Three main stages of business growth and how to recognize them

Understanding the 3 stages of business growth is a key factor for any small business owner. Do you know what stage your business is? Before you understand what they are, it is important to mention here that business growth comes with its demands. When your business graduates to the next level, it demands different managerial and leadership style. Every successful company  developed organically, from the initial stage to the next until they became the giants they are today.

Having said that, let us look at the three stages of business growth and look at what each stage entails in terms of management and leadership. All types of businesses go through the same pattern of growth.  A hotel and a fast growing online business may seem far apart in their management styles, target audiences and growth cycles, but research has shown that they all pass through the three fundamental stages.

Stage 1: micro-level

The main characteristic of micro businesses is that the founder does all the word, or gets assistance from a friend or family members. The founder is also the sole maker of decisions affecting the business. He/she contributes the capital, manages the business and maintenance the records. The success or failure of the business boils down to what the founder does or does not do.

Stage 2: Small-scale

When the business transits to small, the owner employs more people to work for him. He still does some tasks for the business, but he is not the sole contributor of labor. In fact, a large part of the work that is done in the business boils down to the employees. Thus, the success or failure of the business depends on the type of people the owner has employed.

Stage 3: midsize

The business has graduated to mid-size when the owner find it necessary to create at least one management level. The owner is now not directly involved in day to day operations of the business. Instead, the managers are answerable to him and the workers are answerable to the manager. In short, the owner has gone from managing workers to managing managers. Many entrepreneurs dread this stage because they fear losing control of their business. However, if you employ the right workforce, you should trust their expertise and judgment to do a great job. Just leave the people you have employed to do their job although you still control the vision and values of the company.