Business Life Cycle Characteristics And Strategies

Business Life Cycle Characteristics And StrategiesEvery occupation organisation has its living cycle aiming with blueprint of the idea for a descent, then the start up, implementation, fruit, maturity and decline. There ar a lot of different terms be used for profession life cycles parallel, which is alike in parallel to the product life cycle. Some of ideas entail simply four stages which are the start-up, bristleth, maturity and decline. differents involve seven stages from start-up, growth, maturity, saturation, decline, renewal and withdrawal. In general, they are practically the same. One is just a more detailed outlook of a business cycle. With time, a business will definitely pass through different stages of development.The 7 Stages of the Business Life Cycle7 Stages of Business Life CycleSEEDHow do you develop your idea into something that may turn into a business? 1 The ideaWhats your idea?What will your product or service that youll offer? go away your busi ness be built from scratch, or do you excogitate on misdirecting an existing business?2 Is it feasible?Do you slang the skills or experience to be successful at this business?Do you know how much money it will take to start?What are your plans for financing the business?What are your own strengths and weaknesses? Be honest with yourself.3 Whos your market?Who will be your market?Who will your competition be and what are their strengths and weaknesses?If you dont think you confine competition, are you sure as shooting? If thats true, is the product or service really wanted?Whats unique closely your business that will make people want to buy from you instead of this competition?http//aksbdc.org/small-business-life-cycle/think/**The seed stage of your business life cycle is when your business is just a thought or an idea. This is the very conception or birth of a new business.Challenge Most seed stage companies will take hold to overcome the challenge of market acceptance and a ffiance one niche opportunity. Do not spread money and time resources too thin.Focus At this stage of the business the focusing is on co-ordinated the business opportunity with your skills, experience and passions. Other focal minds include deciding on a business proprietorship structure, finding professional advisors, and business planning. currency Sources Early in the business life cycle with no proven market or customers the business will rely on cash from proprietors, friends and family. Other potential sources include suppliers, customers, government grants and banks.http//www.winonanationalbank.com/BusinessBanking/BusinessLifeCycle.aspxSTART-UPInitially, a small business owner think about the kind of business he/she wants to make. Then he does a feasibility study about the risks involved, the tolls, the take aim for the product or services, the potential clients, the marketability of the offering all these things are considered at the seed phase. He as well thinks about where to get supporting, what other products and services to offer, the set and how people would react or require the product or service or both. During this seed phase, he also thinks about probable resources where to find finding such as family, friends and financiers, venture majusculeist or even the bank.Once he finally realised that there might be a direct for it, then he moves to the start-up phase. Once it has been decided that there is a huge potential for the business, then he start implementing the ideas of the business. These could finding a suitable location for the business, sourcing suppliers, finding business partners, making the business plan and marketing plan, leave focused on the products and service to initially offer, and also to register the business into a legal entity, whether a sole proprietorship, partnership or a corporation or a limited financial obligation caller-up. The small business owner would deal also governd the location to best open s hop, with the target clients also in mind.Most small business owner opening a business, opt for a home business start-up SOHO small office home office set-up. This is often the choice because it is more cost efficient, facing the challenge of limited financial resources. This would enable them to maintain the least overhead possible, where normally, the lease or office rent eats up a huge percentage of in operation(p) costs. It is other challenge for a start-up order to be aware of its spending/budget. The challenge lies in making sure not to over-estimate or overshoot the budget/funds, at worse prematurely.The small business owner should also determine if he can start the business on his/her own, a one woman/man-show, or should it be better to employ a minimal number of employees and what skills would they need to posses. One option is to look into direct as a family business, especially if the business owner has adult children, a spouse or other family members that are trus dickensrthy and reliable. Otherwise, hiring employees would be limited to two or three, everyone must be multi-skilled and able to multi-task.At start up, focus will be on having the business fully operations which involves identifying and building backup and developing the products and services being offered based on what the clients require.This is also where you establish partnership and nurture relationships with suppliers. Money source would be family, friends, sometimes it could involve get from ones personal savings or get a loan from the bank. Grants are also something to look into.It is also wise to make arrangements with suppliers regarding terms of payment, determining how some(prenominal) days is required to pay whether it is a 30 day to 90 day payment arrangement (i.e.) .This is also where he small business owner unavoidably to strategise on how to enter and compete in the market, being aware of competitors and their standing in the market place or manufacturing . Knowing this will determine the course of attack or entry.There are also other legalities that need to be taken care of such as insurances, liabilities, adhering to rules and regulations of the locality where you are operating, Taxes where to register a s GST company or not.Evaluating the reasons for going into business is also crucial. If the small business owner has proof (feasibility study) that the offering is in demand and can be successful, then this could be good enough. However some would also need to ask themselves if this is more than just money, if the business can accept a sense of fulfilment or its success could be left as a legacy to the children/family. A small business owner need to know his motivation behind the business, this will give him a clear focus for success.Launching the business is part of the start-up which needs to focus on in effect(p) marketing strategies. This is to make sure that people know what the business offers, or stands for, its location a nd contact details, and who to deal with. This also needs to cover areas of competitive the pricing and encouraging terms for doing business. Starting the implementation of the marketing plans and strategies is like a test run during the start-up phase.Listed below are some tasks that should be completed in the start-up phase.Evaluate your personal reasons for going into businessDecide what type of business you want to startSet up the legal structure of the business declare necessary licensesConduct market researchResearch and obtain financingResearch and obtain necessary business insuranceCreate a business planPlan the strategy for growing the businessFind an control and lawyerOpen a bank account for the businesshttp//www.fairfaxcounty.gov/dpsm/osb/start_up.htm**Your business is natural and now exists legally. Products or services are in production and you have your first customers.Challenge If your business is in the start-up life cycle stage, it is likely you have overestimated money needs and the time to market. The main challenge is not to burn through what little cash you have. You need to learn what profitable needs your clients have and do a reality fit to see if your business is on the right track.Focus Start-ups requires establishing a customer base and market presence along with tracking and conserving cash flow.Money Sources Owner, friends, family, suppliers, customers, or grants.http//sbinformation.about.com/cs/marketing/a/a040603.htmGROWTHAfter a successful start-up comes the growth of the business. During growth the business needs to maintain good relationships with everyone, both internal and external, such as clients, suppliers, and government and private agencies it deals with. Also, by this time, the business is expected to be earning and not just applications programme the overhead. The business, at this stage is starting to win and build its market share.The challenges here would still be the usual issues of time and money. Time and mon ey is crucial especially of the business is focused on finding and providing a better way of service delivery, and consistently strives to improve its offering.Clients will know the quality of work provided and invent goes around. Clients recommend and there will be more clients coming as a consequence. The business then starts to build its reputation for excellence and reliability.Relationships not only with clients only if also with suppliers must be nurtured. Prompt payment, for materials or services, based on term arranged, is crucial. This way, the business comes as a reputable and trustworthy company to deal with. This will help the business in finding and establishing business relationships with new suppliers and partners.As a growing business, standardisation or standard operational procedure which is crucial in the delivery of consistent excellent service should have been established and running smoothly, albeit still open for tweaking and modifications as the need arise s. .This is also the time to consider adding a staff for sales and marketing, or business development. This person is supposed to duplicate the process already in place and demand his own skills and experience to contri stille to the growth of the business. S hiring a highly skilled and experiences staff is crucial. Background checks are also necessary to make sure employee has integrity and is professional. Having a highly skilled employee can help maximise time and value for money for the company, as there will be no need for training or re-training in the short term.The business also has to make sure that at this stage of growth, pay are running smoothly. financial resource would be coming from new partnerships, through the profits, by having a higher credit line from the bank. It is still a good idea to check availability of grants.The business could still be home based or if moving a better or larger place is considered, leasing/renting would be wise.Remember during the grow th stage, market share are being be, the brand is getting recognised, a very good track record in reliability and excellence is being put in place, there is growth in business partnerships and the business network is expanding. Perhaps the small business is even getting into a position where it can influence the market place better business practices and innovative.During the growth stage, sales/business forecasts are being achieved.Very capable and reliable accountant and lawyer are also very much needed by a growing company making sure that finances are healthy and that rules and regulations by the government and the industry are always followed. .It is best for the business to be on its toes, affirm assessing the marketing plans, and changing it when necessary, in order to keep up with the changing market.Once the infrastructure of the company is established, the focus is to develop the business. There will probably be some sales, but there is still much to do.The hard work i s just starting. This may include many of the followingRefine market nicheBranding the companyEstablish a track recordIdentify business partnersNetworking to expand customer/client baseMatch staff to volatile needs add operational financingForecast salesAutomate payroll processingReview insurance requirementsRevisit your business planRecruiting the right employeesFind an accountant and lawyer http//www.fairfaxcounty.gov/dpsm/osb/growth.htmYour business has made it through the toddler old age and is now a child. Revenues and customers are increasing with many new opportunities and issues. Profits are strong, but competition is surfacing.Challenge The biggest challenge growth companies face is dealing with the constant range of issues bidding for more time and money. Effective management is required and a possible new business plan. Learn how to train and delegate to conquer this stage of development.Focus Growth life cycle businesses are focused on running the business in a more for mal fashion to deal with the increased sales and customers. Better accounting and management systems will have to be set-up. New employees will have to be hired to deal with the influx of business.Money Sources Banks, profits, partnerships, grants and leasing options.http//sbinformation.about.com/cs/marketing/a/a040603.htmHelpful questions to ask during the growth period1 Increasing Market AwarenessWhat is the market potential for growth?What is your promotional strategy to reach your target market?Have you defined a marketing budget?Do you have a marketing plan?2 Your Operational PlanDo you have the capacity to have current and future sales levels?Do you need new equipment, more personnel and/or additional working capital to increase capacity?Do you need to increase efficiencies and effectiveness through better production processes, less waste and increased quality?Do you need more space and bigger facilities to meet capacity needs?3 Your teamDo you have the right people on board? Do you have a plan for attracting future personnel?Do you have defined duties, responsibilities, skill and experience needed for each position?4 Your Financial PlanHow much capital (cash) will you need for business elaborateness?How will you raise this capital (cash)?Do you have a business plan for investors/lenders to review?What are your anticipate sales, profits and cash flow based your expansion plan?5 Plan to GrowHave you revisited your plan to address opportunity for growth?http//aksbdc.org/small-business-life-cycle/grow/MATURITYAfter the growth stage come the maturity of the business, where everything has been founded solidly, you have established clientele, partners, a bigger business entwork and may be eying expansion. Opening another office branch locally or another city or get into partnership in another city, depending on what area of focus the expansion would aim to achieve. However, upon growth some companies fall into the trap of sitting on theri laurels and stagnat e. Companies need to be in theri toes, to be abreast of the changes in teh industry and their competitors, and the changing customer needs or requirements. All of these need to be considered. Aotumation is also another avenue to consider in terms of growth, outsourcing could also be considered to improve profit and productivity.After maturity, there are different phases that csmall busness fall into. Some companies reach the point of saturation. When this happens other consider to expand, sell of close shop. The saturation phase can trigger the next step for the small business. Which can be renewal, expansion, or decline and eventually withdrawal (closing shop).The challenge for established companies is to keep on their toes and deliver the same kind of service. As a company grows, customer satisfaction can sometimes get affected as change service has to give way to automation or standardisation. Companies also have the challenge of expansion in the ssense that the new products and services must be completing or related to the existing offerings. It is risky to delve into a totally different product/service line. Unless a company has very good financial background, a new partner, a solid plan, then it can still be an avenue for expansion for the company.SATURATIONHow do we manage saturation point? Reinvention, innovation is a very good strategy, you change the marketing plan, improve the services and products, analyse the current market base and position. You also analyse the changing requirements of the clients and address them. SO the products and services are offered based on the clients needs.DeclineRenewal / InnovationIf after the saturation period a business owner finds himself with no intention to continue, then he has a choice between selling the business and closing shop. Selling the business would be more profitable, as the clientele, suppliers and partners have been establish and the eventual owner will be going away with everything set in place. It will save the new owner years of establishing the business. All he/she needs to do is maintain and improve what exists. Normally small business owners decide to sell when they feel that they do not have the energy or ability to continue with the business anymore or they are actually having some financial difficulties and are unable to find funding from different source,WithdrawalInstead of losing money and closing shop, selling the business is still a better alternative. However, for some businesses the situation might really be worse and there will be no other alternative but to close shop and try to cut loses.Another tone ending options is to liberty the business and just administer and transfer the technology or process to the franchisee. Franchising is exiting through expansion. The successful process is sold including the processes and partnerships. The Franchisee can then just focus on building their own clientele. The original owner still earns from royalties or percenta ges of sales and from supplying materials, ingredients or whatever is required depending on the nature of the business.http//aksbdc.org/small-business-life-cycle/exit/http//www.dws.net.au/tools/the-prosperity-cycle.htmlhttp//www.smallbusiness.wa.gov.au/biz-life-cycle/http//www.legacee.com/FastGrowth/OrgLifeCycle.htmlhttp//www.enotes.com/small-business-encyclopedia/industry-life-cyclehttp//smallbusiness.chron.com/brands-product-life-cycle-785.htmlcharacteristics and strategies of each life cycleExit Strategy http//www.japaninc.com/mgz_sep-oct_2007_issue_exit-strategyhttp//en.wikipedia.org/wiki/Product_life_cycle_management_%28marketing%29http//university-essays.tripod.com/product_life_cycle.htmlhttp//courses.cit.cornell.edu/cuttingedge/lifeCycle/11.htmhttp//www.referenceforbusiness.com/encyclopedia/Oli-Per/Organizational-Life-Cycle.htmlshort- and long-range plans to implement strategieshttp//www.referenceforbusiness.com/small/Bo-Co/Business-Planning.htmlhttp//www.arnoldit.com/articl es/PDF_Web/article1988/chap6_MarPlan.pdfhttp//managementhelp.org/fp_progs/sp_mod/str_plan.htmhttp//nett.com.au/finance/business-credit/small-business-lifecycle-reaping-the-rewards/11181.htmlhttp//sbinformation.about.com/cs/marketing/a/a040603.htmhttp//www.winonanationalbank.com/BusinessBanking/BusinessLifeCycle.aspxhttp//www.dws.net.au/tools/the-prosperity-cycle.htmlhttp//www.ajfoligno.co.uk/business_cycle.phphttp//www.manyworlds.com/logContent.aspx?to=coViewURLLinkcoid=CO1290216533092