The 4 Stages of Business Growth and Relevant Resources

What are the stages of business growth?

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The stages of business growth can vary, but most experts will define either 4 or 5 stages of business growth. As someone looking to start a business or someone looking to grow a business, it’s useful to understand the general life cycle of a business so you can take the right steps at the right time to boost your chances of survival.

The world of business is ever changing and shifts along with supply, demand and consumer preferences. To establish a startup as a powerhouse and well-known brand, you will have to take calculated risks. Let’s take a look at the four main stages of business growth and things to consider during each step along the journey.

1. Startup

Some people will consider a business a startup at the inception of the idea. Others will only see a business as a startup when funding has been established and there’s some semblance of a customer base. No matter when you define the beginning of your startup phase, you have a minimum viable product (MVP) to work with and should turn your focus to:

a. Talent: The people you hire in the beginning of your business will set the stage for the company culture. While there is a cost to bring on a new hire, it proves to be worth it when you can find the type of people who are willing to do whatever it takes to make the business successful. Some traits to look for in your first employees include: flexibility, adaptability, desire to problem-solve, a willingness to learn and take on new jobs as needed. 

b. Process establishment: The next business stage is scaling. But, before you scale, you want to have well-defined processes so that as you expand, control and quality do not fall behind. You need to make sure that processes are clear and iterative so that as the business grows, the processes will continue to work for you and not against you. 

c. Customer service: As the holy grail of most businesses, customer service should always be at the top of your mind. Invest time, money and energy into supporting your customer base, especially those who are with you from the beginning. 

d. Early adopters:  Early adopters are those who are first to use a new product or service. To attract this customer base, you have to clearly define your target audience. Rather than spreading a lot of money across a wide net to attract people, focus on your core audience and let them help you build brand awareness through word of mouth. This will help to lower your customer acquisition cost and promote brand loyalty from the get go.

2. Scale

Every company has a different timeline for when they become profitable. But, once you move past the break-even point, then you’ll look to scale the business. At this point, you may look for additional business funding or reinvest your profits into the business. 

a. Executives: At this point, it’s worthwhile to invest in at least one or two executives with experience in your industry. They can help to sharpen your go-to-market plan and optimize efforts. 

b. Define roles: Since you recruited your team  in the startup phase, you may not have clearly defined their roles since everything was getting up and running. Now,  you’ve probably been able to better clarify what each person is responsible for doing, and if need be, you can bring on more team members who are experts in their respective roles. 

c. Marketing: To boost your brand awareness, it’s the right time to invest in marketing and branding. From establishing a strong brand identity to communicating your value proposition to an audience, this is the time where you will begin to see your business take off.

3. Expansion

Once your brand is established, your team is in place and your profits are growing, expansion is the next to do. The goal is to grow your market share. This can be done by:

a. New opportunities: Explore new opportunities for revenue. This may be by offering new products or services, expanding markets, creating up-selling features or growing brand equity in existing markets.

b. Stay focused: Hopefully, things are looking up. But, it’s important to also remain vigilant and aware that your product and services must retain their original (or better) quality or your success will be threatened. 

c. Key aspect is cash: You’ll likely need cash on hand to expand. This is especially true if your expansion plan entails adding new products or services. There are several ways to receive business funding, but two common methods are by taking out a business loan or applying for a merchant cash advance

4. Maturity

How do you know you’ve made it? If your brand has become a household name or your market share is maximized, you’ve likely hit the maturity stage. You’re no longer focused on establishing your brand identity or expanding your markets, but rather, you are in the business of retaining customers and in it for the long haul. 

a. Build customer loyalty: More than half of business’ sales generally come from existing customers. That’s why it’s so important to retain your customers and continue to provide them with the value you’ve always promised. 

b. Organizational structure: While your organizational structure is solid, it’s useful to consider how you can innovate and try new ideas. In most instances, this type of culture can be generated and supported by the organization’s leaders so that everyone feels like they can contribute ideas and be heard.

The Bottom Line

Business moves fast. It takes agile business owners who are up for a challenge to make their business last in an overly competitive landscape. While every business and industry has their fair share of nuances in terms of business structure, communication and goals, these four stages of a business cycle have become somewhat universal. 


Some important takeaways for business owners include: remember why you started, continue to prove your value to your customers, invest wisely by taking calculated risks and understand your business financing options at every step of your business’ life.

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