Business 100
Name
Institution
The Four Stages of a Business
It is unfortunate that for most company leaders, they navigate the growth of their business through trial and error method instead of anticipating and preparing for them. Therefore, leaders should develop a framework that will present the growth challenges of a company and strategies, skills and capabilities that are required to manage the growth. In order to build a successful organization, leaders should recognize the four stages of growth of a business which are: start-up stage, growth stage, expansion stage and the maturity stage (Cichelli, 2010).
Start-up Stage
When starting a business organization, one should decide the legal form of the business. Additionally, the business requires business permits and licenses, office, accounting system, the cost of the product or service, insurance, capital, and the market source. There are several tasks a person should undertake such as evaluating personal reasons for starting a business, conducting market research and making a business plan. For example, when starting a coffee hotel business, the business leaders should find target customers; invite them for lunch at the hotel to get customers’ feedback. The leaders should find new marketing channels such as blogs, sales calls, conferences in orders to attract as many customers as possible (Cichelli, 2010).
Growth Stage
Once the organization’s infrastructure has been laid out, there is a need for business development. Although the business may have some sales, many business units fail at this stage since they get customers but do not know how to retain them. At this stage, the business leaders should do the following: identifying business partners, branding the company, forecasting sales, networking to increase the customer base. Moreover, the organization should also start recruiting the right employees, refine the market niche and revisit the business plan. For example, in a hotel industry, the company should recruit qualified receptionists, chefs, security guards and the waiters. There should also be an attractive hotel brand, inject more capital to increase sales and create business cards and websites for marketing of the hotel (Bak & Stair, 2011).
Expansion Stage
The expansion stage may kick off after some years. At this stage, there are progressive sales and business stability. However, there is a need to create policies and procedures for the business. The following activities are conducted at the expansion stage: planning for expansion shifts in management control, looking for investors, establishing partnership and mergers and acquisitions for growth. The company also organizes the HR complexity, plans for expansion and recruits the right people for different job positions. For example, for the hotel business, the company should invite investors to create other branches of the business. The company can also merge with other hotels that are offering similar products and services for growth (Cichelli, 2010).
Maturity stage
At this stage, the business is fully grown in the marketplace and the community. The business also has loyal customers and a high frequency of repeat business. However, there are challenges at this stage that require constant decision-making process. The company should look into the following: innovation, management succession, sustainable growth, mergers and acquisitions, declining sales and exit strategy. For instance, when the hotel has a strong reputation for offering the best services, the business is at optimum production. The business leaders encourage employees work efficiency to maintain sustainable growth. To deal with declining sales, the hotel manager creates internal control systems to prevent fraud, embezzlement of fund and mismanagement of resources (Longenecker, Petty, Palich & Hoy, 2011
References
Bak, O., & Stair, N. (2011). Impact of e-business technologies on public and private
organizations: Industry comparisons and perspectives. New York, NY: IGI Global.
Cichelli, D.J. (2010). The sales growth imperative: How world class sales organizations
successfully manage the four stages of growth. New York, NY: McGraw Hill Professional.
Longenecker, J., Petty, J., Palich, L., & Hoy, F. (2011). Small business management: Launching
and growing entrepreneurial ventures. Natorp Boulevard: Cengage Learning.
