your monthly net profit is suffering as a result.
While you’ve successfully identified your customers’ needs and improved your products and services, you struggle to manage your growing team and their productivity.
To address these issues, it’s time to systemise your business processes to optimise productivity. This is where a business expert or consultant can be invaluable in helping you formulate a strategic plan, develop systems for managing your operations, and identify and tackle business challenges.
Whether you’re looking to re-engineer and scale your business for better profits, a business expert’s contribution is well worth the investment. With their help, you can create a profitable, turnkey business that operates efficiently and sustains growth in the long term. Some of the tasks they can help are as follows:-
- Develop systems that allow you to manage your extensive operation
- Work with you to formulate your strategic plan
- Unknots challenges in your business
- Help you create a turnkey profit-making business.
Growth Stage 5: Exiting Phase
Here are some of the situations that might make a business owner ponder on the idea of exiting their business: –
- The owner has grown tired and feels mundane about the business
- The business is no longer profitable
- The business is draining their life-force
- Argument with work/life balance with spouse
- Cash-out – as it is time to sell and pass on the baton
- Getting bored (or sick of) with the business/ industry and wishing to move on to another company, industry, or area.
- Divorce, marriage issues, death, and health-related issue
And the next few questions would be – How much can you sell it? are you ready, is the business ready for sale? – financial, systems, client base.
In case you’re wondering the following questions, we got a few business attractiveness and (or life) readiness assessments that we analyse and identify opportunities that empower your business to exit profitably. Click on this link to learn more.
The next pondering question is – why not just find a business broker to give me all the answers?
And you end up finding a couple of business brokers to give you the appraisal on the sale of your business.
The problem with a business broker is that their No#1. priority is to sell your business to meet its KPIs. They do not give expert advice on business growth or marketing, nor will coach and guide you to maximise the value of your business. You need a business expert to help you with business value maximisation.
Business expert (coach, advisor, or consultant) who possesses experience in exit planning: been there and done and has walked the walk, will help groom and package your business for the maximum selling price.
Once you have determined all these things, it is time to think about what kind of exit strategy would work best for you and your company.
- Sell your business in its entirety and move on
- Sell a large portion of it and keep a small share
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Growth Stage 6: The Tragedy (or the Thrive) Phase
Not every business was sold with a profit.
Sometimes, small business owners file for bankruptcy or are forced to shut down their business before the debt consumes their equity in their family home.
At times, some business owners were happy enough to transfer the business to a buyer with little to no money down, just to be freed from monthly outgoings.
Without proper exit planning & strategy, a business owner either walk the path of tragedy or build a thriving direction.
I highly recommend you speak to a business expert before you put yourself in this situation.
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Important Takeaway
The business growth cycle is a roadmap that every business follows as it grows. It’s important to remember that success doesn’t come overnight and will require hard work and determination.
As discussed earlier, the growth cycle consists of six stages that every business goes through to accelerate growth and reach its goals. Although not every company will progress through the stages in the same order, each phase is essential to becoming a profitable and successful business.
To increase your chances of success, consider seeking guidance from a business expert who can help you navigate each stage and achieve your business goals.
If you want to understand how you can apply the six stages of business Growth into your operation, join the Workshop or The Mastermind group to learn more about strategies and frameworks to build on your business success. See the Information below.
