The 5 stages of business growth and how to navigate them

Motivated woman standing in front of graffiti rocket depicting the stages of business growth.

Small business owners are kind of a big deal. They keep our economy thriving, provide jobs for millions, and introduce new products and services that improve our collective quality of life.

Globally, 95 percent of enterprises around the world are small businesses – but despite all of that good company, it can still be a lonely proposition. Oftentimes, small business owners feel like they’re flying blind. They have the vision, but they lack the playbook necessary to move forward with confidence.

Every stage of small business growth presents new concerns, new challenges, and new opportunities to make smart decisions. Whether you’re just starting out and unsure of how to move forward, or you’re a few years in and your growth has stalled, getting a hold on your success starts by understanding the stages of business growth.

We’ll walk through the stages, provide insight on how to prepare for each one, and help you leverage specific indicators so you can determine if your business is prepared to take the next step.

5 Stages of Business Growth – and How to Successfully Navigate Them


1. Start-up

Businesses in the Start-up Stage are just getting going. Their main concerns include finding qualified leads and customers, and fitting into an already busy marketplace. If your small business is in the Start-up Stage, you may be worried about:

  •       The demand for your product or service (and who’s demanding it)
  •       Whether the quality of your product or service meets customer expectations
  •       Opportunities for creating cash flow

The Start-up Stage is a fragile place to be, with up to 45% of small businesses failing within five years. But you can successfully navigate this stage by focusing on aligning what you’re offering with what your audience needs. The key is speed and efficiency, in order to make the most of your available capital.


2. Survival

You’ve made it through the Start-up Stage! Time to celebrate, right? Actually, it’s time to survive. Small businesses that reach the Survival Stage have acquired the customers they were looking for and have been able to deliver products or services those customers want and need.

At this point, your priorities will shift from establishing your business to maintaining the careful balance between revenues and expenses. Your concerns might include:

  •       Generating the cash you need to break even
  •       Financing your growth so you can eventually earn a return

Some small businesses stay in the Survival Stage for too long, eventually fizzling out or selling to a more successful entity – while others achieve the growth they need to move to the next stage. To fall into the latter group, you’ll need to focus on generating that cash flow to fuel future growth.


3. Success

You’ve turned a profit and moved beyond the Survival Stage to the Success Stage (cue a huge sigh of relief). Your new challenge is what to do with the profit in order to keep growing, keep meeting consumer needs, and keep moving forward.

Most small businesses that are in the Success Stage use their profits one of two ways:

  1.     They use it to fund personal or business expenses
  2.     Or they reinvest it back into the company

The key is to reinvest wisely, with an awareness of your long-term strategy. If you want to maintain the status quo (and stay in the Success Stage), consider investing in systems that can help you sustain your current success. On the flip side, if you have your eye on continued growth, consider investing in the people who can help you acquire more capital and achieve more long-term success.


4. Growth

Small businesses that make it to the Growth Stage get here because they’re growing at an exponential rate. Now the goal becomes managing that growth in order to make the most of it — without losing hold of your business’s central tenets.

During the Growth Stage, you’ll want to focus on hiring the right people to help meet growing customer demands and adequately funding your growth. You’ll also want to make sure your growth doesn’t exceed your capacity to deliver (which has caused the collapse of many well-intentioned small businesses).

Strategies to consider at this stage include:

  •       Acquiring outside investment
  •       Investing in quality people you can delegate to
  •       Expanding your branding and marketing efforts (whether it’s through your in-house team or an outsourced partner)



5. Maturity

You’ve made it. You’ve acquired the capital and maintained the cash flow needed to grow, you’ve hired the right people, and you’ve managed to keep up with the rising demand for your products or services. Now that you’re in the Maturity Stage, you’ll want to focus on two things:

  •       Properly consolidating your financial gains
  •       Staying true to your roots

If you’re a small business owner who gets to the Maturity Stage, it’s because you had a vision and the drive to make it a reality. Don’t lose it! Small businesses that thrive in this stage do so because they hold onto the nimble approach and entrepreneurial spirit that defines their business.

Moving forward, stage by stage

No matter what industry you’re in, the challenges of owning a small business are hard to avoid. But if you have a clear understanding of each stage and how to tackle it on your terms, you’ll be better equipped to make the most of every opportunity.

Ready to learn more? Here’s a look at how small business leaders like you are taking a cue from CEOs. You can also schedule a meeting with a Peer representative to find out how we can support you as you grow.

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Ryan Mack

Ryan Mack is the CEO and co-founder of Peer Sales Agency. Fueled by his drive to help companies reach their revenue goals, he puts his decades of experience in sales, private equity, and organization leadership to work for Peer’s clients.


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