All businesses are different, but they all go through similar business growth stages. Understanding these stages will help you anticipate challenges and implement strategies that offer the greatest likelihood of success.
The Existence Stage includes everything from mom and pop retail stores to new technology manufacturers that haven’t yet established operating procedures and profit margins. These companies may remain in this stage for a long time, or they could fail completely and close.
Stage 1: Pre-Seed
At this stage, your brand has made it through the startup phase and is now established. You’ve gained a foothold in your original markets, and are ready to expand into new ones. You’re starting to see a steady flow of revenue and have developed the systems needed to scale your business.
Consumer analytics is a powerful tool to help you create organizational channels for marketing, especially in this phase. Use it to target consumers who are the best fit for your product or service and focus your marketing budget where it’s most effective.
At this stage, your company has established a strong market presence and is thriving. You have a solid foundation and the staff and resources to operate independently from your founders. Your accounting practices, management structures and production systems are in place and you can delegate responsibilities to other skilled managers. This is also the stage where you start looking for outside investment to fuel your growth.
Stage 2: Seed
At this stage, a business has proven that its product or service is viable and it has established traction amongst the desired demographic. It is important to keep a close eye on the cost of goods at this point in order to minimize expenses and maintain profitability.
At the seed phase, entrepreneurs begin to focus on creating organizational channels for their business and start to develop a team of employees. They may also begin to expand their market reach and pursue additional capital through loans or venture funding.
At the growth stage, a company has a strong market position and consistently generates profits. Its biggest challenge is balancing a steady increase in sales with increasing expenses. The company must find a way to increase efficiency and delegate tasks, and it should always be willing to dip into its cash reserves or secure external investment. In addition, it must ensure that its information and accounting systems are well established and that staff is well trained.
Stage 3: Growth
At this stage, a business becomes viable and is earning a decent profit. As a result, it can hire employees to manage growing sections of the company and may implement systems to better monitor marketing strategies and other business processes. But growth isn’t without risk. In the Success-Growth substage, a company must balance the increased profitability with the increase in expenses that come along with it. It’s also important to match personal and business goals.
Companies that fail to progress to the next stage often experience stagnation, falling behind competitors and earning marginal returns on their invested time and money. They can either remain in the Survival Stage (endpoint 1 on Exhibit 4) or, if they have enough capital left over, sell the business for its asset value.
Having the right consumer analytics solutions allows you to create organizational channels and develop strategic processes that can help your brand move to the next stage of growth with confidence.
Stage 4: Maturity
In this stage, a business has a service that customers are willing to pay for and is generating enough revenue to match expenses. The challenge is to maintain profits so the company can continue reinvesting and expanding.
At this point, a company should have the processes and teams in place to run the business without much input from its owner. It should have a clear idea of its target market and what it wants to accomplish in the marketplace. It should also have a well-developed information and control system.
By this point, a business should have the ability to make data-driven decisions through predictive analytics and advanced ABM tools. It should be able to deliver personalized content that matches customer intent and is aligned with KPIs. It should also have enterprise grade analytics turning out customized models of consumer behavior to help guide marketing efforts. It should have a clear understanding of its target market and be able to identify the most profitable accounts.