There are different stages of growth for any small business. As you grow and develop, the problems you encounter will change, and you'll need to try different things in order to solve them. So, where is your company in the business life cycle right now? Whether you're just starting out or have been in business for decades, knowing where you stand will help you plan for your next step and avoid unnecessary market declines and disruptions.
The Seed Stage
During the seed stage of a business's lifecycle, the business is just an idea or a thought. Most seed-stage companies will have to face the challenge of getting their products accepted by the market. In this delicate stage, it is important not to try to do too much at the same time. At this point in your business, you should make sure that your idea fits well with your skills, experiences, and interests. You'll also need to choose how the business will be owned, make a business plan, and find money to fund your vision. You might be able to get money for your business from yourself, from friends and family, or from lenders. If you already have some customers for your business, you might even be able to convince them to invest.
In this first step, you decide on your business idea and who you want to sell to. Then you can research the market with a view to finding out how much money people in the industry want to spend on a product like yours. Thereafter you will make your product or service and see if it will appeal to the people you want to buy it. At this stage, your marketing is focused on brand awareness.
The Start-Up Stage
Once your business is officially up and running, you'll need to make sure you can sell your products or services and build a customer base, creating a presence for yourself in the market. If your costs are higher than expected, you might need to change your business plan or raise more capital. But take care not to spend your money too fast. Your business may take longer than you think to start making money or even out.
The Growth Stage
If your business is growing, it's likely that so are your sales and customer base. To handle the extra work that comes with a growing business, you might need to hire and train new people. You might also need to put more money into the business to keep it going. If your core business is doing well or can't grow any more without new customers, it may be time to move into a new market. It’s often a good idea to go into niche markets rather than bigger ones which will have more competition. Before deciding where to put your money, make sure you do a lot of planning and research.
The Established Stage
Even if your business is self-sufficient and making money, it still takes a lot of work to keep it going. Make sure your revenue stream remains steady or grows by staying on top of any changes in the industry, always responding to what your customers really want.
The Decline Stage
Sales, profits, and cash flow all go down during the decline stage. If a business owner can't cut costs or make enough money, they might have to sell or shut down their business altogether. A business might not go out of business if it tries to reinvent itself or moves into new markets or technologies. So, there are always creative ways for your business to change its place in the market, recover and start to grow again.
The Exit Stage
You can leave a business you started in a few different ways. You might be able to sell your business and start something new, the business might not have worked out, you may sell to a competitor or you might even be ready to stop working altogether. You will know when it's time to leave so listen carefully to your instincts and pay attention to the timing in order to understand whether or not it makes sense.
The bottom line
There are six stages when it comes to starting and running a business. The needs of your business will shift and change depending on where you are in the lifecycle and it is important to remain tuned into these often subtle dynamics. There is something quite exciting about this idea though because at its heart is the idea that being an entrepreneur will always remain interesting and just when you feel like you are on top of your game, a new challenge will emerge, giving you another opportunity to learn and grow. Remember, if you feel like you need quick working capital to steer you through any stage of your business, contact Merchant Capital and fund your business in the next 48 hours.