Understanding the Business Life Cycle:
The life cycle of a business, from inception to maturity, moves through a various stages. Recognizing, understanding and using these stages to your advantage improves your chances of making proactive decisions when confronting internal and external pressures. Each stage presents different issues, requires different growth strategies and demands different skills from the owner. The first stage of any business is existence. Your idea is now a reality and you are "in business." The business is you and you are the business. The two are indistinguishable. Normally, there are few employees and you perform almost all functions necessary to run the daily operation and grow the business. Depending on your leadership style, you very likely, make all the decisions, manage by crisis and achieve growth through creativity. "Do whatever it takes to keep the business going." The next stage can be a time of great stress. There is often a need to expand, putting strain on facilities, funds and management skills. Continued commitment of your time and energy minimizes the possibility of you developing any autonomy from the business. You will need to clarify company direction and utilize employees more effectively. During the third stage, the number of personnel continues to grow and more talent is available. The success of the business, at this stage, may require expansion of operations. As you consider expansion, you may also want to consider the option of selling before moving forward. If you choose to continue with the business, you will definitely, need to fine tune your delegation skills. You can no longer run the business overseeing every function or being involved in every decision. Letting go and allowing your employees to reach their potential is essential to continued success. In stage four, the business is really taking off. This is the time of profitability and growth based on the previous efforts you have invested. At this stage, your involvement with the daily minutia of the business is normally less, allowing the business to become more and more autonomous. Careful planning and resource utilization to maximize this stage in the business is critical for highest profits. When you reach the mature stage of a business, resources are maturing. It is a time of level growth and maximum use of resources developed over the years. The company continues to grow and become less dependent on you. The ideal number of personnel is available for executing tasks and growth is accomplished through the collaboration of management. Your business may track linearly through these stages. More than likely, it will skip a stage, repeat a stage or stay in one stage indefinitely. The value in understanding what stage your business is in is knowing what stresses to expect, what skills you may need to acquire and what the next phase might be. In reality, a business is like any other dynamic entity, it does not necessarily follow theoretical models. ©2000-present Flight Unlimited - All Rights Reserved |
