Startup Stages of Growth
You’ll find experts dishing out a variety of opinions on the stages of startup growth, but one thing is for certain: startups go through phases of growth and expansion. Here are the most crucial stages in a company’s growth:
Idea and Research
Everyone can have a big idea, but being able to make it a reality is more important. Even more important than that is making sure the idea reaches the target audience. Ultimately, this is the foundation of your startup and plays a big role in its success even before the launch.
A buyer persona comes in handy during this stage in order to focus your ideas. It will also pay to create a business plan or growth strategy for the coming years.
At this stage, you commit to taking steps to turn your idea into a reality. Develop your product prototype, set up milestones, make official documentation, and start building a team.
Most of the expenses would be from your capital or investors, so try and spend as little as possible.
A key part of the growth stage is having a reasonably stable customer base, which means you are able to improve by gaining feedback from customers.
Aside from this, revenue is now in place for recurring expenses. By this stage your initial KPIs have also been identified, so you can attract investors or take loans for equity or interest share from future revenue.
After steadily growing a customer base in the first few years, you must then scale up your services by launching in a new location or offering a wider range of services.
Consider having standby funds in place for expansion, which may include hiring new employees or refining your implementation process. During this stage, CEOs often face new cash challenges and find their time more limited than ever. Consequently, many CEOs struggle because they haven’t prepared a growth plan ahead of time.
This is the stage every startup CEO envisions their company reaching a few years down the line from initial launch.
By this point, the company has amassed multiple streams of stable income and can easily attract more customers and investors.
When this is the case, you may no longer want to be classified as a startup. Depending on your mission and overall vision, you may decide to make further expansion plans that take you out of the startup category.