During the start-up phase, you spend your time meeting people, coming up with new ways to sell your products or services, and consistently implementing new ideas. At this point, you won’t have many processes and you should be tweaking your business model to get a sense of the market and how to turn a profit. Although it’s an exciting time, it’s where most businesses fail.
In the growth phase, your clients should be able to explain your business model to other prospects. Keep your pricing level with modest increases for new clients. Turnover should be decreasing and you should no longer be worried about making payroll and keeping employees. The growth phase is where your business solidifies its stance in the marketplace.
Your business should feel more secure than you have at any other point since you started. You are probably able to take regular dividends out of the company. Professional management should be running the day-to-day business. And while some emergencies demand your attention, things are relatively predictable. Mature businesses may not set the world on fire, but they are dependable and consistent. Many mature businesses have a strong cash position and grow through acquisition or spin-offs of other product lines. Mature businesses can defend their market position and expand into new territories using their brand recognition.
If revenue has declined for three consecutive quarters, you probably entered the declining phase two or so years ago. Take action and start looking for ways to innovate. If owners are focused on what they can take out of the business before they retire and aren’t willing to invest in new technology, people, or marketing, it’s a sign that they’re in decline.