The 7 Stages of Small Business Growth Explained
Small business growth isn't always about launching extensive campaigns or hiring lots of staff. In fact, small business owners often get stuck at certain stages—and don't know it.
You're not alone, I'm sure! The first few months of owning a small business can be stressful and overwhelming, especially if you're trying to scale your business from the ground up. But when you look back on your journey, you'll realise that all the challenges, mistakes, and struggles have led you to where you are today.
What is small business growth? It's the process of growing a small business from start to finish. This process involves seven distinct stages all small businesses must go through to grow to the next level.
Are you ready to accelerate your growth using the 7 stages of small business growth explained? Let's go through each one in detail.
The Seven Stages of Small Business Growth
Stage 1: Building Your Customer Base
Achieving customer base growth means increasing the number of customers, or more precisely, customers with higher purchasing power. It also refers to gaining new clients or customers with higher purchasing power. A business cannot increase its customer base; it can only maintain its existing customers unless it expands its product or service offerings.
The concept of customer base growth is not limited to businesses; it also applies to individual people. As an individual, a person can never have 100%, loyal customers. In fact, some of your customers may leave you or even lose interest in your product. But this does not mean you should stop doing what you do because of it.
If your product or service is a commodity or a costly product or service, it is unlikely that you can gain many customers or high purchasing power. This is where businesses with low-cost products and services have an advantage. They can gain many customers through mass marketing and sales campaigns. But, they cannot retain these customers for very long because of their low cost.
As far as personal growth is concerned, the individual cannot achieve 100% loyalty of customers. So, you must find customers with high purchasing power and retain them. This is a difficult task and may take years to achieve. Once you have developed a loyal customer base, you will find selling more products or services easier.
There are a few ways to develop a loyal customer base. One of them is to build your customer base. When you build a customer base, you are building a relationship with your customer base. It is also called a relationship marketing strategy.
Your customer base is a group of customers who will likely buy your product or service in future. They buy more than the average consumer and are willing to pay a higher price for your product or service. In other words, they are potential buyers.
Stage 2: Market Expansion
Markets are a reflection of a company's business and can be used to predict its future performance. The market is the total supply and demand for a product or service within a given area.
Market expansion is increasing the demand for a product or service. For example, a company could introduce new products, marketing strategies or distribution channels to increase the demand for a product.
The basic premise behind the market expansion is that an increase in demand for a product or service means that you can make more money. So, companies that successfully implement this method are in a position to offer greater rewards to shareholders and executives than those that fail to grow the market.
Here are three reasons why Market Expansion helps business growth.
First, Market Expansion increases the demand for a company's products and services. This increases the potential demand for the products. By meeting the demand, the company has an opportunity to sell more of its products and increase its profits.
Second, Market Expansion improves the profit margins of the company. As a result, a company can increase its profits more quickly. This is because a company that is already selling a more significant number of products and selling more products for each unit of output can expand its production facilities and workforce faster than a company that is selling fewer products.
Third, Market Expansion helps a company to become more competitive. A company selling more products than the market can sustain is forced to cut prices. The result is that the company's products become more affordable. Therefore, the company can attract more customers and become more competitive.
The best market expansion strategy is to look at the company's existing products and services. Then, the company should look at the existing customer base. The company should then identify new areas of business where the existing customer base can be increased. For example, a company may decide to develop new markets.
A company should be wary of expanding into new markets with a small customer base. Also, the company needs to focus on the quality of its products and services. To do this, the company needs to examine the competition. A company may find that it has no competition at all, making it easy for the company to expand its markets.
The key to market expansion is to look at what a company sells, what its customers want, and how to increase the demand for those products and services.
Stage 3: Brand Recognition
Brand recognition is one of the most powerful tools in business marketing. When you recognise your customers' needs, wants and wishes, you can create products that satisfy their interests and passions.
In a world where consumers constantly change their choices, brand recognition gives businesses an advantage. Customers develop a strong connection with brands they feel passionate about and associate their personal experience with the product.
Think of a brand you like and why you like it. Think about the products that were the first that came to mind and why.
- What did they look like?
- What was the advertising around them like?
- How many times have you bought or used it?
- How often do you use it?
- Why did you buy it?
- How much do you use it?
Once you have answered these questions, you will have created a relationship with your brand. Your customers will trust you and want to do business with you because they recognise you as their ideal company.
Stage 4: Branding
Branding is the process of defining a company's unique personality and identity. This involves using consistent visual language and creating an emotion around your product or service. It helps to set expectations and create loyalty among customers.
Businesses need to define themselves. They should be able to communicate what they do, who they are and how they differ from competitors. If you look at Starbucks, for example, you might not know exactly what they sell, but you would know it is a coffee shop, has a friendly staff, and offers free WiFi. When you think of the brand ‘Starbucks', you automatically expect certain things from a store like this.
If you know your audience and what they expect, you can create products or services that meet their needs and make them happy. The same goes for employees – they need to create a specific brand. For example, when people think of McDonald's, they are reminded of golden arches, happy faces and clean, simple surroundings.
In the world of eCommerce, there are many different approaches to branding. Amazon's ‘Amazon Basics' are very plain and generic, while Amazon Prime, a membership scheme that offers free delivery and access to streaming movies and TV shows, is much more aspirational. eBay has an unconventional approach designed to encourage consumers to buy used.
The trick is developing a consistent brand image and taking a consistent approach to content and design. This will make your business stand out from your competitors and make it easier to find what you're looking for online.
Stage 5: Revenue Streams
Businesses need to expand revenue streams. They need to be profitable to pay for the cost of running their business and their products or services. In addition, they need to be attractive to potential customers to grow sales. Here are some suggestions to help you increase your business's revenue stream.
Increase your market share.
Your business may be doing well, but there is still competition in the market. It would be best if you tried to build customer loyalty and increase market share. You can achieve this by making your product/service the best and being honest, helpful and efficient.
Your customers expect you to provide them with what they want. Be clear about what you can offer them. If you say you can deliver their order within a specific time frame, do it.
Be willing to change your business activities and delivery methods if customers find new products and services desirable. Change is normal.
Provide good value for money.
Give customers what they want and what they will pay for. Give them a good service, as fast as possible, and at the best price. You can be competitive by having good relationships with suppliers and providing incentives for your staff.
Get better at customer service.
This is more about how you behave towards your customers and includes your attitude to them and how you respond to enquiries and complaints. Try to respond quickly and courteously, even when you don't feel like it.
Add value to customers.
If you value your customers, they will be happy to give you a good rating on your website. Customers want to know they are being treated fairly and receiving the best service.
If you see a trend in your industry or your competitors' products and services, then be proactive and be the first to market with your version of the trend.
Give back to society.
Supporting local charities and community groups is a great way to get customers to spread the word about your business. It's also great to show your customers you are committed to and care about the community.
Try to get feedback from customers.
Try to get feedback from your customers regularly and make changes if necessary. It helps to know what they want and will give you ideas for ways to improve.
Ask the right questions.
Use your customer feedback to help you improve your business and your products or services. Ask your customers what they think of your business and what they want to see in the future.
Focus on the future.
It can be challenging to keep up to date with industry trends and changes, but you should make a point of doing so. Being ahead of the game is a competitive advantage.
Make sure you have suitable systems.
Your business will run more efficiently if you have an excellent technical system. Good customer relationship management software is a great help.
Develop and use marketing campaigns.
Use your marketing budget wisely to promote your business most effectively. Ask your customers what they want if you are not confident in your marketing strategy. They will tell you.
Be aware of your reputation.
A negative reputation can damage your business. It's essential to monitor your reputation and act to correct any mistakes. It's equally important to act promptly to prevent unfavourable publicity.
Stage 6: Marketing to Different Audiences
This is one of the questions we often hear in our social media courses, especially the ones for entrepreneurs. And, no single magic bullet indeed exists to increase sales and revenues. However, there are many ways to make it happen, and some of them come down to knowing how to reach different groups of people. So, why should marketers know this? Why does marketing to different audiences matters? Let's find out together.
First, let's understand that if you are a small business, you cannot afford to ignore your target audience. If you do not know what kind of people are interested in your products and services, it's like playing blindfolded – you will never know where the money is hidden. So, to gain the benefits of marketing to different audiences, you must first know your target market.
If you are an entrepreneur, a marketing expert or a business owner, you should realise that marketing is not always about creating buzz. There are different selling methods; you must choose which one will fit your particular product or service and your target audience.
Let's now look at some of the most common types of marketing audiences and how they can help your business grow.
The “Top 100” Audience
Who is the Top 100? Well, they are the people who are likely to buy your products and services. They are also the people whom you want to attract.
The “Top 1%” Audience
If you want to see your brand and product in the front of the mind of top professionals, then you need to consider these people. They are the influencers who can influence others to buy your products and services.
The “Social Elite” Audience
They are the top social media users and the people online the most. You can also expect them to be more active on Facebook, Twitter, and Instagram, among other social media platforms.
The “Generation Z” Audience
Yes, they are here already, and they are here to stay. It is estimated that they will make up nearly 30% of the workforce by 2025. As they have grown up in the digital era, they prefer to share their opinions, likes and dislikes on social media. This is why brands on Facebook usually target them.
So, what is the conclusion? To grow your business, you should know how to market to different audiences.
Stage 7: Growing Your Business
It is not easy to grow your business, but it is possible by adopting some practical tips.
Have a Clear Vision
Having a clear vision will help you to plan your business and take the proper steps to make your business grow. It won't be easy if you don't know where you want to grow your business.
Plan Your Strategy
You can adopt many strategies to grow your business, but if you don't plan your strategy, it will not work. You need to identify the market and the competition that you are facing. It will help you identify the strategies you can adopt to grow your business.
Make the Budget
If you are selling products and services, then you need to make the budget for your business. This is the most critical step that you need to take care of. If you don't make the budget for your business, it will be difficult for you to make sales.
Offer the Right Products
Your product needs to be unique and fulfil your customers' requirements. If you offer the same type of product, then it will be difficult for you to make sales. So, you must ensure that you offer your customers the right product.
Work on Social Media
Social media is an essential tool you can adopt to grow your business. Whether working on Facebook, Twitter, LinkedIn, Instagram or Snapchat, you need to make the most of it. Social media will help you to spread the word about your business and will help you to reach a wider audience.
Invest in Your Business
The investment in your business will make your business grow. You need to spend money wisely and invest in the right places. You can invest in online marketing, offline marketing, advertising, etc.
Business growth means getting bigger, but it doesn't mean getting bigger overnight. There's a reason that growth comes in stages. There's a reason that you go from the early stage of “I'm starting my own business” to “I have a successful business, now what?” to “I have a great business, now what?”. Every business is different, but that's what we can learn from it: each business has its unique path to success, and there's a reason why there's a process behind that.
If you're ready to make a real difference in the world and take your company to the next level, you'll want to get started now!