The stages of the business growth cycle

Focus: Developing the product or service, establishing a market presence.
Key Characteristics:
- - High investment with little or no revenue initially.
  - Rapid growth potential if the product/service meets market demand.
  - Heavy reliance on external funding.
Challenges: Market entry, customer acquisition, and securing funding.

*A high-growth company (growth phase: startups or high growth) typically has revenues of +25%.

Focus: Expanding market share, increasing revenues, and scaling operations.
Key Characteristics:
- - Revenue growth.
  - Increasing customer base and geographical reach.
  - Investments in infrastructure, marketing, and workforce.
Challenges: Managing growth efficiently, maintaining product/service quality, and handling competition

*A profitable company with healthy growth (profitability phase or maximizing it) grows between 15%-22%.

Focus: Maximizing profitability and maintaining a stable market position.
Key Characteristics:
- - Revenue growth moderates.
  - Focus shifts to operational efficiency and optimizing profit margins.
  - Established brand and loyal customer base.
Challenges: Market saturation and the need for innovation to sustain competitiveness.

*A profitable company with low growth (capital return phase) grows between 5%-12%.

Focus: Addressing shrinking revenues or preparing for exit strategies.
Key Characteristics:
- - Revenue growth slows significantly.
  - Reduced market share and profitability.
  - Potential divestment or downsizing to cut costs.
Challenges: Revitalizing the business or navigating through an orderly decline.

*A company on the path to disappearance (decline phase) grows below inflation, under 3%, or even experiences negative growth.

Some businesses undergo transformation to avoid decline, entering a renewal phase.
Focus: Innovation, diversification, and re-strategizing.
Key Characteristics:
- - Introduction of new products/services.
  - Targeting new markets or audiences.
  - Embracing technological advancements.

The stages are often visualized as a loop or curve:

Startup → Growth → Maturity → Decline → Renewal/Exit.

Source: @BrianFeroldi (X), https://brianferoldi.kit.com/99