Stages of Development

All businesses have a life cycle. They start with an idea of providing a service or a product. When an entrepreneur writes the idea on paper, the idea begins to take form and shape. However, it only blossoms into reality when the entrepreneur takes a risk, i.e., invests money, gets a loan, quits his job, etc. At that point, the business is born. And just like a living being, it goes through different stages. We have grouped the various stages of a business life cycle into four major phases: Idea, Start-Up, Growth, and Maturity.

Idea

Pre-Startup

Starting a business is described by many as the hardest thing they have ever done. There simply aren't enough hours in the day to complete everything. It can also be the most rewarding.

Starting a business is a daunting task. In addition to identifying your product or service, you must decide upon the legal form for your business, get the required licenses and permits, set up your accounting system, get a bank account, deal with employee and business taxes, find an office or place of business, arrange for appropriate insurance, calculate the cost of your product or service, arrange for adequate financing and learn how to market and advertise.

When you are first starting a business, there are a number of tasks that you must perform.

Listed below are some tasks that should be completed in the idea phase.

Evaluate your personal reasons for going into business
Decide what type of business you want to start
Set up the legal structure of the business
Obtain necessary licenses
Conduct market research
Research and obtain financing
Research and obtain necessary business insurance
Create a business plan
Plan the strategy for growing the business
Find an accountant and lawyer
Open a bank account for the business

Growth

You·ve been in business for a while, maybe several years and all the hard work is starting to pay off. Now is the time to think of the direction of the company and establish formal procedures and policies for your business.

Listed below are some characteristics of businesses in the expansion phase.

Establishing partnerships
Planning for expansion
Organizational structure
Recruiting the right people
HR complexity
Shift of management control
Responsibility to investors
Review business insurance requirements
Mergers and Acquisitions for growth
Networking to expand customer/client base

Start-Up

Once you have the infrastructure of your company, you will need to develop your business. You will probably have some sales, but there is still much to do.

The hard work is just starting. This may include many of the following:

Refine market niche
Branding the company
Establish a track record
Identify business partners
Networking to expand customer/client base
Match staff to volatile needs
Increase operational financing
Forecast sales
Automate payroll processing
Review insurance requirements
Revisit your business plan
Recruiting the right employees
Find an accountant and lawyer

Maturity

You have grown the business and you are known in the marketplace and the community. You have loyal customers and a significant high volume of repeat business. There are still challenges to meet and decisions to make.

Listed below are some characteristics of businesses in the mature phase.

Innovation
Sustaining growth
Declining sales
Management succession
Exit strategy
Merger and acquisitions