The Five Stages of Small Business Growth

#stagesofbusinessgrowth #businessgrowth #findyourcompass #thefivestages

In a fast paced world, small business owners have the biggest dreams of creating a lifestyle they only dreamed of previously, through the power of entrepreneurship and free enterprise. Nothing in the world is more powerful than that of entrepreneurship.

Today's entrepreneur is faced with a myriad of obstacles and challenges - from inflation, to supply chain issues, geopolitical conflicts etc that affect the very fabric of the business you're building.

While all of those issues are real and must be dealt with, the resolve of an entrepreneur is something to behold.

Saying all that, categorizing the problems and?growth patterns of small businesses?in a systematic way that is useful to entrepreneurs seems at first glance a hopeless task. Small businesses vary widely in size and capacity for growth. They are characterized by independence of action, differing organizational structures, and varied management styles.

To be successful in business and creating a generational impact, we must understand the inherent journey of a business and identify where you are and what can be done to improve how you're able to create impact with your vision, products and services and the like.

Today, I want to outline the 5 areas of business growth so you have a working framework of these stages and how you can plan effectively to move forward through to business growth and ultimate success that you seek.

The Five Stages of Business Growth

Stage I: Foundational Existence

In this stage the main problems of the business are obtaining customers and delivering the product or service you are delivering. Among the key questions are the following:

Can we get enough customers/clients, deliver our products, and provide services well enough to become a viable business? Do we have a market for our products and services?

Can we expand from that one key customer and build new verticals to expand our reach in the marketplace?

Stage II: I will SURVIVE! (Survival)

In reaching this stage, the business has demonstrated that it is a progressive enterprise. It has enough customers and satisfies them sufficiently with its products or services to keep them. The key problem thus shifts from mere existence to the relationship between revenues and expenses. The main issue is....

• Can we, at a minimum, generate enough cash flow to stay in business and to finance growth to a size that is sufficiently large, given our industry and market niche, to earn an economic return on our productive output?

Stage III: Growth

The decision facing owners at this stage is whether to exploit the company’s accomplishments and expand or keep the company stable and profitable, providing a base for alternative owner activities.

As the business matures, it and the owner increasingly move apart, to some extent because of the owner’s activities elsewhere and to some extent because of the presence of other managers. Here at this stage, SYSTEMS must be rock solid and in that, must provide for higher levels of efficiency with the ability to plug in the right people to run those systems effectively.

Stage IV: Maturity / HyperGrowth

In this stage the key problems are how to grow rapidly and how to finance that growth. The most important questions, then, are in the following area:

Can the business owner delegate - is he/she too managerial on the growth of the enterprise OR does he/she see themselves as the leader? The leader runs a vision, a playbook of sorts and the right pieces run the plays in the playbook. Businesses that achieve strong growth have owners that KNOW how to delegate effectively, giving them the power of freeing up time to expand the vision.

Stage V: Transfer

The greatest concerns of a company entering this stage are:

1. How long do I endeavor to hold on to this? What is my way out of this and whom would want this enterprise or is ready to assume the role of being a leader in this enterprise?

A formal succession plan must be a priority and in that there a number of things that must be taken into consideration:

Do I have a named potential successor owner?

How much is the business worth?

What are my plans post succession?

and much more to consider...

My word of wisdom is to consider these factors and develop a team of professionals that can assist you with this. My team and I specialize in working with business owners and the aspect of succession planning. We'd be honored to assist you if you have questions in this space.

As you can see these five stages present a unique set of challenges. In these challenges, present opportunity for growth, introspection and legacy.

As business owners, we have a wonderful responsibiltity of each one teach one.

Join groups like Vistage or Tiger 21 to get the maximum level of growth out of your investment in time, energy and money. These are powerful forums that I highly consider looking into for your business success and overall knowledge base - in addition to the networking opportunities with other trailblazers.

If you like this post, take the time to leave a comment and share it, using the hashtag #findyourcompass

Today and everyday is our day to be great! Let's great a legacy of success from generation to generation through our ideas and our passions.

I'm honored to be part of it and I know this is just the beginning. Let's expand your COMPASS!

To your growth,

-Roger