Managing Your Small Business Successfully in Five Stages

Managing Your Small Business Successfully in Five Stages

Every business starts from somewhere, some even from scratch. Majority of the big corporations we know now started out as a small business and, for those who want to start their business, it’s essential to learn the five stages of small business and prepare for every stage. Specifically, it begins with existence, survival, success, followed by take-off and, lastly, resource maturity. Let’s discuss all these stages to give you an idea of how and where to start and how to navigate every stage.

 

Business always involves some risk. As you grow your business, you will always face decisions that could either benefit or disadvantage your company. The decisions you make are crucial to your company’s growth. However, always remember that every decision will always come with a consequence – good or bad – and you have to prepare for it.

 

There are several ways on how to grow a small business into big business. Academics Neil C. Churchill and Virginia L. Lewis devised a five-stage model to grow small businesses. You can use this model to guide you as you move your way up to the business ladder.

 

Here are the Five Stages of Small Business Growth:

 

  1.    Existence

 

This entry and growth strategy in a business plan is the first stage of business growth. As the name suggests, your business needs to start existing, and people need to know about it. The primary goal of this stage is to inform your target market and gain customers.

 

So, how will you do it? Here are some ways:

  • Give free trials. Since you are introducing a new product or service to the market, then it would be best to give free trials so that there will be more people who can try or experience what you have to offer.
  • Create an attractive opening promotion. You can’t give free trials for a long time. Another way to introduce your product to the market is to have the first promotion. This will attract more people to try out your new business.
  • Impress your clients. Your efforts in giving free trials and creating an attractive opening promotion will be put to waste if you won’t impress your clients. Once you get them to try what you have to offer, might as well make sure that they put forward good feedback about their experience, which brings us to the next tip.
  • Have a feedback system in place. Since you are still in the early stages of your business, there will always be room for improvement. Your early client’s feedback will help you understand the things that you need to do to attract more customers.
  • Budget carefully. This is a stage where you can expect that you’ll have no profit yet. Therefore, you have to budget carefully and spend within your allocation so as not to kill your business just before it started.

In a highly competitive industry, it would be best to devise a unique marketing strategy to put the word out there.

 

  1.    Survival

 

Now, people know that your business exists – regardless if you provide a service or product. After this stage, it is then the best time to advance to the next stage: survival. In the survival stage, the primary goal is to have a sustainable, profit-making business.

 

How are you going to do it? Here are some ways:

  • Attract more clients. During this stage, your profit must be more than your expenses. Therefore, attracting more clients can help you achieve this stage’s goal. More clients mean more profit and more profit means having more than enough money to cover your expenses. As to how to attract more clients, your team must think of unique ways to do it.
  • Be mindful of your cash flow. You always have to keep a cash flow so you can monitor your expenses.
  • Cut Cost. If there are some aspects where you can cut cost, then it would be wise to do so. However, marketing and advertising budget must not be cut off because these are still essential for your business growth.

 

  1.    Success

 

Once you’ve become successful with Step 2, then it’s time to advance to Step 3. You can’t just survive; you have to grow your business. With a stable profit in place, it’s time to take the company a step further. You can choose to do one of this two things: spend the funds for future growth or fund a new business venture.

 

  1.    Take Off

 

Once you have decided on how to spend your money, it’s time to take off. This is the stage where your company takes the challenge of rapid growth to become a big company. You’ll have to expand your business to cater to your growing number of customers, so you’ll have to hire additional people, buy other equipment and plan for better processes.

 

  1.    Resource Maturity

 

During this stage, it’s time to expand your market so you can offer other related products to your clients. By providing these new products, you do not only develop your chances for profit, but you’re also making your clients feel that you are continually innovating to cater to their changing needs

 

Growing a business can be a different experience for each business owner. But no matter what strategy you use, the best way to build a business is to always treat your clients well. Since they are the bread and butter of your business, managing them well will come a long way and will go back a hundred folds. If you are a new business owner, you can also tap companies that do business consulting in California so they can offer their expert advice about growing your business.

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