When the design aspects are complete, we develop prototypes. In ideal scenarios Step 2 only takes place once, however with PCB designs it is necessary to usually run multiple prototypes to check a list of items to allow for the idea to go to manufacturing.
The prototyping is done to not only see the physical product, but also to do functional testing, regulatory testing, environmental exposure such as heat and vibration, and do PCB layout optimisation among many other items. You may have a product that works the way you want it to work, however if you want to ship it and sell it in certain geographies and industries we will need to go through extensive testing and revisiting prototypes until the standards are met.