stage of development in business plan

Write a business development plan

Now that you’re in the growth stage of your business, set things in motion with a business development plan.

A business development plan sets goals for growth and explains how you will achieve them. It can have a short-term or long-term focus. Review and revise your plan as often as you can. And keep building on it as your business evolves.

How to write a business development plan

Your business development plan is your roadmap to growth, so make it clear, specific and realistic.

What to include in a business development plan

• Opportunities for growth: Identify where growth will come from – whether it’s in creating new products, adding more services, breaking into new markets, or a combination of these.
• Funding plan: Determine how you’ll fund your business growth. How much capital do you already have? How much more do you need and how will you get it? Check out our guide on financing your business.
• Financial goals: Work out what revenue, costs and profits you’ll have if things stay the same. Use those numbers as a basis for setting new, more ambitious financial goals.
• Operational needs: Identify what things about your business will need to change in order to achieve growth. Will you need extra people, more equipment, or new suppliers?
• Sales and marketing activities: Figure out what sales and marketing efforts will effectively promote growth and how these efforts will change as the business gets bigger and better. Make sure your sales and marketing plan is sturdy enough to support your growing business.
• Team needs: You may need people to take on some of the tasks you’ve been doing. Think about what parts of running the business you enjoy most – and you’re good at – and what parts you might want to delegate to others. And give some thought to the culture you want to develop in your business as it grows. Check out our guide on hiring employees.

A sample business development plan

Avoid these common business development mistakes.

• Thinking short-term instead of long-term
• Underestimating how much money it will take to grow
• Not budgeting enough money to cover the costs of growth
• Focusing on too many growth opportunities: think quality, not quantity

Micro-planning can keep you focused

You may want to create some micro-plans for specific growth projects so their details don’t get overlooked. And you can build in some KPIs to measure your progress and successes. As your business grows, take note of your progress and make periodic adjustments to your business development plan to make sure it’s still relevant.

Support is out there

Remember you’re not the first to go through this. Seek out mentors, advisors or other business owners who can help you with your planning. Your accountant or bookkeeper may also be able to help or point you in the direction of the right people.

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

Growing your business

Are you ready to drop the hammer and take your business to the next level? Let’s look at how to grow.

Before you leap into growth, reflect on where you’ve come from. Find out the stage of business growth you’re at.

Understanding your business performance will help you grow. Check out common examples of small business KPIs.

Increasing sales revenue is one obvious way to help grow your business. But how do you sell more?

You can grow your business by selling more things to more people, or fewer things to fewer people. Let’s look at how.

You’re all set to grow your business. But there’s so much to keep track of. Xero’s got resources and solutions to help.

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What Is the Development Stage in the Life Cycle of a Business?

What Is the Development Stage?

Development stage refers to the first phase in the life cycle of a new business. During the development stage, companies focus on establishing themselves through activities such as market research , product development, and the construction of new manufacturing facilities.

The different phases in a business’s life have been characterized by economists as the business’s “life cycle”. While the development stage is the first in this cycle, it is followed by periods of market introduction, growth, maturity, and decline.

Key Takeaways

• The development stage is one of the stages in the life cycle of a new company.
• The development stage is considered a very difficult stage and is characterized by a high probability of failure.
• For investors with a high capacity and willingness to bear risk, development-stage companies can occasionally offer spectacular returns.

How the Development Stage Works

Development-stage companies have often not generated any revenues. At the same time, they may be incurring mounting expenses as they seek to ramp up operations. Development-stage companies are prone to chronic cashflow shortages and have a high rate of failure. Investors in development-stage companies must therefore have a high risk tolerance , and often seek to reduce their risk through diversification.

For investors who have the financial resources and temperament necessary to bear the associated risks, investing in development-stage companies can occasionally produce fantastic returns. Whereas most development-stage companies are unlikely to reach success, the few that do become successful can attain valuations that are tens or even hundreds of times that paid by their earliest investors. For this reason, venture capitalists (VCs) and other early-stage investors often find that a very small percentage of their portfolios are responsible for a large percentage of their overall return on investment (ROI) .

The development stage is a famously difficult period in the life of any business, as the company’s founders must attempt to develop their business model despite while also relying on relatively meager and uncertain financial resources. Oftentimes, early-stage investors will only provide funds in stages; the next installment of their funding is conditional on the achievement of specific performance objectives.

For developing companies, this uncertain funding outlook can make it challenging to attract and retain new customers and employees who may be reluctant to sign contracts with a company that might prove unable to deliver on its promises. Similarly, investors face a very high risk of failure when backing development-stage companies because these companies’ business models are still relatively untested. When these investments fail, moreover, investors often lose all of their invested capital.

Example of Development Stage

An example of a development-stage company was Pebble Technology, an early product innovator in the market for wearable devices . Pebble Technology created one of the first commercially viable smartwatches, attracting widespread attention through its successful crowdfunding campaigns.

Through its flagship product, the Pebble Watch, the company attracted growing demand from consumers before encountering cashflow difficulties in its attempts to scale up production. Eventually, Pebble Technology became insolvent and sold off its assets to its competitor, Fitbit ( FIT ).

MIT Technology Review. " How Pebble Is Killing It on Kickstarter ." Accessed Nov. 14, 2021.

fitbit. " Fitbit, Inc. Acquires Assets From Pebble ." Accessed Nov. 14, 2021.

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From Idea to Maturity, the Five Stages of Business Growth

Whether attempting to increase market share, improve profitability or add staff, every company is trying to grow. Doing so means navigating complex challenges and finding inventive routes forward during that business growth process.

Following are the five stages of the business lifecycle and the steps you can take to increase your chance of success along the way.

Development Stage

Whether you’re pursuing a lifelong dream, or you’ve identified an unmet need in a specific market, taking the initial steps to start your own business can be an exciting time. But with so many factors to consider, the process can also be confusing and challenging. If you’ve made the decision to take the entrepreneurial leap, doing so with a clear plan in place—a roadmap of sorts—will help guide you along the way and prepare you for the inevitable twists and turns that come with starting, and growing, a new business.

So, where do you start? Your best bet is to develop a detailed business plan. Whether you’re in need of funding, a set of goals (and timelines to meet them), a detailed customer profile, or all the above, statistics show that new business owners who start off with a plan are twice as likely to succeed as those that don’t.

With countless resources online to choose from, settling on a specific business plan template can feel a bit overwhelming. But remember, there are no right or wrong answers. The best first step is simply to take one. To help you get started, take a look at this comprehensive, step-by-step business plan resource from Inc. Magazine .

Remember, every business is unique, and your business plan will be as well. One thing that every plan should include, however, is a realistic reflection of your company’s aspirations. It’s also important to understand that most successful business plans regularly evolve over time as reviews are performed, milestones are reached, marketing plans are modified, and new targets and objectives are identified.

While business plans can go a long way in helping you build a business that’s more attractive to outside investors, during these early stages of a business, it’s important to continue creating a foundation that sets you up for success, regardless of outside interests.

That foundation will look different depending on your business’ focus and your ultimate goals, but here are a few items to consider when setting yourself up to take your first big steps into the market:

• Identify how your concept/product/idea fills a need in the market
• Gauge how well accepted it will be in the market
• Determine your ideal outcome – from profits to adoption-rate to overall effectiveness

Start-up Stage

Once you have a plan in place, it’s time to put it into action—kicking off the next stage of business growth: the start-up stage. During this time, you will test the viability of your big ideas—as well as the effectiveness of your capabilities—and this stage can represent a series of make-or-break moments for many small business owners.

But we’re not talking pass/fail tests here. If things aren’t progressing the way you want or need them to be, it’s okay to reassess and pivot as you go. This flexibility will allow you to figure out what changes need to be made to build a healthier, more resilient business. And a large part of building a stronger business comes with attracting (and holding on to) a team that shares your vision and mission—one that can help you do the work necessary to carry out your collective plan.

At this important stage of development, the people you hire can have a lasting, positive impact on the culture, values, and performance that defines your business. That’s why it’s important to build a team that doesn’t just share your goals, but also has the skillset and diversity of ideas necessary to help you achieve them. It’s a tall task, to be sure, but it is possible. And if you’re struggling to find (or attract) the employees you need to make it all happen, there are experienced, outside resources, like G&A, who can help you navigate the recruiting process and build a pipeline of experienced talent.

Another key to creating and maintaining positive momentum, is having the necessary capital on hand to make it all happen. Whether raising money, finding investors, or managing cash flow, knowing your options, and maximizing their potential, can go a long way toward giving you the stability you need to help get your business off the ground.

Read about five different funding options to consider from Forbes .

Ultimately, the start-up stage is when you start to put all the pieces together. As you continue to establish the core elements of your business, a few key areas to focus on include:

• Establishing a customer base and market presence
• Managing accounts in a way that best suits your operation
• Navigating the way your funds are sourced and allocated

Growth Stage

Once you’ve hit a comfortable groove, you’ll be ready to look ahead to the next phase—growing your small business.

The potential for growth is an exciting prospect but knowing how (and when) to make it happen can be a bit of a strategic balancing act. Matching the pace of your increased cash flow and client base without losing sight of the core tenets of your business, for instance, is a struggle that many successful companies have had to navigate.

So, before you fully lean into a growth spurt, take time to review and recalibrate your existing business plan to match your new reality. Doing so can help you more easily determine what is necessary from both a financial and interpersonal perspective. This practice can also provide you with a better understanding of what you’ve achieved, while helping you identify unforeseen opportunities or specific areas for improvement in your business model before plotting your growth strategy.

These strategies from Small Business Development Center experts across the country can help get the ball rolling.

There is no one-size-fits-all solution when planning your next steps, but here are a few simple questions that can help guide your way:

• What’s your small business best at right now?
• What’s driving profits?
• What does the current competitive landscape look like?
• What are current market conditions?

As a growing business, your goal is to identify your market differentiators and what’s driving your profits, then come up with strategies to efficiently expand both.

Expansion Stage

Characterized by a new season of rapid growth and increasing distribution channels, your expansion stage is when you test the boundaries of what is possible for your small business.

At this point in the life of your business, finding ways to increase your market share or revenue streams requires a very detailed understanding of your company’s strengths and what they’re worth on the open market. With that understanding in place, you can begin your evaluation of potential expansion routes and chart a course into new markets to reach new customers. To see how that expansion might look for your business, check out these recommendations from the U.S. Small Business Administration (SBA) .

Regardless of the shape your expansion takes, the key to doing so successfully is to understand the limits of your business while aiming to maximize its potential. One expansion solution, for example, might involve merging with or acquiring another business. Here, the SBA explains the difference between the two and their functions; but these are just two of the many options at your disposal. Expanding with success means finding the solution that best fits your unique business.

Maturity Stage

When your company reaches the maturity stage, it’s the result of a lot of hard work and perseverance, along with a business idea that has proven its worth. Through strategic planning and maneuvering, you and your team created the perfect climate for success—helping you to evolve from start-up to industry standard bearer. It’s now, for mature businesses, that the importance of growth merges with the need for retention and other business interests.

Although maturity is considered a final stage for business growth, it is not a finish line, or a time to sit back, put the evolving strategies and planning aside and coast along for years to come. Businesses are living, breathing entities. Long-term success requires inspiration, continued commitment, and an ability to meet the needs of an ever-changing world and customer base with new products and ideas. Stagnation, at this point, invites greater competition and makes reacting to market trends more cumbersome.

There are any number of ways to keep your offerings fresh and navigate a potential decline stage. Here are a few creative suggestions from the small business section of the Houston Chronicle .

Another way to help ensure continued momentum, is to revisit your business plan once again, and determine whether pivoting to a new expansion stage or considering an exit strategy is the way forward. Evolution, expansion, and reinvention are the hallmarks of any business with a long history of success. If you take into consideration what’s right for you, your team, and your business, the sky's the limit.

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