7 March 2023

The 5 Stages of Small Business Growth (And How to Succeed in Them)

Did you know that small businesses and family enterprises take up about 97% of the total number of businesses set up in Australia? There is no doubt that there are a lot of aspiring entrepreneurs who dream of taking their small businesses to the next level but not everyone is lucky enough to take off. In fact, of all the new Australian businesses that started 4 years ago, almost half are no longer operating and of the more than 2 million businesses in Australia 4 years ago, one in three no longer exists.

Everyone wants their startup to blossom into a successful enterprise, but that road is seldom as direct and straightforward as one might think. From getting off the ground and managing cash flow, right through to scaling everyday operations and beyond – there are lots of important considerations involved in growing a successful company. That is why understanding the business lifecycle for small businesses and learning how to accelerate in each of them is so important. In this blog post, we’ll take you through each step so that you can map out your own route from startup success all the way up to the big league!

Stage 1: Establish existence

The 5 Stages of Small Business Growth

The very first step to growing a brand-new business is, of course, getting it off the ground. This means setting up a viable business model, obtaining licenses and permits from relevant authorities (local, state or federal), setting up your office space, filing taxes, etc. It’s also important to create an online presence for your brand/product/service so you can start connecting with potential customers.

How to succeed at this stage of business growth?

The startup phase of business growth is undoubtedly the most crucial. To ensure its success, it is important to have a solid plan with achievable business goals mapped out at each step along the way. From the early planning stages, one must proactively conduct market research and develop financial projections to better assess their individual business’ long-term sustainability.

Additionally, building relationships in the industry can be essential: participating in relevant conferences or even forming an advisory board of industry veterans can provide much-needed guidance as well as a built-in marketing opportunity for newcomers. You can also join coworking spaces like Mobo Co in South Bank to get access to networking events. Finally, it is also key to remember that putting a focus on customer experience during this stage will give your business strong traction moving forward. Here are some growth strategies you can implement to succeed at this stage of the business life cycle:

Put systems and processes in place to ensure smooth operations
Gather feedback from potential customers to fine-tune offerings
Obtain any licenses or permits necessary for running your business
Develop a marketing strategy that is tailored to your potential customers
Take the time to research and understand the industry you’re entering
Stay abreast of changes in regulations, technologies or market trends.

Stage 2: Survive to thrive

Once your small business is established, the next stage is all about staying afloat. This means carefully managing cash flow and implementing alternative strategies to reduce expenses while increasing income. It’s also important to keep up with industry trends and ensure you’re using the most effective marketing plans available. This is also the stage where you have more room for additional overhead costs like signing up for a coworking space, more staff, and equipment or technology upgrades.

How to succeed at this stage of business growth?

Managing a business venture during its second stage of growth is an exciting yet challenging endeavour. Businesses in this stage require strong leadership and well-organised procedures in order to reach their goals. To ensure success as the business progresses, hiring the right team is paramount. It’s important to select individuals who are able to bring fresh ideas and different perspectives while having sufficient knowledge of the industry; this will make sure that developments meet overall objectives.

Additionally, identifying trends within the industry will help your company make plans that can be implemented accordingly. Building relationships with key stakeholders will also help foster a collaborative environment between them and your business by demonstrating transparency, reliability, and value for your customer base. All these steps create a platform for achieving long-term success for the business during its growth stage. Other tips include:

Constantly review processes to make sure they are efficient and cost-effective
Take advantage of any available incentives or grant funding
Invest in marketing efforts that can help increase brand awareness
Utilise customer feedback to improve products/services
Develop relationships with partners who have the same

Stage 3: Build on success

The 5 Stages of Small Business Growth

If you’ve made it this far, congratulations! At the third stage of small business growth, it’s time to invest in development and promotion. This could include adding new products or services, rapid expansion into different geographic areas or markets, improving customer service and/or increasing your workforce. This is also where most businesses start to move out of their home office, coworking space, or hot desk setup and invest in a dedicated office space.

How to succeed at this stage of business growth?

Many businesses fail to successfully cross the growth phases. This is because this is the point at which many foundational problems begin to reveal themselves, and many business processes start to need scaling or reforming. One key measure of success at this stage is setting a clear vision for what you want your enterprise to look like and how it will function as it grows from its micro-enterprise origins. Strong financial planning and strategies for near-term profitability (or cash flow management) are also important, as are resource plans that can deliver the services and results required by your customer base.

In addition, developing trackable ‘metrics’ for the various processes implemented within your organisation gives you key insights about how well they are performing. Taking active steps to address inefficiencies and opportunities so that your business stays on track amidst rapid growth is essential for a successful transition into an advanced stage of business operations. You can try the following actionable steps to ensure success:

Invest in good project management software
Establish clear financial goals and objectives
Monitor the performance of vendors and suppliers
Recruit additional human resources as needed
Streamline production processes to optimise efficiency
Identify key areas where automation can be beneficial
Hold regular meetings with your core team to make sure everyone is on point with their goals

Stage 4: Identify expansion opportunities

At this stage, your small business should be well-established and generate a decent amount of income. Now, it’s time to think about expansion opportunities. This could mean setting up multiple branches in different locations or countries, launching new products/services or exploring other markets for growth potential.

How to succeed at this stage of business growth?

Having reached profitability, businesses must focus on adding value for customers and expand their operations to new markets. It also entails taking calculated risks and seeking out opportunities for strategic partnerships.

While it can be tempting to jump the gun and expand into new markets, reinvesting in the core strengths of the company’s products and services may also be a more cost-effective route. Companies should also focus on streamlining their organisational structures and staffing levels to make themselves competitively optimal.

Finally, taking advantage of existing technology that has proven successful for similar businesses may also help jumpstart success at this stage of growth. By adopting a careful yet ambitious approach, businesses can thrive at this level and ensure sustained success for many years after. Here are our top tips for acing this stage of business growth:

Develop a comprehensive business expansion plan
Invest in research and development to stay ahead of the competition
Take advantage of new technologies to increase productivity
Utilse digital marketing tools to reach out to customers in different markets
Establish strategic partnerships with other businesses in the same industry

Stage 5: Reach maturity

The final stage of small business growth is all about achieving maturity. This means consolidating and streamlining operations so that your company runs like a well-oiled machine. It’s time to focus on optimisation, automation, efficiency and sustainability – the key components of successful enterprise management. This is also the point where you can get a serviced office to accommodate all the members of your team to improve everyone’s productivity and boost their morale.

How to succeed at this stage of business growth?

Successfully navigating the fifth and final stage of business growth is easier said than done. As businesses reach this stage, they must strive to maintain competitive advantage, reduce costs, optimise operations and transformation activities, and implement sustainable strategies for future growth.

To succeed at the fifth stage of business growth it is important to have a deep understanding of the industry in which you are operating; effective marketing and customer service methods; smart decision-making about pricing and product selection; continually review your financial performance to ensure long-term sustainability; leverage technology appropriately; build trust relationships with key stakeholders; establish yourself as an expert in your respective market segment; as well as having a commitment to excellence in delivering value to customers. You can implement these tips too:

Reevaluate operational structures and staffing levels
Invest in market research and customer feedback
Leverage data to make better decisions
Develop a sustainable business strategy
Focus on automation and streamlining processes

How to identify your place in the 5 stages of business growth

The 5 Stages of Small Business Growth

By now, you should have an idea of where your business stands in the 5 stages of growth. Knowing which stage you are at can help you identify areas for improvement, and set goals that will take your business idea to the next level.

If your company has just started out, then it is likely still in the startup or early-stage of growth. Here it is important to focus on creating and executing a strategic business plan that will lay the groundwork for future success. This can also be a challenging phase since most businesses will go through a period of trial and error before finding their footing. You can try to keep overhead costs low at this stage by housing your business in a coworking space, instead of having to rent an office space of your own. You can also opt for a virtual office so you can enjoy a Brisbane CBD address without the associated costs.

If you are in the growth stage, then it is important to focus on product or service development, expansion into new markets, and increasing customer loyalty. Additionally, take advantage of existing technology that may be beneficial for your business.

At the maturity phase, a business should focus on optimisation and efficiency. This includes streamlining operations, automation, sustainability and cost-effectiveness.

How Mobo Co can help you succeed at any stage of small business growth

At Mobo Co, we understand that each stage of small business growth poses its own set of challenges. That’s why we provide our members with the resources, support and guidance they need to succeed at any stage of their journey. Here are just some advantages Mobo Co can give you and your business:

Flexible Terms

Our flexible terms and short-term commitment structure make it easy to scale up or down your coworking space as needed. This is especially helpful for businesses still trying to find their footing in the early stages.

Supportive Community

The Mobo Co community offers a supportive, collaborative environment where members can connect with like-minded people and share ideas. We also hold regular networking events that can be helpful if you are planning to collaborate with other businesses and expand your own. Having this community is invaluable for businesses of any size.

Competitive Rates

We offer competitive rates that are tailored to fit your budget. If you’re a start-up or a long-running business looking to cut costs while still enjoying resort-style amenities, Mobo Co can help.

Convenience

With a prime location in Brisbane South Bank, Mobo Co provides easy access to a wide range of amenities and services. This makes it ideal for businesses that want to reduce costly commuting times and other expenses.

Meeting Room for Hire

Our meeting rooms for hire is perfect for businesses that need an environment conducive to productivity. This is especially helpful during the growth and maturity stages of business development where you meet with partners and investors. Our meeting rooms are fully equipped to accommodate in-person discussions, virtual meetings and even hybrid assemblies.

If you’re looking for a coworking space to help your business succeed at any stage of growth, Mobo Co Coworking can provide the resources and support you need. Contact us today to learn more about how we can help you achieve your goals.