How to Overcome Common Challenges within a Business Growth Lifecycle

Businesses are often referred to as someone’s “baby” for good reason. They have to be born, raised and matured, and require careful tending, somewhat akin to raising a child. Overall, there are 5 stages that business development is divided into — with common growing pains in each one.

This doesn’t mean that every business owner will not encounter unique challenges and obstacles specific to the growth stages in their business. Approximately 80% of all businesses will fail in the first 18 months; by understanding the different stages of development and with the help of strategic planning, you will position yourself strongly to be among the 20% that don’t.

Here’s how to get the most out of your business life cycle by maintaining rapid growth:


To build an idea into an actual business, you need to create a market demand or establish a consumer base. To do that, you will have to identify your target consumer and brainstorm a marketing strategy with little to no budget. You may have to focus on landing one key customer or client to help get your small business up and running.

From there, you may have to do a round of testing and then tweak your product line or services based on the feedback you get. You will also need to be constantly balancing consumer needs and expectations with profitability.

This is when you are the most vulnerable because you need to keep customers happy and possibly even compete with established businesses with greater market shares; but if you give away too much for too little at this pivotal expansion stage, you will never achieve profitability.


One reason so many businesses never make it past this growth phase is that startup owners cannot accept the demands that building a business place on their time, energy, and finances — so they give up. The three key hurdles to navigate in this phase are:


Become an avid student. Listen to as much advice as you can get. Be ready to constantly tweak, hone, refine, and go back to the drawing board again and again. During this potentially high growth phase, you will make a lot of mistakes – many of them costly – but you need to be able to power through them all. Effectively planning and operating a successful business takes trial and error.

You will also need to assess your own readiness to enter the market you wish to enter and the financial foundation you have under you. You need to ensure that foundation is solid enough to support you and your key employees through some ups and downs.

business growth lifecycle



In this phase, you have proven that you have a viable, workable business model and your cash flow has become positive. You are regularly taking on new customers and your business is generating a regular source of revenue. You also have enough products or services of a high enough value to keep your customers satisfied. Your growth rate has remained stable.

At this stage, your focus shifts from building to deepening your roots. Keep in mind, growth is different from expansion. This is a phase that too many business owners try and skip or move through too quickly. If you try and skip this step, you will pay a high price later on.


Where you may have once been dismissed by competitors, you will now have established yourself as a force to be reckoned with. Competitors within your market share will begin to step up their game. An increase in customers also brings with it an increase in revenue, but it also creates more demand, which you have to meet. Your three key challenges at this stage are:

  • Managing increased revenue
  • Servicing an increasing number of customers
  • Market competition


Perhaps one of the most critical aspects of weathering this phase of business growth well is hiring the right people. Any good founder will want to be very hands-on in the hiring process, but also make sure to develop a positive company culture. You need to ensure you keep the right people, not just hire them.


Sales will continue to increase in this phase, but generally at a slower rate. This can be the result of approaching market saturation or increased competition. In business, you’re either growing or dying, but there are two types of growth. In the last phase (which hopefully you did not skip) you grew downward roots, in this phase, you need to extend your reach. If you don’t, you will find yourself stagnating and stagnation can be a harbinger of doom for a business.


You have worked hard to get to this stage, it is easy to fall into the trap of wanting to sit back and simply enjoy the fruits of your labor. If you worked hard to deepen your roots, your business is likely enjoying a period of stability, which can be tempting to take advantage of.

Taking a breather (or a long-awaited vacation) at this stage can be a good thing, but it should be very short. In fact, this might be a good time to recharge your batteries and gain some new inspiration, because expansion will present challenges similar to the initial startup. Three key challenges at this stage are:

  • Expanding carelessly
  • Not expanding at all or aggressively enough
  • Managing your risk


In this phase, you will have to make many of the same choices you did when you were getting your business started, but now the stakes are much higher. Do your research diligently and move cautiously. This is most likely not the stage to adhere to the advice “go big or go home” – although “big” is highly subjective. If you go too big, you become overextended and lose your business; if you don’t go big enough, you stagnate and die.


At this stage, the market matures, sales begin to slowly decrease and profit margins grow thinner while cash flow stays somewhat flat. Your business could still be growing but not as substantially as before and you enjoy a dominant market position. Hopefully, by this time your management is decentralized, adequately staffed and experienced. The goal at this stage is having a business that can run itself. This is the time to take a breather and plan your next move carefully.


At this stage, you need to decide what you want to do next. Your business is going to need serious overhauling to stay relevant. You have to decide if you want to be the one to do it or start fresh on something new. At this stage, you either need to come up with a brilliant idea to renew, refresh and rebuild your brand or plan your exit strategy.


Take the time you need to really decide what you want and what you are best at. Some people are far better at building a business than managing one. If you decide to sell and build a new business, you take all of your knowledge and experience with you. If you decide to give your baby a rebirth, it will bring with it a whole new set of challenges.


All businesses will decline eventually. Some find what they need to totally reinvent themselves and carry on, others do not. Sometimes, a founder can guide a business through decline and rebirth, some need to step down and hand the reins over to fresh blood.

The same way that almost all humans are born, survive the toddler years, enter and exit some kind of formalized educational program and hopefully become productive members of society, businesses also have an almost singular course that they travel. By understanding these phases and accepting that it is a marathon, not a sprint, you can successfully shepherd a business into full maturity and beyond.