The Stages of Small Business Growth
By Space Coast Daily // October 1, 2019
Looking for ways to grow your small business? Ultimately, growth is one of the most common goals that all small businesses strive towards. However, did you know there are different levels of growth?
Understanding the small business growth cycle can help you to determine where your business is right now. It enables you to see what steps you’ll need to take in order to reach the next stage of your growth journey.
Here, you’ll discover more about the stages of small business growth.
Launch and growth
The first two stages are the launch of new products or services, followed by growth. You’ll typically find sales can be fairly slow when you’re just launching a new service.
However, they will start to gradually increase. Of course, the strength of your marketing campaign will also determine how quickly the launch phase takes to generate significant results.
It’s not uncommon for businesses to lose money during this phase due to marketing costs.
The growth phase is where sales really start to take off. Your profit levels will still likely be less than the sales you’re making, although cash flow tends to become a lot more positive.
Shakeout and maturity
In the shakeout phase, your sales will continue to increase at a slower pace. This is typically caused by new competitors or through market saturation. Although the sales peak, the profits will decrease, and costs will increase.
During the maturity phase, your sales will finally start to drop. Your cash flow will remain steady, and profit margins aren’t as high.
It’s during this phase that many businesses choose to invest in new technologies and refresh their offerings on the market to kickstart their growth cycle.
The final stage is the decline. This is where profits, sales and cash flow all decrease. It signals the end of the growth cycle, leaving businesses back to square one if they want to grow further.
You’ll lose your competitive advantage if you don’t figure out a way to get back into the growth stage. A lot of businesses find loans from companies such as Liberis, to be crucial during this phase.
So, there you have it – the stages of growth every business goes through. If you want your company to grow and become successful, it’s important to understand the growth cycle. Once you identify where you are, you can then think up ways to solve your current growth issues.
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