Small Business Growth: 5 Stages and Unique Challenges They Bring

Small Business Growth

Whether you’re already a business owner or just someone with an idea for one, understanding the nature, characteristics, and problems of developing a small business is imperative if you want to reap the rewards. While it’s fair to say that different small businesses vary in size and potential for growth, most of them share common problems in similar stages of development. Getting ahead of the curve and getting ready for these challenges ahead might just be the difference between success and failure. This guide will showcase the five important stages of small business growth, letting you prepare for each in a timely manner. This isn’t to say that every small business experiences every single one of these stages, but it’s safe to say that most of them do. So read on and prepare for what’s coming your way.

1. Existence

At this stage you probably have an idea and not much more. However, don’t expect to be making much money at this point, as the name of the game here is to come up with a product or a service that your customers will want. A good idea is at the heart of every successful startup, and you’ll want to run yours through as many sources as possible.  Pitch your idea whenever you can, because if you can’t sell it at this stage, it’s highly unlikely you’ll be able to do it afterward. Give your best to attract an angel investor, as it will not only give you enough running capital to keep going, but also might attract even more investors your way. If you’re at a point where you think you might get through, that might be a great time to start creating your own budget strategy, which you’ll need ready for the next stage.

Suggested post:

If you can Build an Audience, then you can build you Business.

2. Survival

If you have reached this stage, you have already set up a business where you, as the owner, are a main driving force, in control of everything. Keep the organization simple, as the main goal at this stage is to start making a profit. Also, keep in mind that nine out of ten startups fail before they start earning money, thus the name of this stage. This is the do or die stage, as your project will either grow in size, or it will stall and eventually go out of business. Choose your prices carefully, as the right balance will bring you more customers, while still making enough profits to cover your costs. Invest as much time as needed to tweak your product or service by listening to the feedback of your customer base, and initiate a clever marketing campaign to increase your chances of success.

3. Success

Your business is now generating a stable source of income and more customers are coming your way. The main challenge here is adapting to a rapid growth, so you’ll need to hire a capable organizational structure. It is imperative that your recruitment process is top-notch because at this stage you should give up some of your control and have a qualified team to take over some of your responsibilities. Use the profits and fund the growth of your business, instead of having a generous income. By the end of this stage, you should have a basic marketing, financial and production sectors all set-up. This is also a point where you can start considering to sell the startup and start a new one if you’re confident about your new ideas.

4. Take Off

Brace yourself for rapid growth in both cash flow and revenue, as you’ll need to further delegate your responsibilities to your, hopefully, capable team. If at this stage you rise up to the challenge of a growing company, it will become a big business. You’ll need to adapt quickly, but also be ready for certain setbacks. Faced with rapid growth, more often than not your business is going to need some extra space. Self Storage is worth considering, as affordable storage units will help you with the lack of space at a cheap price, letting you maintain your revenues high. This is the stage where your startup will experience the fastest small business growth, and many startups fail to adjust to the pace and crack under pressure. Try to keep the atmosphere up and hire more employees, as you’re definitely going to need them.

5. Resource Maturity

At some point, rapid growth has to end and that’s where you’ll enter the stable phase of Resource Maturity. You’re entering the calm waters here, after the storm, so don’t be negative about it. The key here is mainly learning to deal with ever slowing growth and retaining the energy that kept you and your team going through the rapid growth phase. Your business has achieved a lot, and it already has a significant value, so you can always opt to cash out, or you can keep things running and have a stable income. It’s worth considering to split your company into multiple departments, each with their own budget and structure. And don’t forget to look out for the smaller businesses, as acquiring these can be the easiest way to keep doing innovative things in your business.


It’s important to note that not all business may go through all of these stages. Sometimes, rapid growth can occur right after stage one, if your idea has the potential. These businesses usually sell early, and never get to go through all five stages. Most companies will go through some resemblance of these stages, however, and being aware of difficulties and opportunities will help them optimize their chance for success. While each business is unique in so many ways, all of them face similar problems and may fall prey to the same mistakes.

Chloe Smith

Chloe Smith

Chloe Smith is a cycling enthusiast, business consultant for Supercheap storage solutions in Melbourne and a part-time writer always willing to share tidbits of advice. She believes that passion, courage, and, above all, knowledge breed success.

Leave a Reply

Your email address will not be published. Required fields are marked *

3 thoughts on “Small Business Growth: 5 Stages and Unique Challenges They Bring

  1. Avatar

    Thanks for the article which is really very helpful for a newbie like me.
    thanks for a guideline for a new startup.

  2. Avatar

    Thanks for all the information you have provided.Keep up the good work.