Every business, as it grows, follows a pattern. Typically, they pass through five stages, each with its unique challenges. Recognizing your stage can help you navigate its challenges more effectively.
The 5 Stages of Modern Business Growth
As you can see in the graphic below, revenue dictates the five stages that you will go through as a business owner, moving all the way from the excitement of a start up and set up, through the hard work and pain of organic growth, to getting to a good lifestyle business, before driving on again towards a performance business and facing the growing pains in the wilds. If you have not downloaded it yet, make sure you read my free report The 8 Secrets To Modern B2B Business Growth , as I cover the best ways to move through the wasteland to achieve a lifestyle business.
Stage #1 – The Set Up Stage (Up to £85k)
- Duration: Typically 6 months to a year.
- Main activities: Setting everything up, developing the business concept, and testing market demand.
- Team size: Usually 1-2 people.
- Key aspect: Proving that there’s demand for your product or service.
- Highlight: The excitement of starting up with minimal financial pressure.
We then move on to Stage #2 as the business starts to organically grow.
Stage #2 – The Wasteland Of Organic Growth (£85k – £1m)
- Duration: 1 – 5 years.
- Main challenges: Growing the team and meeting operational demands.
- Team growth: 2-3 new members.
- Key hurdle: Many businesses plateau around £350k – £500k due to lack of strategy, processes, and systems.
Stage #3 – The Lifestyle Business (£1m – 2m)
- Team size: 8-12 trusted members.
- Key features: Established strategy, well-defined processes, and solid tech tools.
- Result: Greater freedom for the owner and more strategic work.
You can now decide if you stay at this level or push on to build an eight figure performance business.
Stage #4 – The Wilds (£2m – £10m)
- Key challenges: Bigger team, managing a board of directors, and handling more complex compliance and HR issues.
- Team growth: From 10 to 50 people.
- Unique aspect: Caught between being a small business and a large enterprise.
You’re too big to be small and too small to be big…..
If you are at his stage in your business, take heart, it’s worth persevering to get through the 2 – 3 years of the wilds and become a true performance business turning over in excess of £10m.
Stage #5 – Performance Business (£10m – £50m)
- Key features: A solid board of directors, a team of over 50 people, enterprise-level technology, and evolving strategies.
- Outcome: The business can run with or without the owner and is ripe for acquisition.
Again, when you become a true performance business, you will have built a board of Directors, a solid team of 50+ people, have industry leading processes and procedures, enterprise level technology and systems and constantly evolving strategies for each area of the business. The business can now run, grow and scale with or without you and you have also created an asset that is ready for acquisition to give you an exit, should you want it.
So where are you now?
Take the time to look through the above and work out where you are now. At what stage is your business? What challenges are you facing and what do you need to do to move forward towards the next stage. Are you a typical wasteland business that is pushing towards becoming a lifestyle business? Are you a wilds business pushing towards performance? or are you at the beginning of your journey as a start up and excited to push forward towards becoming a lifestyle business?
Wherever you are, take comfort from the fact that everyone has been where you are now, faced the challenges you are facing and pushed through to grow their business. Get the right advice, take action and don;t accept no as an answer.