Growth In Every Business Stage
Every company goes through the business cycle. And every company experiences growing pains. What is unique are the initiatives, or growth levers, you should focus on and the growth obstacles you should avoid in each stage of the four stages of small business growth.
Understandably eager, small business owners often make the mistake of trying to focus on all of the growth levers at once. Or often they will pull levers reactively and not strategize what levers to use when to achieve successful growth. It’s important to stop and first consider what business stage the company is in to determine the right growth strategy.
What Are The Stages Of The Business Life Cycle
Traditionally, there are four main business stages every company goes through. It is called a business life cycle because companies go through the phases sequentially. And in each phase there are different, pressing business needs.
Identifying Your Company Stage
In order to determine which growth levers to use to achieve small business growth, it is important to first identify which stage your company is in. Pressing business needs are good indicators.
In the early stage, or start up, you are primarily focused on funding and proving the business concept. Probably, you only have a few employees, you have a small amount of revenue, and you aren’t yet making a profit. Your focus is doing whatever it takes to get revenue and maintain cash. Unfortunately this is the phase where most businesses fail. The biggest reasons are lack of cash and lack of demand for the product.
“20% of small businesses fail in the first year.” U.S. Bureau of Labor Statistics
At the next stage, growth, you have proven your business model and have sales and regular customers. Your biggest issue is making sure you have the right resources in the right place. Turn your focus inward to staff higher-level executives and watch out for growth barriers. You can also begin to initiate growth initiatives, like product innovation, that will come to fruition later in this stage and will help you excel through the rest of the business cycle.
“23% of small businesses failed because they didn’t have the right team” U.S. Bureau of Labor Statistics
In expansion stage, or scale, your growth rate accelerates. You have a management team running the day-to-day business and profit is no longer a worry. You have people to get stuff done but you can’t keep up with demand. You will need to have a dual strategy of growing your capabilities internally and externally taking advantage of market expansion opportunities.
14% of small businesses failed because they had poor marketing, ignored customers or got outcompeted. U.S. Bureau of Labor Statistics.
In the mature stage, you will need to focus on the growth assets you have to keep you from going into decline. Often this requires a focus on either expanding through acquisition, niche market strategy, or mergers. You may even decide to start an exit strategy in this stage.
Take this free quiz to determine which of the four stages of small business growth you are in and which growth levers to focus on.
How Do I Manage Growth Through Every Stage?
Achieving exponential growth doesn’t happen by only looking inside or outside your company. It’s a mix of both and includes engaging 8 essential growth levers based on where your company is currently at -- and where you want to go. I generally meet companies at one of two places: their company growth stalled and their decisions are paralyzed by overwhelming options; or they have pulled too many growth levers or at disproportionate times, and now are not actually growing.
Every company I work with starts with my Steph Barry Inc Growth Audit. With my custom, in-depth Growth Audit, you’ll hold in-hand your Steph Barry Inc report with comprehensive insight into your company, including topline of growth opportunities and obstacles that need to be minimized. Your customized report will also include your clear plan of action, including which growth levers to focus on when and how, and the timeline to follow for the growth destination you seek.