The 4 Stages of Small Business Growth
Business, like the economy that drives it, is cyclical. There are many models, but economists generally agree that all businesses go through stages ranging from survival to growth to maturity… and often repeat the process.
Understanding the stages can help you anticipate — and prepare for — what’s next.
This phase requires superhuman endurance, substantial infusions of cash, and a network of mentors and supporters. At this stage, you don’t need a company car; you need an effective business plan.
This is the mom-and-pop stage. You have survived the startup and now need to assess your ongoing financial needs and operational structure. Cash forecasting and human resource development are important considerations at this stage.
You have made a name for yourself and are generating a profit. Managing your finances becomes a strategic planning endeavor at this point, as you will need additional funding for growth and to remain competitive.
The biggest risk to mature companies is a lack of agility. Being able to adapt to new technologies, new marketing channels, and the changing demographics of your customer base is essential for longevity.
At every stage, it is vital that a business revisit its business plan to continually respond to economic and other factors that can affect the next 3-5 years.