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Much like a person, a business goes through several development stages in its lifetime. It does not matter how large or small an organization is, all companies must pass on from each of these stages. It is only once each of these stages has been completed successfully, that the business will move to another stage of its development.
A fledgling company is determined to be progressing by authorities such as Global Resources, if it graduates from the initial stage. This does not mean, however, that the battle is over. It is important to understand each of these phases to be able to understand whether or not your business is succeeding. Here are the developmental stages of all organizations.
Existence Stage
This is when the company has just sprung into being. A large amount of the work that is done is based solely on your actions and efforts. This can be one of the more challenging phases of a startup. This is because your basic need depends on consumers. You need to strike the perfect balance between a marketing plan and a product plan. Failure to garner the appropriate number of customers will result in the failure of your business.
Endurance Stage
This is when you are able to prove that your product or service is marketable. You have succeeded in gathering a certain number of customers. The business, however, needs to be able to produce earnings that is larger than the cost of production. The key to triumph in this phase is proper cash flow forecasting as well as an ability to relinquish control. To be able to survive the endurance stage, you need to have predicted all of the costs that your company will incur once it passed the existence stage. You will also have to develop the internal structure of a business which is based on methods, systems and controls. As a business owner, you need to transform yourself from a person working “in” the business, to a person working “on” the business to become the master strategist of the enterprise. This requires an organizational structure which allows you to delegate functions and responsibilities to people in your business who then become accountable for the critical functions of the business.
Achievement Stage
This is when you have built a profitable business on a solid foundation which can be sustained. This is when you will be able to enjoy the fruits of your labor. It is also when you have to decide what it is you wish to do with your company. You can choose to stay as you are or to continue growing your company as well as your product. This is also a phase that many owners decide to remove themselves from the organization by selling it to an outside party or setting up a succession plan for the business with family members or key employees.
Launch Stage
This is the stage that you encounter if you have decided to grow your business beyond your current product, services, or geographic territory. You will have to reorganize your business to suit the situation that you currently find yourself in and what you need to do to take advantage of a plan for major growth. This may mean hiring new people with different skill sets to take advantage of new opportunities for expansion of the business to help you grow your company. It is important to proceed with caution at this phase as it is quite easy to reverse all of the success that you have achieved, if your planning is deficient. You need to carefully consider both the opportunities presented and risks involved in any plan for major growth.
Established Stage
This is when you have accomplished all that you have endeavored to do. Despite the success that you enjoy, you need to be aware that long term success is not automatic. You will have to make an effort to remain successful. The business world is constantly changing and companies are rising and falling with changing trends. You need to remain ahead of the curve to be able to continue to be relevant in your field.
It is important to understand each of these phases as well as the obstacles which they produce. It is only then you will be able to avoid the snares of the business world and move on to a more profitable stage with long-term success.
