Businesses grow through stages. Just like babies become toddlers, who become kids, teenagers, and eventually adults, businesses grow through distinctive phases.
In each phase, there are particular opportunities that the owner needs to focus on to maximize their rate of growth. Let’s look at each phase with some examples.
Every business starts out looking for customers. To grow through the start-up phase, you need to identify a fit between what you offer and what the market needs, and then you need to learn how to communicate the value of your offer so that people will respond to it.
In the start-up phase, every opportunity looks like a good one (because without new clients, you die)! So start-up leaders are focused on finding opportunities! But the ideal opportunity for a start-up company helps them make more money from similar customers or by solving similar problems.
The temptation is to go wide; the opportunity is when you go deep.
The growth phase business has solidified their service-market fit. They know who they sell to and what those folks value. The opportunity in the growth phase is to sell more of it!
So looking for opportunities to increase the number of clients or the size of clients you are serving is paramount!
As the growth stage business starts to scale, they can gain efficiencies by integrating various systems to create more consistent and efficient operations.
In this phase, the management team can start to look sideways at opportunities. Opportunities cause disruptions; they slow down the integration and efficiency efforts.
So in the integration phase, opportunities often look like expanding into new markets either geographically or into aligned industries.
The Expansion phase
As your business systems mature and your growth starts to slow, there are opportunities to employ other people’s money to grow your business. Whether you need to expand capacity or make some acquisitions to grow, you can now find money from banks, PE firms, and others to help you to do that.
Want to learn more about what phase of growth your business is in? Take our 8 question business growth phase assessment!