But you may have never heard of the challenges of building a business from day one to self-sufficiency.
According to government statistics, 20% of all new businesses fail within the first year and almost half within five years.
The difference between business survival and failure is determined by how investors prepare the business for its growth stages. This starts with understanding the stages before starting a business. This guide explains his five stages of business growth in 2023.
#1 – Existence Stage
The existence stage is the beginning of a small business's journey. At this stage, entrepreneurs realize their previous ideas by starting a real business. Business just exists; feasibility of business ideas, And formal planning is almost non-existent.
Business owners often manage nearly every aspect of their business. At this stage, entrepreneurs have difficulty finding customers and limited funds.
To survive this stage, entrepreneurs need to learn about the financing options available to them to continue their business while investing further in improving their products and services to gain customer trust.
#2 – Survival Stage
If you have successfully built a sizable customer base but are not profitable, your business is now in the survival stage. Although reaching the survival stage is quite an achievement, the business is not out of the woods yet.
At this point, you already know that your idea is viable, so it's time to consider whether it's viable or not. At this stage, your focus should be on putting systems in place to generate consistent profits and scale. Talent needs will increase, but before hiring new employees, it's best to leverage technology to increase the efficiency of available resources.
For example, if you're in the brewing industry, you can: use ollie Or use a similar software solution rather than adding more employees. By investing in the right tools, you can streamline your brewery's inventory management, get the most out of your existing employees, reduce overhead costs, and record more profits.
#3 – Success stage
The success stage, also known as the maturity stage, is the stage at which a business can be said to be thriving and making significant profits. Most entrepreneurs consider bringing in experts such as sales executives or other functional leaders at this stage. Extended control allows entrepreneurs to finally relinquish some of the key roles in business operations that they have held since the survival stage.
At this stage, investors don't need to continue worrying about survival, but that doesn't mean failure is out of the question. Instead, the focus is on continuing successful trends and making even more profits.
Also at this point, unlike other stages where you have to work for your money, as an entrepreneur you can talk about having your money work for you.
#4 – Takeoff Stage
After a few months in the success stage, most companies enter the take-off stage. At this stage, companies experience exponential growththis is your reward for spending time building your business.
The main concern during the take-off stage is business expansion and how to fund that expansion.
Different organizations and companies choose different paths for expansion. For some companies, it will mean merging and acquiring companies. Some companies may be considering developing new products or entering new markets.
#5 – Maturity stage
The maturity stage is the stage at which a business can be said to have achieved the highest level of success. The highest level of success may mean different things to two different entrepreneurs and organizations. But in general, businesses that are industry leaders are mature.
Also, the business must have used up almost everything growth opportunity In the current market. The biggest challenge for companies at this stage is stagnation and decline. Strategies that can be applied to address these challenges include exploring new markets and focusing on innovation and new product development.
