Have you ever wondered where you business is? How much life it still has and what you can expect in the next few years. Well here is the life cycle of a business and what must you be particularly careful about?
Concept: This is when you are thinking about what kind of business you want. What it will look like and what you will sell. This period can last for many years – depending on how quick the entrepreneur is to get to the next stage. Card must be taken to ensure that you are starting a business that people actually want to buy from. Many business ideas never get to be fully fledged businesses – either due to lack of entrepreneur enthusiasm or from difficultly in finding enough funding.
Start up: During this time you will be obtaining funding, finding premises, manufacturers, staff and wholesalers and generally setting up your business. This is really the most exciting time and sets the foundation for the success or not of your future business. Great care must be taken to manage your cash flow and ensure that you have a properly structured company.
Youngster: This is a period of learning and when your business is most likely to fail as many do. A successful business will understand its market and how to ensure that its products meet their needs. During this period you must be ready to quickly change to meet the needs of your customers.
Mature: Your business will now be firmly established, your cash flow consistent and your profits comfortable. You need to ensure that you do not get too bloated with too many staff or too many products. Similarly you need to ensure that your company is able to quickly and efficiently make changes to meet market changes.
Struggling: These are companies that have not headed the lessons mentioned above. Maybe their products are now out of date, they have too many staff and their cash flow is erratic. In recessionary times obtaining credit may be a problem. A large competitor may have stolen your market share. These are companies that are ripe for take-overs or mergers. Many are not that lucky and sadly pass on.