Once you’re running a startup business you need to focus on developments to earn more profit and settle your company. Scaling up your business will require a more solid administration system due to increasing business activities. It follows the demands of system formalization due to the financial push of the developing business. However, the business growth will go through stages, know them so you can anticipate with precise actions.
Initial Stage
In this stage, a startup company will struggle on managing their capitals including finances, time, and energy. It would center all the company’s efforts to increase the products acceptability rate on the market. There would be a lot of works on research and product developments. Being accepted in the market is the major goal of this very first growth stage. There will be two functional divisions plays a key role at this stage, production and sales or marketing. Once the products have been accepted, profits will gradually increase and become a financial push to move on to the next stage.
Growth Stage
It’s also called the scaling-up stage where the profits have significantly increased and allow the company to expand the business. Most of the profits would be recapitalized for the company and the company requires more organized functional lines. The product development is no longer at a high frequency in developing new products but they now focus on how to manage the mass production. It exposes the company to the competition in the market which demands the lowest production costs to win. The company scales up and new investors will be required to support.
Expansion Stage
At this expansion stage, the company would demand a more established and systemized lines including proper accounting system, financial controls, report management, administration based on mandatory authorities. The expansion will now require long-term funding but your reputation at this stage should be able to attract more investors due to dividends. However, you’ll have to provide assets as the security of their investment.
Establishing Stage
This stage is about settling down the management and seeking for high productivity and further growth. Competition would get tighter and the production would be the main concern merely due to production cost and innovation responding to the competition and differentiation. At this stage, investment in marketing and sales would be inevitable. The company will be at one point where they should scale up independently, stay, or promote the acquisition to scale up.