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Stages of Small Business Growth and Development

Small Business Owner

There are an endless variety of small businesses on the market today, and with the plethora of products and services offered, it can be hard to imagine that there are predictable stages of growth that all business must go through in order to thrive and flourish.

There are however distinct patterns of growth and development that emerge as a business develops. You will benefit if you can learn to anticipate and work through these pivotal steps as you take your business to the next level. Following proven pathways to success will ensure that you sidestep the many perils and pitfalls that can sabotage your profits. Here are some stages of growth that you can expect to travel through as you climb your way to the top.

Existence Congratulations! You’ve set up your business, and now you are ready to roll. Some of the unique challenges you can expect to see at this stage of growth are increasing your client base and being able to keep up with the demands of growth. Some questions to ask yourself at this stage are:

  • Do we have enough money to cover our operating expenses?

  • Are we making a profit, no matter how small?

  • Can we expand our client base and still maintain our customer support?

  • Are we delivering products and services to customers in a satisfactory manner now?

  • Does our business model seem to be working for both the customers and ourselves?

If you can answer all of these questions with a yes, then you are ready to expand your business beyond the existence phase. Let’s see what opportunities are possible.


Small Business Owners

Your business has now demonstrated that it is a formidable market entity. Customers are routinely satisfied by your delivery, and your client base is steadily growing. Now you must focus on making balancing the relationship between revenue and expenses. The key questions to ask yourself at this stage are:

  • Can we continue to increase our cash flow in a way that allows us to finance greater expansion options?

  • Can we account for unexpected expenses that come up?

  • Can we continue to keep up with supply and demand so that our customers keep coming back for repeat business?

  • Can we continually increase our client base?

Being able to answer these questions affirmatively indicates that you have developed a solid footing in the market. Now let’s move on to more expansive opportunities.

Success At the success stage of your business, you now have enough cash to acquire additional managerial staffing, and you look forward to having some stability in terms of revenue vs. expenditures. A business can stay at this “success” stage for years, making small changes in terms of employees and product offerings. Any major changes must be considered a move toward upward mobility, and eventually a decision must be made as to whether the business remains in this stage, or if business owners make a decision to use excess capital for the purposes of expansion. Systems should be put in place so that a business runs automatically, and business owners learn how to delegate responsibilities to managers that they hire and train as their systems of operation mature. Questions a business owner might ask in the success stage of growth are:

  • Is there enough cash to fund any growth mandated by market trends?

  • Is achieving financial stability in this stage enough of a business goal for me, the owner?

  • Do I know how to hire and effectively train people that can turn my work into an automated system that works for me?

  • What possibilities exist for me to expand beyond my current capabilities?

It is this last question which drives the business owner forward into exploration of more.

Take Off

Small Business Owner

This stage is a critical development in a company’s growth. If a business owner rises to the challenges and demands of a growing company, then the possibility for expansion and profitability will be limitless. A business that fails to take off can usually be a good purchase for investors looking to take a system and develop it further than the current owner’s capabilities will allow. Generally speaking, a business will either fail to take off because cash flow becomes a problem, or the business demand simply outgrows the managerial capabilities of the current owner(s). Here are some things to reflect on when moving through the take off stage:

  • Can I effectively automate my systems and duplicate managerial techniques to distance myself from day to day operations?

  • Can I keep cash flow coming in consistently to meet the growing demands of the business?

  • Can I weather unexpected expenses and market fluctuations and still keep a positive stream of income flowing?

  • Can I set forth a strategic vision for the business as a whole?

If you can envision all of this as a possibility for your business, then you have achieved the next level of growth and success.

Resource Maturity A company experiencing resource maturity has the strategic planning and financial responsibility needed to establish longevity in the marketplace. Systems are in place and functioning smoothly, staffing is competent and capable, and everyone has a shared vision for what the future looks like in the business. The company is poised for rapid growth and expansion, and tomorrow looks bright. You have arrived! Even so, resting on your laurels at this stage is not always a wise decision. Staying ahead of current market trends and looking for other opportunities to expand and enhance your offerings will ensure that you remain sought after for years to come.

Growing a business is one of the most challenging, yet one of the most rewarding career pursuits one can achieve. Having a driving passion big enough to push you through the challenges on the way is the key to success. As Walt Disney so often stated in his own vision of what was possible, “If you can dream it, you can do it”. Stay focused, believe in your vision and what you set out to offer the world, and celebrate the entrepreneurial spirit that burns inside of you!

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