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subject: 5 Defining Stages Of Business [print this page]


Most businesses start out as a simple "a-ha" moment, an idea. They begin to grow, become alive and begin to create an identity. As each of these businesses develops they will experience common problems and as they pass through the five stages of business growth.

Stage 1: The Creativity Stage

This is the birth stage of the venture and where the idea for the business was conceived. The business owner is full of optimism and energy is traditionally high. The owners or the founders are usually technically or entrepreneurial oriented and very involved in the operations of the business and activities are strained by limited resources. The main focus is obtaining customers.

Stage 2: The Survival Stage

Typically after twelve to eighteen months in the creativity stage, a business will move to the next stage of business growth - The Survival Stage. At this stage the business is driven around the sales effort since with no sales, there is no survival. The business will begin to look for any sale possible no matter how big or how small just to make an impact on revenue. During this stage a business usually finds a lucrative niche and a pattern for success and repeat business.

Stage 3: The Systematic Stage

When a company reaches this stage, they are experiencing on-going and repetitive revenue, have a significant increase in the number of clients, employees and transactions and begin to apply a more systematic approach to running their operations. A solid management structure is in place with the operation still under a high degree of control of management with the owner playing a more active role in strategic planning.

Stage 4: The Delegation Stage

At this point, the business is thriving and profitable. The business begins to develop a decentralized management structure and decision making is pushed down to alternative levels allowing mid level managers to focus on responding to market conditions, new products and newer strategies. This is an important stage in a company's growth, if the owner rises to the challenges of growth both financially and managerially, it will become a big business. If not, it will usually be sold.

Stage 5: The Maturity Stage

In this stage, the company has now arrived! At this point, one of three things have happened: (1) The business experiences a breakthrough and redefines its business strategies, structure and process or (2) The business plateaus, reaching limitations to its growth or (3) the business declines and fails.

by: Kellie D'Andrea




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