A business organization goes through four growth stages and this include; the start-up stage, growth stage, expansion stage, and Maturity stage. This paper is going to describe characteristics of each of these stages.
Start Up Stage: This is the first stage and at this point, if the business is owned by a single person, this person has the responsibility of handling everything in the business. He or she is in charge of advertising, production, marketing, sales and bookkeeping among other activities. This stage normally involves investing large amounts of money and time. The issues concerning finances may make the business to stagnate for some time at this stage (“Four Stages of Growth of a Business” 2013). Moreover, at this stage the number of customers is possibly small and the employees might also be few who are struggling to meet the specific customer needs. The survival of the business is not near to being guaranteed (Digiammarino, 2012).
The next stage is the growth stage. At this point, the business starts growing and there is need for employing more people. The market for the organization’s product or products is beginning to be established and this may contribute towards having increased sales and revenues. The responsibility of the business owner is to supervise employees and to schedule. As the business grows, the need for having more employees will grow as well. The main issue now turns out to shift from plain survival to the link between the revenues and costs (Churchill & Virginia, 1983).
The expansion stage is the third stage in the business growth. At this point, the owner begins to realize that the business is eventually paying off. The employee base now expands. There is now a need to have a fresh layer of the employees and a specialized management team (Churchill & Virginia, 1983). Here is when more partners might be required. Stability in the product lines starts to be realized while the business enters into a daily routine. At this stage, more money can be borrowed with ease, in order to expand the business. The marketing company’s products will have to increase in order to maintain its position. There is also need to put in place a financial plan as well as an operating plan, having also key players who have the clear knowledge of what the company is relying on “from them and a track record of consistency achieving planned performance” (Digiammarino, 2012, p.1).
The fourth stage is the maturity stage. At this stage, the concern now lies on going on to have a better performance according to plan.
There is now a need to seek fresh growth sources in the presence of the coming market saturation that may contribute towards spawning initiatives which “then each progress through four stages of organization evolution” (Digiammarino, 2012, p.1). At this point the company has the staff as well as financial resources that can enable it to carry out detailed operational plans as well as strategic plans. There is decentralization of the management and the company has also adequate staff members that have adequate experience. The business has at this point arrived. The company has some advantages in regard with size, managerial talent and financial resources. In case it can maintain the entrepreneurial spirit it has, it will turn out to be a formidable force within the market it is operating (Churchill & Virginia, 1983).
References
Churchill, N. C. & Virginia, V.L. (1983). The stages of small business growth. Harvard Business Review, May-June.
Digiammarino, P. (2012). Five stages of organization evolution and key characteristics and concerns at each stage. Retrieved from, http://www.intelliven.com/five-stages-of-organization-evolution-and-key-characteristics-and-concerns-at-each-stage/
Four Stages of Growth of a Business, (2013). Retrieved from, http://www.antiessays.com/free-essays/355984.html
