Arguably, business organization undergoes tremendous stages before achieving its main goals. As a matter of fact, every business has its unique set of processes and guidelines designed for its proper functioning and operations. But, despite the variations all business organizations must undergo the four stages of growth. Each of these stages has its unique characteristics and its influenced by demand, availability of capital, supply, as well as consumer confidence. These four stages of growth a business organization might experience include start-up, growth stage, mature stage, as well as decline.
Start-up stage is very crucial to every business that has come into existence. Perhaps, before revenues are created in a business there is a need to invest largely on time, money, effort, and energy. These are required to develop a strong customer base, engage in various business activities, and buy inventory. The start-up stage is characterized by low profit margin, innovation and high risk taking. For example, at this stage the business struggle to establish the brand name (Madura, 2007).
The second stage is the growth; this is because the business co0ntinues to expand and demands for various aspects such as increase of employees. At this stage, the business can manage to operate using limited resources. Ideally, this stage is characterized by increased demand and establishment of the consumer relationship (Moore, 2008). Various support is required in sales, production, general operation and manufacturing. It is also characterized by an increase in profit and sales margin as the market continues to be established. The owner of the business takes the responsibility of increasing the number of employees in order to meet the rising demand (Steinmetz, 2000).
Another stage of business growth is the mature stage. Businesses that have matured has already achieved a good level of name recognition. The owner of the business now realizes how the business is paying off. The business continues to expand, and so does the sales and profits. This stage of growth is characterized by well designed contacts, reliable stream of cash, sales in the organization demand less effort, borrowing reduces, and profits increase and stabilize. The main thing that the organization should undertake is marketing (Steinmetz, 2000). This was aimed at maintaining the already established brand name, market position, and innovation.
Conversely, every business organization needs to undergo a decline stage at some point. This is the fourth stage of growth in the business organization. This is characterized by unfavorable market conditions that is likely to influence consumer demand, profits and sales. Moreover, this stage is characterized by declining economic activity, that leads to decline in selling, production, buying, and employment (Madura, 2007). Depending on the market position, the business might experience reduced profit margin or loss. The company struggles to maintain its position in the marketplace. In general perspective, the four stages of growth are part of every business organization whether small or big.
References
Madura, J. (2007). Introduction to business. Mason, OH: Thompson/South-Western.
Moore, C. W., & Longenecker, J. G. (2008). Managing small business: An entrepreneurial emphasis. Australia: South-Western/Cengage Learning.
Steinmetz, L. (2000). Critical Stages of Small Business Growth. Business Horizons. Feb, Vol. 12 Issue 1, p29. 8p.
