New businesses or start-ups are started with a very energetic frame of mind, mostly valuing the ideation and its novelty and significance. Start-ups are a source of newer and unique offerings, but for any business to sustain however unique or million-dollar their idea is, it has to go through the five stages of business growth.
The significant five stages of business development are-
- Existence
- Survival
- Breakeven
- Success
- Scalable
Let us understand how and why some businesses prosper and others go bust as they all pass through these stages-
1. Existence
Every new business begins with ideation that might be new or existing and provides a value addition from the existing product/services in the market. The new business launched has to undergo the struggle of making itself known in the market. The process of reaching out to your target audience would mean marketing and promotions and expenses that are inherent.
Start-ups are often caught in the flux of assigning funds to their different needs; then be it hiring the right resources and their recurring salaries, promotions, compliances, office space and related expenses, having an online presence, and ultimately the dilemma of prioritizing amongst these. There are very few start-ups that are backed financially and can hold ground in this phase.
2. Survival
Having done the basics of setting office, having an online presence, recruiting resources, and done a considerable amount of promotions in the first few months of launch, it is needless necessary to see how it is all rewarding back. Is the company going on the right track? What have been the customer sentiments towards your new products? What are the gaps you have identified in your processes? What are your competitor’s moves? Where do you see your company going against your set goals?
This phase sets the pace for survival. While phase -1 is full of excitement and grandeur, the survival phase -2 gives a realistic ground view of the company’s existence. Yet struggling to make its existence.
3. Break-even
This phase would be different for different businesses. It will differ for a product-based company that has done huge investments and therefore arrive at break-even late as compared to a service-based company with lesser investments, which has the potential to reach break-even sooner.
Break-even is a point where a company comes to the No-Profit-No-Loss stage, having recovered its investments, it is now ready to leap to growth and success. This is a testing phase, and many companies are not able to achieve this phase, leave the ground.
4. Success
Once a company is through phase -3 of break-even then the growth trajectory is very sorted and now all it does is rake in profits. The challenges continue, but at the same time, having established itself, the company is known and accepted. This is a very rewarding phase in every business where ideas finally bring tangible returns. Businesses having reached this phase has to be able to retain the success or enhance through revision of business goals.
5. Scalability
With revised business goals, companies might want to scale their operations in volume, or through penetration in different geographies. Scalability is a phase which again needs expert decision-making to be able to choose the right growth path for the company’s success.
Authored by: Ms.Neeta Chavan, Director, BNI Navi Mumbai
