Stages of business growth

25th September 2015 by KLokk Accounting.

stages of business growth

Many of us have an idea for a business. Few of us follow through with that idea. But, those who do start out with a simple idea and turn it into something special will have to go through five very important stages of development. Each one of these stages is mandatory and is based upon critical points. As an entrepreneur or manager, you must successfully handle each one of these stages to remain on a growth pattern. Do you know where you are in the process?

As a rule of thumb if a business is growing according to plan, each stage is about three years in duration. Of course, there are exceptions to this rule depending on how dedicated and organized you are. For instance, the Idea Stage (Stage 1) usually only takes from six to nine months. It is not difficult to determine what stage your business is in. At the end of each of these stages, there is a critical period through which the business must battle to reach the next level. These are the five stages:

1. The Idea Stage – This is where the business begins its new life. The idea has already been conceived, developed and research is being done to determine its viability as a legitimate business. This is one of the most exciting times of any business venture. Developing ideas for products and services to sell and nurturing those ideas until they become a reality.

2. The Entrepreneurial Stage – This is the next stage where the business is rolling and marketing, branding and acquiring customers is the main focus.

3. The System Stage – The business is experiencing a consistency in sales and the business now requires a more systematic and disciplined approach for hiring, training staff and retaining customers.

4. The Delegation Stage – Perhaps the most difficult stage for a business owner to accomplish. At this point you will want to consider outsourcing your accounting and/or marketing services.

5. Next Stage
– This is when it is time to add a new product or service and expand to the next level.

For those of you who are sports enthusiasts let us draw a parallel. If you are on a team you have to keep score. In business you also need to keep score. If you do not, you will continually repeat the same mistakes. Your scorecard as an executive is your system of metrics that allow you to track what is working and what is not working. It identifies where you need to make strategy changes and modifications. You need to keep score with metrics on sales and marketing activities, costs of sales and major overheads.

If you are past the Delegation Stage that means you are building a team and just like with any sports team you need to have a positive attitude, develop strategies, be willing to work hard and set up tracking systems to monitor the results. It takes practice in business just like it does out on the field but if you are successful you all will be exchanging “high fives” and “chest bumps” as you clear each hurdle.

Before you proceed to the Next Stage and begin exploring new ventures make sure your core business is well established, all systems are in place and your team is behind you. As part of your team you will need a good accountant who can guide you through the process of business performance improvement, help you with budgeting and assist in helping you invest for the future.

In venturing too far from your original business plan you may find yourself in a different area than you intended. This may require moving into a completely new direction. You do not want to have to reinvent the wheel a second time. Unless you are ready for all new challenges, enjoy your successes, explore the future but do not become comfortable and complacent. It may cost you in the long run. But when you are ready, plunge ahead since you have already paid your dues.