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Four stages of business

 

Planting Seeds or Squeezing Lemons? – The Four Stages of a Business

 

Brainwaves thinks of small businesses as being on a journey through four stages of development, each of which has its own specific needs. These stages are:

  1. Start Up

The start up business is sometimes undertaken by people who have come from a completely different walk of life or environment. They are likely to be very familiar with their ideas for the new products and the skills which they bring with them, but probably need support in getting going. This is an excellent time to get things established on the right footing such as the most appropriate business structure (see next blog).

 

  1. Generate Sales

The next stage of evolution is winning sales to grow the business from nothing to something viable. This is a very tough phase which frankly many businesses struggle to get beyond. There are a range of needs and these drive a very different approach from a business that has gained stability and is looking to move forward. The truth is that planning for consistent sales should start before start up. However it is often a crisis move six months after the flush of enthusiasm begins to face challenges. Of course consistent sales generation will always be needed, so the successful path carved out in this stage can be continued and built on throughout the life of the business. Look out for our future blog on the Sales Funnel.

 

 

 

  1. Increase Profit

So the business has reached a level of sales where survival is not the issue. But the owner finds that sales are increasing, turnover is increasing, and they are working more and more. So why are they not any better off financially? This is the point where a range of different approaches and tactics are required to squeeze out profit whilst not undermining all that good work done on developing sales approaches. Brainwaves will offer guidance on this stage in a few weeks time.

 

  1. Future Growth

It is a fact that businesses cannot stand still. They must develop or they will decline. A business that has achieved its growth in sales and its growth in profit must look to the future. How can it develop or should the owner sell? This is a difficult strategic point for a business requiring a rigorous approach on how to think out the way forward. We will be looking at those approaches and the things the business needs to think about in a later blog ‘Develop or Die’.

 

Where Are You?

What stage is your business at? It is important to recognise that your needs are different at each stage and that if you apply, for example, some of the techniques to drive out more profit when your primary need is consistent sales that will be counterproductive. A good question to ask is “what are my key success factors over the next six months and how will they be different in two years?”

 

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