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in this video we're going to talk about the five stages of small business growth it is a framework designed to help small business owners and entrepreneurs gauge where they are in their development and begin to make certain decisions so they can move to the next stage of growth the five stages of small business growth are existence survival success takeoff and resource maturity let's talk about stage one the existence stage when your company is in this stage or within this phase of development the major focus for you as the entrepreneur is to obtain customers you started a venture with an idea came up with a minimum viable product or prototype you have some interest in what you're offering and now you're trying to make it so that customers can purchase that product your focus is on not only what it is that you sell but also making sure you're delivering it to those customers and that they're having a great experience so that's also part of this stage delivering products and services to those customers the owner is the business at this stage they do everything they wear all the hats and they make all the decisions the owner is deeply vested in the success of the company because the company is really an extension of them the strategy of this company at this stage is to simply stay alive if companies don't get enough traction with customers at this stage the company usually goes out of business because they run out of capital and they shut down all operations if customers are successful in getting the traction that they want from the market then they are able to move to the next stage of development the next stage of growth and development is the survival stage at this point you don't just have a great idea or a minimum viable product you actually have a workable business entity you have customers continuously buying from you you're now manufacturing and ramping up your production to meet their demands and now you are starting to see growth in your organization one of the questions becomes do you make enough money to keep your business going and keep it growing so now you have to really establish your differences between revenue and expenses also you have to make sure that you are generating enough cash from sales and profits to break even and head toward profitability at this stage your organization is still simple you may have a few managers at this stage or a few people that are supervising others but you don't have a complex organization yet the systems that you need for your organization are not as complex as well so at this stage you are preparing to move to stage three which is the success stage a lot of companies go out of business at this stage as well because they cannot make the necessary adjustments for success stage three of this process is the success stage this stage is a difficult stage to navigate for founders it's difficult because when companies reach this stage they're now beginning to make decisions on whether or not they should stay the same size they are because they're now experiencing some growth and profit or are they going to take advantage of the marketplace demands for their products and services and actually grow the company even larger when companies reach this stage the owner is looking at their company as a growth platform they are looking to see if they can continue to make average or above average profits for their industry they also have to adapt to changing circumstances now the organization is not only growing in profits and revenues it is also growing in complexity more employees are joining the organization and now you're beginning to see the need for process in order to sustain the growth as well as begin to build efficiencies into the organization so that it can continue to be profitable this is also the stage when the owner and the company start to separate stage four is the takeoff stage when companies reach the fourth stage the key issue is how do you rapidly grow the company and also how do you finance that growth the owner begins to delegate responsibility because the company has grown to a point where it has so many people that he or she can no longer have the day-to-day direct management of the operation the structure becomes decentralized and now requires operational and strategic planning processes to be put in place at this stage the organization can be sold or it can become a very large business research says that entrepreneurs who bring companies to this stage normally are replaced voluntarily or involuntarily by the investors or creditors of the organization the last stage of growth is the resource maturity stage at this stage the greatest concern of the organization is to consolidate and control the financial gains brought by the rapid growth and also to include a flexibility response and the entrepreneurial spirit to keep it going now that you know the five stages of small business growth there are a couple questions you should consider first think about the stage that your business is in right now which one do you think it is based on how we described them are you in the existence stage survival stage the takeoff stage the success stage or the maturity stage another question for you is if a bank were to assess your business stage what data do you think they would research in order to find out where you are another question to consider is how do you plan to move your business to the next stage once you've established where you are and as you think about moving to the next stage what resources do you anticipate you will need in order to be successful this video was about the five stages of small business growth i hope you enjoyed it good luck to you and we'll see you at the next stage of your development