4 Stages Of A Business You Need To KnowKehinde LAWAL
Business is attractive when you’re growing your customer base and increasing your revenue. At this stage, you also need to be more focused because it’s easier to shift your attention to things that may inhibit the growth of your business.
A major problem I notice about businesses in Africa is that most business owners don’t know the current stages of their businesses.
This lack of clarity then leads to various assumptions that eventually kills the business.
So if I may ask, what is the current stage of your business? Below is a list of major stages in a business. Read through and decide for yourself.
4 Major Stages Of A Business
According to Forbes, during the startup phase, you spend your time meeting people, coming up with new ways to sell your products or services and consistently implementing new ideas.
You must use this time to figure out a business model that allows for sustainable cash flow, consistent growth and the ability to hire other people to run it. A business that can’t succeed without you working 100 hours per week as the sole “chief, cook and bottle washer” won’t grow.
This is where your revenue start increasing and your business solidifies it’s stance in the marketplace.
Most times, you will have to use your profit to fund your growth or seek outside investment fund through investors or debt.
With investors, you give up equity and gain advisors. With debt, you retain all your equity but will likely have to sign personal guarantees with banks to secure funding.
Your business is set to be mature if your revenue is growing at about 5% annually. Here your company has been around for 10 years and you now feel more secure and confident.
In addition, your cash reserve is huge and the business can take good care of itself without you necessarily being on board.
Most mature businesses tend to grow further through acquisitions or spin-offs of other product line.
Many business owners don’t always know that they’re in a Renewal or Decline stage. This is because they see the market as relatively stable.
A good sign to know that you are at this stage is if revenue has declined for three consecutive quarters(3 months in a roll).
It is important that you know the exact stage your business is currently, and you ask the tough questions. Are you doing the right activities now to ensure your business will have lasting power?
Need help with growing your business, drop your questions in the comment box below.
Yours in Business,