During the growth of any business, a company will go through the stages of the business life cycle and encounter different challenges that require different resources and expertise. For example, a Wellington tow truck business may require to come up with a different strategy when it comes to market penetration, retaining market share, or business development. As the business becomes more mature, operations and priorities will change and this calls for different resources to be injected into the business.
Here are the different stages any business will go through, to realize its success.
The development stage, also known as the seed stage is the beginning of a business life cycle. It occurs when your brilliant idea is just a though and requires different testing at the initial stages. To test your business idea, you need to conduct research that pertains to your industry, gather feedback, and analyze the reports you get. Doing so will help you determine whether your business idea is worth pursuing or not. The challenges you will face include business idea profitability, market acceptance, establishing business structure, and accounting management.
Now that you have decided your business is worth pursuing and you have made some moves, things start to get interesting. You have already finished developing your products and services and your business starts its marketing as well as selling. At this stage, you will be tweaking your products and service according to the initial feedback you got during the research stage. You will need to learn and adjust your business model accordingly and meet customer expectations. The challenges you will face include managing cash reserves, managing sales expectations, accounting management, establishing a customer base, and establishing market presence.
Your business has gone through the initial stages of a business life cycle and its now in its growth or survival stage. The business is constantly generating revenue as well as adding new customers. Your business could be operating at a net loss as well. You will need to fine-tune your business model to be in line with your goals and expectations. The challenges you will be facing include; dealing with increased revenue, dealing with increasing customers, accounting management, effective management, and market competition.
The expansion stage is also known as a rapid growth stage. Your business has been thriving and has established its presence. You have now reached a stage where your business will expand and spread into new markets. To capitalize on the success, you have been experiencing, you will need to capture a larger market share and find new revenue. Challenges you will face include increasing market competition, accounting management, moving into new markets, adding new products or services, and expanding existing businesses.
The last stage of a business is the maturity stage. After a successful expansion, your business will be on top of the industry and will have matured. Your business has a dominating presence in its market. It could still be growing but not at an alarming stage. You will either decide to take a step back towards the expansion stage or think of a possible exit strategy.