A business, much like a human being goes through stages of life. The way we go through childhood, teenage, adulthood and old age, our business also goes through phases after its conception.
It is important to identify the stage your business is at as it will enable you to create a roadmap to the next stage. Once a business is conceptualised and you start working on it, it goes through Five Stages…
The first and the most obvious stage is Struggle. This is where you focus is on bringing in new customers and the business needs constant attention and investment in terms of time and money. It is a stage where every function of the business is completely dependent on the owner and the team also looks to the owner for guidance.
Then comes the Survival stage where you have a tried and tested business model and are sure that it is workable and profitable. Your business will probably go through some cash flow problems and meetings targets and goals may be a challenge. The entire business revolves around bringing in more money.
Stability comes next. This is when you see the profits flowing in. There is stable flow of cash and the business now has a strategic direction that it is moving in. The future of the business will also start to become clear to you. The best part is that you will have set systems and processes and it will not be completely owner dependent.
The fourth stage is Success. Your business will go through rapid growth, financially. The business owner is no longer involved in the day to day functioning of the business. The tasks will all have been delegated and the functional heads drive the business forward. This is where a business goes from being just any business to a Big Business.
The last identifiable stage of a business is Scale. The management here is completely decentralized and all the business operations run independently. The best part is that the business owner is completely out of the system and the business is driven by a stable and capable team. The business is rich and can be scaled in any direction you choose.
While it is important to identify the stage you are currently at, it is equally important to define what each stage means for your business and to come up with an action plan to climb up to the next stage.
Which of the five business stages is your business at?