Growth Stage Of Business Life Cycle

A business has peaks and valleys, but there is an overarching industry life cycle that most companies experience as they expand. The growth stage of business life cycle models is the stage where most of this expansion occurs. But what are the indicators of the growth stage? How do you know when you’re there, and what is the primary trouble spot you may encounter?

Are We There Yet?

How can you tell if you’re in the growth stage? You might be tempted to say that simply because you’re making more money every month (or are finally in the black!), you’re growing. But despite the name, there’s more to growth than higher revenues or profits. A company in the growth stage of the industry life cycle is no longer living month to month. A bad month or quarter doesn’t put you at risk of going out of business. If your small business is ready to expand and you are confident in your cash flow, then you’ve entered the growth stage.

Now What?

Once you’re generating good profits and are economically healthy and sustainable, you have a choice to make. Do you want to simply maintain, or are you ready to take the leap and pursue the next stage of growth? Many mom and pop shops and local businesses are content to bring in a good profit, and aren’t interested in expanding. But if you’ve got your eye on bigger things, it’s time to get in gear.

Growing, Growing, Gone

During the growth stage of the business life cycle, you’ll have your finger in a lot of pies. Suddenly, you can’t be everywhere at once. Delegation is key to success in the growth stage. It’s hard for small business owners to let go of certain aspects of their business, but if you hire good managers, you’ll have confidence in them.

Delegating is an essential skill, particularly in the growth stage. Several surveys have reported that small business owners work longer hours than other employees; a 2005 report estimates that SBOs put in 52 hours of work a week on average. You’ll need to delegate to avoid exhaustion.

As your business takes off, you’ll face a crucible moment. The growth stage of business life cycle models branches off into two substages – disengagement and continued growth. You can gradually delegate all your responsibilities and take a passive role in the company, or press on with expansion. Just being able to make this choice is an indicator of success!


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