Stages Of Business Development | 5 mins read

The 4 Main Stages of Business Development

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Hanh Truong

By Hanh Truong

Introduction to Stages of Business Development

The stages of successful business development are phases that represent a company's growth and expansion. Also known as a business life cycle, these stages entail different achievements and challenges a company experiences during its growth. By understanding an organization's current position in its development, executives can create effective and proper strategies.

The 4 Key Stages of Business Development

Commonly referred to as BD, business development encompasses all the activities, processes, and relationships that help a brand build long-term value. Effectively carrying out the tasks for expansion and development will promote brand longevity and success. It will also help companies move through the stages of business development seamlessly. The following is a comprehensive overview of the business life cycle phases.

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Stage 1 - Start-Up

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The start-up stage of the business life cycle is when an entrepreneur's ideas materialize. This is oftentimes considered to be the riskiest phase of small business development, as launching a company is notably difficult. In fact, statistics from Bloomberg show that 8 out of 10 entrepreneurs who create a business fail within their initial 18 months. This is frequently the result of mismanagement, insufficient data, and lack of funding.

Therefore, during the start-up phase, business developers need to be diligent. They must invest a lot of time to ensure the fruition of their ideas. This entails strategizing marketing campaigns, raising brand awareness, and surveying customer preferences. Other growth activities that are crucial to this stage include the following-

  • Recruitment - The company will need employees to manufacture, strategize, and serve customers.
  • Acquire leadership skills - Entrepreneurs need leadership skills to effectively delegate tasks, drive the company forward, and manage employees.
  • Build company culture - Fostering a creative and welcoming company culture will enable the brand and its staff to thrive
  • Assess data - The start-up phase requires risk-taking, which means executives need to be data-driven as they calculate their movements to avoid delays and threats to the business.
  • Learn - Business leaders need to be ready to learn from their failures and successes in order to grow.

Stage 2 - Growth

At this business development stage, the company is growing. There is a knowledgeable consumer base that understands the value of the brand and its goods. The company is generating a boosted volume of revenue and there is less customer and employee turnover. Additionally, the company is expanding its consumer market during the growth stage.

Entrepreneurs who have businesses in this stage need to manage their growth. They also should refer to their initial business plans and ensure they are progressing as anticipated. Other key responsibilities at this phase include the following-

  • Create purposeful goals - Now that the company is gaining more resources and capital, business leaders need to create new goals meaningfully and efficiently.
  • Protect the bottom line - As revenue continues to flow into the business, there will be more financial responsibilities. For example, the company may need to increase inventory costs and energy usage. This calls for comprehensive budgeting and resource allocation to make sure the business's bottom line is protected.
  • Make data-driven forecasts - Forecasts will help businesses foresee potential threats and opportunities, and stay on track with their goals.
  • Hire more employees - As customer demand increases, the brand will need more employees to serve shoppers.
  • Vendor management - Businesses need to maintain vendor relationships and source new suppliers to keep up with demand.

Stage 3 - Maturity

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Once entrepreneurs enter business maturity, they will feel more secured. The company will finally have a stable brand awareness among customers. It will also have a strong market presence and can oftentimes be seen as a leader in the industry. There is a robust cash flow movement within the business and management teams can expertly resolve challenges.

The biggest obstacle in this phase, however, is stagnation. Since the business is mature, performance may become stationary, with no boosted profits or sales. Entrepreneurs must then strategize new ways to expand, either through increasing market penetration, tapping into new markets, or by innovating products. Some companies will also decide, at this stage, to merge, sell, or acquire another company to further grow.

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Stage 4 - Renewal or Decline

Generally, business owners will want to prevent this stage. When a business is in a decline, customers will gradually dissipate, as well as profits. This typically occurs when a brand is not actively pursuing growth opportunities during its maturity phase. Unexpected changes in consumer demand and new competitors with innovative goods can also lead a brand to decline.

To avoid decline, businesses need to be reactive, especially to new technology and demands. Leaders need to regularly assess their finances to make sure that revenue is not consistently dropping, as this is a sign of decline. If a business is at this stage, executives can either sell or reinvest their business. Effective reinvestment will allow for potential renewal and can regenerate success.

Key Takeaways to Stages of Business Development

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  • The business development stages refer to phases that almost all companies experience as they grow and expand.
  • Also known as a business lifecycle, each stage entails different challenges and successes a business will endure.
  • The 4 key stages of business development include startup, growth, maturity, and renewal or decline.
  • Understanding these stages will enable effective business growth strategies.

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