We often talk about business growth, but there’s a big difference between theory and practice.
In this episode we look at the stages of business growth, including what’s involved in each, whether growth is right for your business and why planning is key.
We discuss:
- The five stages of business growth
- The challenges of each stage
- How to plan for the next growth stage in your business
Big business dreams
Most people enter the world of business with high hopes and big dreams. However, the concept of “big” varies greatly from one person to another.
A study by the Harvard Business Review found there are five stages of business growth applicable across industries and company sizes…
Existence
This is the stage where a business has proven it can generate a viable income stream rather than depleting initial capital.
Reaching this phase means the business is still operational after using up its initial investments. It’s a moment for self-congratulation and recognition of initial success.
Survival
Having proven its existence, a business enters the survival stage. At this point, businesses have a choice: remain at breakeven or just above, or generate enough revenue to fund further growth. Successful navigation of this stage sets the groundwork for the next phase.
Success
Success varies significantly from person to person. For a business, it typically means yielding solid returns and surpassing the break-even point achieved during the survival phase.
Business owners must then decide whether to maintain the status quo or pursue further growth. The latter involves stepping away from daily operations and focusing on strategic planning to ensure the business can operate independently.
Takeoff
Referred to as “takeoff” by the Harvard Business Review, this stage involves sustained and often rapid growth.
Managing such growth requires a clear and detailed plan, including key systems and procedures. Constant monitoring is essential to ensure operations run smoothly, allowing business owners to delegate daily responsibilities.
Maturity
In the maturity stage, a business enjoys stability, proven experience, and market recognition. However, challenges still abound.
Staying focused on future opportunities and maintaining a competitive edge is crucial. Continuous planning and strategic thinking are necessary to navigate these challenges and leverage new opportunities.
The Importance of Planning
The concept of five stages simplifies the business growth process. However, making it practical in the real world hinges on effective planning.
A sound plan should be relevant, workable, and identify barriers. Most importantly, it should outline key activities for achieving desired outcomes.
A well-crafted plan enables quick and sustained progress. Conversely, lacking a robust plan can lead to confusion and setbacks. It’s worth remembering that even a mediocre plan is better than no plan at all, but any plan must be actively worked on to be beneficial.
Growing a business is about making informed decisions, strategic planning, and constant vigilance.
The journey from business inception to maturity involves navigating various challenges, each requiring a different mindset and approach. With proper planning and a clear understanding of the stages of growth, businesses can thrive, overcome obstacles, and seize opportunities.
Highlights
- [0:34] Big Business Dreams
- [01:26] The Importance of Planning
- [01:53] The Five Stages of Business Growth
- [02:11] Stage 1: Existence
- [02:47] Stage 2: Survival
- [03:16] Stage 3: Success
- [05:01] Stage 4: Takeoff
- [05:54] Stage 5: Maturity
- [06:42] The Key to Success
- [07:49] The Art of Effective Planning
