Chapter 1

Stages of business growth

Before you leap into growth, reflect on where you’ve come from. Find out the stage of business growth you’re at.

A person watering a potted plant

Launch and learn: the startup stage

This is a tricky stage even when things start slow. But some businesses need to grow straight away.

Challenges you faced

Most startups are trying to get established in the market, work out supply chain wrinkles, and stay within their budget.

Strategies that helped

  • Keeping a close eye on your cash flow
  • Focusing on your immediate goals
  • Adapting to feedback from your customers

Check out our guide on how to start a business to learn more about the startup stage.

Sure and steady: the early growth stage

Established businesses ideally start to see consistent customer and revenue growth.

Challenges you’ll face

Now is when you need to meet the demands of increasing sales and customer numbers. Dividing your time between day-to-day jobs and big-picture growth can be a tough challenge.

Strategies to help

  • Formulate a business growth plan
  • Nail down your processes and make them more efficient
  • Set up effective management and reporting systems
  • Hire people who can free you up to lead the business strategy

Bigger and better: the expansion stage

Once your business is humming along – with solid cash flow and good processes – you can pursue more opportunities. The trick is in choosing the right ones.

Challenges you’ll face

Getting more customers, expanding into new markets, and developing new revenue streams will be the main challenges at this stage of business growth. Plus you’ll probably have people to manage.

Strategies to help

  • Plan carefully so you identify a strategy that gives good return on investment
  • Be realistic about what you can achieve with the resources you have
  • Focus on areas that complement your existing strengths rather than areas with increased risk

Navigating the stages of business growth

Every business is different. You may be content with the stability of steady growth and choose not to expand in a big way, or you may skip the gradual growth stage altogether and go straight to more rapid expansion. Whatever stage your business is currently in or whichever you choose next, understanding each stage can help you anticipate the challenges and increase your chances of success.

Disclaimer: Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.

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