Four stages of business growth

Four stages of business growth

1st phase of the inauguration:

There are several reasons for starting a business, but the most important values ??in business management are those of the founders. We can see that society is the founder's most important skill in his mind. For example, if the founder is an engineer, he will focus on production rather than sales and marketing, which should not be overlooked. The main efforts focus on the acceptance of the product in the market. If the owner can meet the needs of the business, ie time, energy and finances, he can move on to the second step. Otherwise, he / she will have to cease his / her job as the time the company receives to stay in a particular phase is limited. Here, the main goal changes to establish the company and generate profits. With this financial leap, the company needs to formalize the system and keep records, and an unqualified manager can not handle all of this. After that, due to the increasing activity of his company, it will be necessary to change the management style.

2nd stage of growth:

By the time a company reaches the stage of expansion, it should be able to make a decent profit, but not for the owner. Indeed, he is invested in the company to meet the capital needs of the company. Coordination of functional management activities takes time. This requires a complex organizational structure that focuses primarily on functional lines. Now, R & D is being put in place to expand the product line. At first, it will be on a smaller scale due to lack of capital. If management continues to change its environment, the company may remain in this phase for a period of time. In many cases, homeowners sell their business at this stage with significant benefits. The growth of new markets and products requires more funding. This phase faces larger competitors who manage the situation by creating problems. This stress can also take the form of very low prices. At this stage, trade is the biggest threat and, if not managed properly, can result in the company's demise. As the business grows, geographic exchange and distribution must be expanded. Therefore, "supervised supervision" is necessary at this time. When new competitors enter the market and the owner wants to keep his shares, he has to raise more funds or acquire partners.

Extension 3rd step:

Correct management reports, budget control, distributed powers and a formal accounting system are required for this phase. At this stage, the basic adaptation will be to systematize the administrative roles essential to the survival of this phase. The expansion phase requires long-term stable resources that are important. If there is no plan for the partners, this phase must now be reviewed. Undistributed profits are the most important types of funds, but distribution is the particular attraction of investors. At the moment, these are inevitable. Today, the company's long-term credit history is useful, but the company must provide security in the form of assets.

4th step:

This phase is mainly about controlling expenses and finding opportunities for growth and productivity. The direction of authority can refer to functional lines or be reorganized with production lines. Due to the strong price competition, the production department should therefore be at the center of the concerns and the authorities should report the innovative improvement measures.

Today, they are investing in key sales and marketing battles, as well as hardware maintenance and classification. The business grows so much that there is enough income to cope with this situation, but sometimes a long-term burden is favorable. At this level, the company may restrict or continue operations, generally through acquisitions or contracting, to become a large corporation.

Whatever the situation, the shareholders put pressure on the managers to ensure the future of the company. However, the time for the big test lies with the founder. He built his business with great effort and sacrifice, and he is now being asked to give it up.