Business Growth Stages…
Like anything in life, owning a business is a process. The journey that we go on as business owners is a complete rollercoaster – physically and emotionally.
So what are the business growth stages?
Many people wonder about how to achieve business growth, but what needs to be considered and learnt before anything is the business life cycle, and how it works. Each stage represents a different part of the business journey, and where your business is growth wise.
Let’s take a look at the different stages of business growth…
Introduction is the first business growth stage. At this point, you’re just starting your business and getting into your desired market. Sales are likely low as you’re trying to get your name out there, and your cost per customer may be higher.
FInancial losses are quite common during this stage. When first starting, there’s going to be a lot of trial and error. You’ll need to be taking risks – it’s a huge part of being a business owner. But unless you take the risks and try new things, you won’t know what does and doesn’t work for your business. This could be monetary, like your stock orders. Or even things that don’t cost, like social media marketing on Instagram or Facebook.
At this stage you’ll probably have less competitors, until you become bigger within your market and have a stronger brand presence.
Growth is the second stage in the business life cycle. At this point, your sales should be increasing, whilst the cost per customer decreases. Since you’re achieving more sales and gaining customers, you can lower your prices – which will help bring in even more customers.
At this stage of business growth, your profits should be rising as your income increases. Even if you have to spend more for extra stock or general outgoings, it should be balanced out by the amount of sales you’re generating.
As you come into the growth phase, you may notice the amount of competitors you have begun to rise. Continuing to adapt throughout your journey and changing your marketing strategy, business plan, and marketing techniques to suit your client avatar will help set you apart from the competition.
Maturity is the third stage of business growth. Here is where your business is likely to be peaking. But what makes your business peak? It depends on what type of business you actually own. Maybe you own a company mostly based around swimwear, and clothes made for summer – your business is going to peak during hotter months, but may dip during the winter.
At this point your cost per customer should be at its lowest – the more customers, the lower your prices can be, again bringing in more customers.
Profits will be high and your business will be thriving at this point. With a stable number of competitors, it’s important to remember to adapt and tailor your business to stay as unique as possible.
Decline is the final stage of business growth. After your peak, it’s natural for your business to decline, again depending on your type of business, different factors will determine when and why your business goes into recession.
At this point, sales may start to fall, meaning your profits fall too. You may have to be more accommodating to your customers needs than before, since meeting more specific requirements during a decline will help keep sales up.
The decline is a good time to reflect and think about what you can do to start the growth process again. How can you make your business more unique to bring in more sales, and sustain a strong presence? What can you change or adapt to in your business to try to keep your business relevant during a decline?
Let’s take the swimwear brand as an example again. Maybe during the colder months you can release a winter line, since by the time summer comes round again, it’s highly likely there’s going to be brand new competition to compete with. So staying relevant will help customers keep your business in their mind.
What stage of the business life cycle are you at?
Being able to identify what stage you’re at is vital. It helps keep control of your business, and have awareness on what you can do to stay relevant.
Reflection is a huge part of business. So knowing exactly where your business is, reflecting and evaluating will allow you to make changes, and adapt to situations to continuously compete within the market.
It’s a good idea to create your own graph of the business life cycle, and note down during various points of your business journey where you stand at specific times.
It’s also important to note that the business cycle isn’t just one cycle. What I mean by this is even when your business goes into decline, you can always get yourself back on track, and start growing again to get back up to that maturity phase! I’ve spoken about it before, but adaptability is incredibly important when you run your own business. Practising this allows you to keep moving through the cycle, and continuously move up the business growth stages.