Running a small business is hard enough for today, but getting your small business off the ground presents an entirely different challenge for an entrepreneur. That’s well done! So, when you start your small business in today’s world, you are saying that you have the will and the entrepreneurship bug.
A couple of months into the trade, as you persist with the operation, you start to see some alarming signs. Why is my business stagnating rather than expanding? Is my business plan wrong? Did I hire the right people? Do the marketing methods that I am using work as they should?
These are some common questions most small-scale entrepreneurs have when maintaining their businesses. Fortunately, it’s simple to break down your business processes to identify causes of concern. What’s next?
Stages of Small Business Growth
Small-scale businesses like construction, consultancy, career coaching, child care, tutoring like an
Existence
This is the start-up phase, where an entrepreneur manages the business operations and makes important decisions. Moreover, more investors need to fund the project, pushing the business owner to fund the entire venture.
The main challenges business owners face are attracting customers and delivering the goods and services contracted for. The main questions small-scale entrepreneurs must answer include: Can we get more customers? How do we deliver our products quickly to become a viable business?
Proper cash management remains rooted in any business’s longevity. Owners must find the delicate balance between the right amount of cash to cover expenses and current obligations.
Survival
The new phase is survival, where small-scale businesses have proven to create a profitable product or service and an established customer base. At this point, the main focus is shifting from retaining customers to addressing the intermittent relationship between revenue and expenses.
Most entrepreneurs know they won’t make much profit during the initial stages of operation. However, they should break even, generate enough revenue to cover expenses, and replace capital assets.
The profit-making process requires businesses to generate enough cash flow to remain profitable and maintain a positive growth trajectory. It also involves establishing a strong customer base and improving the business model.
Success
The maturity phase in the business growth stage shows a thriving venture. It means that small-scale businesses have established a strong presence in the industry to ensure a consistent flow of profits. The mature business features an established brand and grows its financial health.
It marks a growth phase where the business is sustainable to add more employees for management positions. The brand identity becomes strong and separates itself from the…
