What is the Second Stage? Often referred to as the ‘survival’ stage, businesses in this stage of growth have moved beyond simply being a startup but can not quite rest on their laurels just yet.

The number of stages of business growth will vary as a whole dependent on the source you refer to. But for the most part, the second stage is similar across the board.

It is the point at which your business has found its feet and is beginning to grow much more rapidly than before. But what does this look like?

Staff Hierarchy

During the second stage of business growth, your staff hierarchy is likely to see some quite significant changes. It is during this period your recruitment is likely to be at its fastest.

As a business owner, it is still likely you will be involved in all aspects of the business and your team will still take on a fairly flat hierarchy.

There may be one or two managers in place, but you have not quite entered a full management team hierarchy. At this stage, it is also unlikely for managers to act independently and be in a position to make high level decisions without sign off.

During the second stage of growth, it is essential to ensure you hire the right people for the right positions. It can be tempting to stay loyal to those who have been there from the beginning and whilst this is nice in theory, they may simply not have the skills required to allow your business to continue to grow at its current rate.

In short, as an owner, you will be slowly moving toward a full leadership role, but will still be very hands-on until the latter part of stage two.


As discussed, this stage of business growth refers to companies who are no longer in the financial position of a startup but have still not financially hit maturity.

If within this stage, your company will be experiencing strong and steady revenue growth and it is clearly demonstrated that your business plans have paid off. It is also at this stage you will experience a reduction in turnover.

However, whilst everything is going well, financially, this can be one of the most vulnerable stages. When experiencing strong growth, it can be tempting to reinvest, whether that be in additional staff, processes or resources.

But, if not balanced correctly, this could leave you without enough capital in the bank to meet your financial obligations. Therefore, business finances within this stage require an air-tight balancing act to ensure that financial obligations are satisfied by growth can confidently continue.

Stages of the second stage

As mentioned, the overall number of business growth stages will vary dependent on the source. One of the reasons because of this is the sub-stages which can occur.

During the second stage of business growth, it is said that business owners also go through 4 sub-sections of growth themselves.

These are:

  1. Overwhelmed – It is at the beginning of stage two, that everything can be rather overwhelming. Business is growing faster than it ever has, and not only are you needing to keep up but also plan for how to keep that growth steady in the future. Often realised they don’t know what they don’t know, it can feel like going back to the beginning of the learning process all over again.
  2. Role change – It is during this time, as a business owner, you will realise a change in your role, moving away from being as hands-on into a more visionary, leadership role. You are likely to remain in the majority of high-level decisions through the second stage, but you will find yourself doing less of the implementation and more of the managing.
  3. Growing to last – towards the end of the second stage, you will begin to feel more confident and looking towards how to expand the business further as it becomes a success. Is this a case of offering additional products and service? Should you enter another location? Or tap into a new marketplace?
  4. Focused opportunities – Settling into your new role as CEO rather than day to day worker, you will be able to see the business from a more objective perspective. This will allow you to notice opportunities and room for growth that you were not able to identify as clearly from the inside.

The second stage to do list

So, what key things do you need to do whilst your business goes through the second stage of business growth:

  • Strongly monitor your capital to ensure you do not invest more than your other financial obligations will allow.
  • Hire the right people. This stage is crucial for your business to grow and if you don’t hire the right people to come onto your team, your business can fail quickly.
  • Review your goals and forecasts to ensure they are growing with you but depict a realistic view.
  • Finally, getting advice from a professional consultant on business strategy and growth is likely to be the most beneficial in this stage in your company’s growth. They can help you understand the new role you need to take, where your business opportunities are and how best to help you achieve your goals.

Shweta Jhajharia is a leading authority on business value building and has created the unique 6M Model. Her work as a business coach for leading companies has been recognised by external bodies and industry panels with over 70 awards. Growth Idea is a business strategy consultancy dedicated to helping companies achieve their full potential. We help business owners move away from day-to-day operations and find new opportunities to further their success.

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