It’s a known fact that the business terrain in the UK is highly competitive, especially for independent business owners, who make up 99% of the business population. With over 5.5 million small and medium-sized businesses striving to excel in the UK marketplace, success boils down to how much entrepreneurs can reduce risk and grow. Executing business growth plans without having a consequential cash crunch that makes covering normal business expenses like bills and payroll difficult requires a balanced understanding of specific business strategies required at various stages of the business.
Growth Strategies at the Different Stages of Business
A typical business undergoes five stages in its cycle: launch, growth, shake-out, maturity, and decline.
Launch
During the launch phase, businesses are new to the market, and consumers have low awareness of their product offerings. This usually causes sales to slow, which increases the risk of incurring losses. At this stage, capital preservation is key. There are two ways independent business owners can preserve their capital: savings and investment. With the help of modern finance software like Coinpass, businesses can build corporate investments to grow their business revenue.
While allocating a certain percentage of business revenue for investment is crucial to long-term wealth building, businesses in the launch phase must engage high-value marketing strategies for customer acquisition. New businesses must employ modern marketing strategies like search engine optimisation (SEO) for podcasts, website content, and social media posts. In addition, AI search is redefining how users find valuable information and products, making it necessary for businesses to learn AI search engine optimisation (AEO). Using AEO, business owners can position their websites for AI engines like ChatGPT and Gemini as go-to options for chat referencing.
Growth
Businesses in the growth phase experience quick sales growth with a growing number of customers. At this point, the business needs to focus on expanding operations, which may require buying more software or equipment, hiring more staff, or moving to a bigger location. The risk at this phase, however, lies in the fact that the revenue generated may not suffice to keep up with the expansion requirements to remain profitable. This is one of the reasons many businesses struggle to grow. Without an effective strategy to enhance business workflow, most businesses end up stagnant, unable to realise more revenue.
At this point, businesses can continue to support growth while ensuring their cash flow is positive by employing automation systems to speed up processes. For instance, automated AI agents can support customer service as chatbots for basic FAQs. Also, using CRM software can help automate lead generation, qualification, and follow-up sessions. With advances in AI, nearly all online business processes can be automated and optimised.
In addition, businesses in the growth phase can begin to move from initial pricing targeted towards attracting customers to value-based pricing that supports business growth. Sometimes, businesses may need to create new premium products or curate a product or service package to switch to a value-based pricing model. Overall, cash flow in the growth phase tends to be abundant, providing businesses with more opportunities to invest extra profits after budget cuts for expansion.
Businesses in the shakeout phase are doing a good job of securing a share of the market. However, sales are slower, and weak businesses are forced to close up due to market saturation, monopoly by top brands, and entry of new competitors to the market. With businesses registering their peak sales, profits start to decrease, and increased spending to gain new customers usually yields fewer results.
In the shakeout phase, businesses must prioritise providing customers with the best experience possible. Maintaining a good customer base is important for maintaining good profit margins. Customers are only as loyal as the value a business provides; anything short of ideal may spur customers to seek better alternatives. One of the most overlooked concepts in business that is important in delivering top-notch customer experience is inclusivity. For example, a beauty brand that designs makeup products for all skin types should have shades for each skin colour. Business owners must stay true to their mission to provide their services to their stated target audience.
Another key part of improving customer experience is gathering feedback and implementing changes that favour both the customers and the business. Overall, businesses in the shakeout phase usually experience more cash flow and increased profit as a result of a built customer base as they move towards the maturity stage.
Maturity and Decline
Businesses at the maturity level have solidified their presence in the market. Sales at this stage start to slow, profit margins reduce, and cash flow plateaus. At the maturity stage, business owners can either reinvent it or leave it as is. Leaving the business to run without
reinvention ultimately leads to a decline in sales, which incurs losses. Most businesses choose to reinvent at this stage. Reinventing can include releasing new products, changing the target audience demographics, adopting new marketing strategies, for example, social media marketing, or doing an overhaul of the business branding. At the maturity stage, business owners who choose to reinvent allow their business to remain relevant in the face of new market dynamics. Businesses that refuse to reinvent and extend their business life cycle ultimately lose their competitive advantage. At the decline stage, the only feasible option left for a business is to exit the market.
The Path to Sustainable Business Growth
Growing a business independently can be challenging, but it gets easier by understanding the exact stage the business is in and the peculiarities of that phase. Businesses go through five core stages, each of which requires a unique focus for growth. During launch, the focus is on attracting new clients and preventing bankruptcy. Employing the services of a financial advisor goes a long way to ensuring a business’s finances are coherent and solid. In the growth phase, businesses must learn how to expand operations while maintaining profitability. Businesses in the shakeout phase need to prioritise their customer experience, while those at the maturity stage must decide either to reinvent or prepare to exit the market.
This is a submitted article written by Paul Anderson Oyelade.
