By Dave Hickey
For any business to move successfully from start-up to scale-up it needs to carefully navigate each stage of its growth cycle. So, being aware of which stage of the cycle the business is at, is itself a very important if, for example, if you’re looking to attract funding.
The stages of the process and the speed at which a business can move through them depends on a lot of factors – a major one being the industry or sector in which it operates.
Availability of funding also changes depending on the sector as well as the development stage of the business.
The key stages of a business development cycle are:
- Validation – Does the product or service solve a problem?
- Early-stage – Does this solution answer a market need?
- Later-stage – What business model will work best?
- Scale-up – How can this be brought to a larger market?
- Maturity – How to deal with increased competition and lower margins?
- Turnaround or Decline – What changes are needed to the business model?
The table below shows some of the typical characteristics of the first four phases for a technology or med-tech business. You can use this model to plot your own business.
|Validation||Early stage start-up||Later stage start-up||Scale-up|
|Focus||Problem-Solution Fit||Product-Market Fit||Business Model Fit||Organise & Simplify|
|Product||Prototype||Minimum Viable Product||First Generation||Product Replication|
Innovation is different at every stage; in the validation and start-up stage your main focus is market validation, funding and surviving.
In the scale-up stage it’s all about entering new markets, expanding and hiring.
Lastly, in the mature stage you are facing an increasing number of competitors and lower margins.
In the turnaround stage you go back to surviving and making the transition to new business models.
One of the major challenges for any new business can be the length of the sales cycle particularly in the Validation and Early stages.
Knowing what funding is available at each stage of the process, and how it can be accessed are vital parts of leading any early-stage business.
Organisations such as LEO, Údarás and WestBIC can provide great advice and support depending on which stage the business is at. Innovation hubs like PorterShed and Galway Technology Centre are where you can meet people who are going (or have gone) through the same challenges as you.
A good professional adviser is a key resource.