Whether your business is just getting off the ground or has been around for decades, it’s destined to evolve. Businesses have a life cycle, one that business owners can look back at and see how much things have changed today. By looking at the common stages observed in the life cycle of a business, an owner can plan for the future changes to come.
Phase 1: The beginning
Whether you’ve scribbled the idea for your business on a napkin years ago or went into a collaborative effort with others to build something of your own, each and every business has a beginning. Perhaps you wanted to work for yourself, or maybe you’ve always been an entrepreneurial spirit — whatever the case, your business was born when you took the first step.
During the early phase, it can be relatively easy to grow because you share information about your new company with everyone you meet with and talk to. You get out and interact with others, hoping to help market your product. And if you’ve got something new and different to the market, customers might flock to you all on their own.
Phase 2: A shift in business
As easy as it was in the beginning to share the word about your business or find new ways to get out there, phase two comes on when things change and you aren’t behaving exactly as you were in the beginning. In this stage, you don’t have as much time to attend networking events. Emails to your company are sent not only to interested new leads, but also to current customers experiencing issues. You’ve become much more busy than when you were just starting out and trying to acquire work. To combat overload, you stop asking for referrals. This also means your growth rate slows or stops altogether.
This might be the point where you become frustrated with the business, questioning whether you should have gone out on your own. You’re torn between your business-life balance, needing to earn enough to keep going but wanting to enjoy time outside of work, too. You come to a crossroads with three potential options:
- Lighten the workload to get some time back to yourself.
- Do nothing, continuing to feel stressed and overworked.
- Decide to continue growing by hiring more people to help you.
Unfortunately, many business owners choose option two because options one and three are scary, but option two leads no place better or new.
Phase 3: Growing steadily
Those business owners who choose option three should strive for controlled growth. Unfortunately, small businesses failing before the five-year mark are very common. If you’ve chosen growth, remember these important things:
- You can no longer control everything in the business, so strive for success, not perfection. Because you cannot physically do everything by yourself anymore, in order to grow you’ve got to trust in the people you hire and realize they might not do things exactly the way you would.
- Aim to hire people who are better than you are. If you’re adding amazing people around you, just think how much it will help your business grow.
- Explore different ways to expand and determine what’s best for you and your business. Is it more important at this stage to offer more products, or to have more customers buying the products you already have? Do you want to spread your business regionally or nationally, or do you prefer to stay more local?
- Consider marketing. Growing your business now is more than just word-of-mouth but through personal relationships. Marketing activities will help you grow consistently and reach further.
Phase 4: The next step
This step is one that some companies take, which some skip, but it can be critical depending on the landscape of your industry as a whole. Change is driven by things like technology, legislation, environmental issues and new opportunities. Business owners must stay on top of what is happening in their industry, ready to jump ahead if a new opportunity or way to change the business presents itself.
For example, 30 years ago, television shows were available at a certain time only, and only through the television itself, while nowadays shows are available to watch on demand through devices, computers and more. Those big changes were certainly the “next step” for the industry of television, and those who didn’t get onboard got left far behind. It’s yet another reason why surrounding yourself with a great staff is helpful, because they can be your eyes and ears in regards to what potential changes might be ahead.
Phase 5: Decline
Unfortunately, if a company misses out on making the right changes, the next phase is likely decline. Revenues will fall, and it will become tougher to come by new work, thus, the business becomes stagnant. You might find customers jumping ship and going for your competitors who are embracing new technology and new ideas. Your business may be left in the dust altogether if you’ve completely missed the boat on what’s next.
Business owners sometimes find themselves in this decline phase by default. That’s why it’s important to identify the keys that empower your business to stay active and relevant.