Essay On Four Stages Of Business Growth

Business growth is among the mind boggling issue in the mind of almost every entrepreneur seeking to make his or her business a better one. A business owner must therefore perceive and understand the four stages that a business ought to go through while growing in order to take the necessary steps to allow the business to grow smoothly. The stages mentioned are four considering that the existence stage of the businesses has already come to pass since it already exists and so has stabilized its products’ quality and customer acceptance. Therefore, the first stage of small business growth is survival (McKeown, 2010). This moment implies that the business has already been accepted by the customers as serving their needs, therefore the problem shifts to managing the revenues and expenses of the business. In other words, the entrepreneurs question whether it is possible to get enough cash flow to continue growing, breakeven and cover the replacement of the assets within the business.
The second stage of survival is success and this is a typical stage for a small business that has successfully maneuvered itself through the survival stage analysis (McKeown, 2010). When a business is in the success stage, it implies that it is indeed making enough money to be able to replace the capital assets that have been sold. In addition, the business is also making enough cash flow to facilitate the continuing growth phase of the business. Therefore, the problem facing the managers and owners at this phase of growth and development is that whether to maintain the business at this profitable phase or go ahead and exploit the accomplishment and continue growing. This dilemma can indeed be challenging and many businesses stagnate here when they realize that they do have enough money.
Upon choosing to move forward, it means that the business owner has decided to take the risk of expanding the business assets. There are newer challenges as compared to the previous stages of growth and development because the business seeks to expand into an even bigger business and so there are bigger problems. This stage is referred to as take-off (Moore & Longenecker, 2008). The main question in this area is to ensure a rapid growth of the business or enterprise and the source of finance to fuel the growth effectively. Therefore, the enterprise owner seeks the best for the business and delegates some of his or her duties to qualified personnel in order to push the business complexity higher. On the other hand, there needs to be enough cash to ensure that the growth demands are met, implying that the high debt-equity ratio needs to be tolerated. At this stage therefore, a cash flow analysis of inflows and outflows should be monitored to ensure maximization of the finances.
The fourth stage known as resource maturity is encompassed by the fact that the business rapid growth is to be consolidated as well as the increased financial gains at the rapid growth phase are controlled explicably (Moore & Longenecker, 2008). In addition, the enterprise seeks to maintain and employ the various advantages of the small size inclusive of flexibility of the response to the clients as well as the immense entrepreneurial spirit that the workers still possess as the business sought to grow in the first place. At this stage, the main problem that the enterprise might face is the inadequate management force to handle the new aspects of the growing business. Considering the rapid growth phase of the business in the take-off stage, inadequacies in the management can arise a great deal to meet the growth needs. Therefore, the owner needs to professionalize the business by employing professional tools such as the budgets, strategic planning and so many more to manage the inflows and outflows of the finances and making decisions. In a nutshell, the business growth is indeed a procedure and an entrepreneur best understand it in order to prepare effectively for the challenges at each stage.

References

McKeown, L. (2010). Predictable success: Getting your organization on the growth track--and keeping it there.
Moore, C. W., & Longenecker, J. G. (2008). Managing small business: An entrepreneurial emphasis. Australia: South-Western/Cengage Learning.